A Comprehensive Survey on the Economic Effects of Information and Communication Technology in Hungary

As the author could not find a reassuring mathematical and statistical method for studying the effect of the information communication technology on businesses in the literature, the author proposed a new research and analysis method that he also used to study the Hungarian economic sectors. The question of what factors have an effect on their net income is essential for enterprises. First, the author studied the potential indicators related to economic sectors, then the indicators were compared to the net income of the surveyed enterprises. The data resulting from the comparison showed that the growing penetration of electronic marketplaces contributed to the change of the net income of enterprises in various economic sectors to the extent of 37%. Among all the potential indicators, only the indicator of electronic marketplaces has a direct influence on the net income of enterprises. It was practical to determine two clusters based on the potential indicators. With the help of the compound indicator and the financial data of the studied economic sectors, the author made an attempt to find a connection between the development level of ICT and the profitability. Profitability and productivity are influenced by a lot of other factors as well. As it seemed to be impossible to measure and show the effect of those other factors, the results are not full but informative. The highest increment of specific Gross Value Added was produced by the fields of Manufacturing, Electricity, gas and water supply, Transport, storage and communication and Financial intermediation. With the exception of Electricity, gas and water supply, all economic sectors belong to the group of underdeveloped branches (below 50 percent). High (but not reaching the developed status) compound indicators were shown by Mining and quarrying and Wholesale and retail trade and repair work, as they produced an increment of Gross Value Added below the average, these economic sectors can be found in the lower right part of the coordinate system. Construction, Health and social work and Hotels and restaurants can be seen laggards, so they got into the lower left part of the coordinate system. Agriculture, hunting and forestry can also be classified as a laggard economic sector, but as the effect of the compound indicator on the increment of Gross Value Added was less significant, it can be found in the upper left part of the coordinate system. Drawing a trend line on the points, it is clear that the line shows a positive gradient, that is, the higher the usage of ICT devices, the higher improvement can be detected in the specific Gross Value Added

The strategic motive to sell forward: experimental evidence

We test the strategic motive to sell forward in experimental Cournot duopoly and quadropoly environments with either a finite (exogenous close) or an infinite (endogenous close) number of forward markets. In the exogenous close case experienced subjects do not avail themselves of the forward markets and production mostly occurs in the spot market phase. In a forward market duopoly experienced subjects achieve nearly the monopoly output level. For the quadropoly output levels are more competitive and are near the Cournot Nash equilibrium. In both cases output produced is much less than the Allaz-Vila (1993) prediction. The results with inexperienced subjects, however, are in line with theory and as reported in Le-Coq and Orzen (2006). We implement the case of infinitely many forward periods using the endogenous close rule. In this case the results both for a forward market duopoly and quadropoly are much more competitive both with inexperienced and experienced subjects. Unlike the exogenous stopping rule, under the endogenous rule subjects sell forward in the forward markets and find it hard to coordinate their actions

Beyond Bankruptcy: Resolution as a Macroprudential Regulatory Tool

To try to protect the stability of the financial system, regulators and policymakers have been extending bankruptcy-resolution techniques beyond their normal boundaries. To date, however, their efforts have been insufficient, in part because bankruptcy law traditionally has microprudential goals (to protect individual firms) whereas protecting financial stability is a “macroprudential” goal. This Article seeks to derive a logical and consistent theory of how and why resolution-based regulation can help to stabilize the financial system. To that end, the Article identifies three possible regulatory approaches: reactive resolution-based regulation, which comprises variations on traditional bankruptcy; proactive resolution-based regulation, which consists of pre-planned enhancements that are designed to strengthen or facilitate the resolvability of financial system elements that become troubled; and counteractive regulation, which seeks to reduce the need for resolution (and thus is not truly resolution). The Article then argues that resolution-based regulation should seek not merely (as currently conceived) to protect individual troubled systemically important firms but also to protect against the failure of systemically important firms in the aggregate as well as to protect other critical elements of the financial system. These include the markets in which securities and other financial assets are traded and the infrastructure that serves to facilitate that trading. Finally, the Article applies these insights to design resolution-based regulation that can be used by regulators as an additional macroprudential “tool.

Tilting the Supply Schedule to Enhance Competition in Uniform- Price Auctions

Uniform-price auctions of a divisible good in fixed supply admit underpricing equilibria, where bidders submit high inframarginal bids to prevent competition on prices. The seller can obstruct this behavior by tilting her supply schedule and making the amount of divisible good on offer change endogenously with its (uniform) price. Precommitting to an increasing supply curve is a strategic instrument to reward aggressive bidding and enhance expected revenue. A fixed supply may not be optimal even when accounting for the cost to the seller of issuing a quantity different from her target supply.uniform-price auction, divisible good, strategic role of the seller, endogenous supply, Treasury and IPO auctions.

Does Volatility matter? Expectations of price return and variability in an asset pricing experiment.

We present results of an experiment on expectation formation in an asset market. Participants to our experiment must provide forecasts of the stock future return to computerized utility-maximizing investors, and are rewarded according to how well their forecasts perform in the market. In the Baseline treatment participants must forecast the stock return one period ahead; in the Volatility treatment, we also elicit subjective confidence intervals of forecasts, which we take as a measure of perceived volatility. The realized asset price is derived from a Walrasian market equilibrium equation with non-linear feedback from individual forecasts. Our experimental markets exhibit high volatility, fat tails and other properties typical of real financial data. Eliciting confidence intervals for predictions has the effect of reducing price fluctuations and increasing subjects' coordination on a common prediction strategy.Experimental economics, Expectations, Coordination, Volatility, Asset pricing

Aggregate Implications of Micro Asset Market Segmentation

This paper develops a consumption-based asset pricing model to explain and quantify the aggregate implications of a frictional financial system, comprised of many financial markets partially integrated with one another. Each of our micro financial market's is inhabited by traders who are specialized in that markets type of asset. We specify exogenously the level of segmentation that ultimately determines how much idiosyncratic risk traders bear in their micro market and derive aggregate asset pricing implications. We pick segmentation parameters to match facts about systematic and idiosyncratic return volatility. We find that if the same level of segmentation prevails in every market, traders bear 30% of their idiosyncratic risk. With otherwise standard parameters, this benchmark model delivers an unconditional equity premium of 2.4% annual. We further disaggregate the model by allowing the level of segmentation to differ across markets. This version of the model delivers the same aggregate asset pricing implications but with only one-third the amount of segmentation: on average traders bear 10% of their idiosyncratic risk.Asset pricing; market segmentation; idiosyncratic risk

Locational-based Coupling of Electricity Markets: Benefits from Coordinating Unit Commitment and Balancing Markets

We formulate a series of stochastic models for committing and dispatching electric generators subject to transmission limits. The models are used to estimate the benefits of electricity locational marginal pricing (LMP) that arise from better coordination of day-ahead commitment decisions and real-time balancing markets in adjacent power markets when there is significant uncertainty in demand and wind forecasts. The unit commitment models optimise schedules under either the full set of network constraints or a simplified net transfer capacity (NTC) constraint, considering the range of possible real-time wind and load scenarios. The NTC-constrained model represents the present approach for limiting day-ahead electricity trade in Europe. A subsequent redispatch model then creates feasible real-time schedules. Benefits of LMP arise from decreases in expected start-up and variable generation costs resulting from consistent consideration of the full set of network constraints both day-ahead and in real-time. Meanwhile, using LMP to coordinate adjacent balancing markets provides benefits because it allows intermarket flow schedules to be adjusted in real-time in response to changing conditions. These models are applied to a stylised four-node network, examining the effects of varying system characteristics on the magnitude of the locational-based unit commitment benefits and the benefits of intermarket balancing. Although previous www.eprg.group.cam.ac.uk EPRG WORKING PAPER studies have examined the benefits of LMP, these usually examine one specific system, often without a discussion of the sources of these benefits, and with simplifying assumptions about unit commitment. We conclude that both categories of benefits are situation dependent, such that small parameter changes can lead to large changes in expected benefits. Although both can amount to a significant percentage of operating costs, we find that the benefits of balancing market coordination are generally larger than the unit commitment benefits