Revenue Loss in Shrinking Markets

We analyze the revenue loss due to market shrinkage. Specifically, consider a simple market with one item for sale and $n$ bidders whose values are drawn from some joint distribution. Suppose that the market shrinks as a single bidder retires from the market. Suppose furthermore that the value of this retiring bidder is fixed and always strictly smaller than the values of the other players. We show that even this slight decrease in competition might cause a significant fall of a multiplicative factor of $\frac{1}{e+1}\approx0.268$ in the revenue that can be obtained by a dominant strategy ex-post individually rational mechanism. In particular, our results imply a solution to an open question that was posed by Dobzinski, Fu, and Kleinberg [STOC'11]

More Pain, No Gain for Greece: Is the Euro Worth the Costs of Proa

This week the Greek government reached agreement with the European authorities and the IMF for 130 billion euros in lending, as part of a new adjustment package to replace the current IMF program that began in May of 2010. Although the agreement should allow the government to avoid default in March, there are grave doubts as to whether the agreed upon program will lead the country to a point where it returns to growth, has a sustainable debt burden, and can borrow from private markets

General Hospitals, Specialty Hospitals and Financially Vulnerable Patients

Examines whether specialty hospitals draw well-insured patients away from general and safety-net hospitals, reducing their ability to cross-subsidize less profitable services and uncompensated care, in three cities. Notes challenges and implications

More Pain, No Gain for Greece: Is the Euro Worth the Costs of Pro-Cyclical Fiscal Policy and Internal Devaluation?

This week the Greek government reached agreement with the European authorities and the IMF for 130 billion euros in lending, as part of a new adjustment package to replace the current IMF program that began in May of 2010. Although the agreement should allow the government to avoid default in March, there are grave doubts as to whether the agreed upon program will lead the country to a point where it returns to growth, has a sustainable debt burden, and can borrow from private markets. The most important problem with the commitments that Greece has made in the past two years is that its fiscal policy is pro-cyclical – that is, the government has been, and is committed to, tightening its budget while the economy is in recession.greece, euro, europe, devaluation, procyclical, countercyclical, imf,

Low cost carriers and the evolution of the US airline industry

The article studies the evolution of the U.S airline industry from 1995 to 2009 using T-100 traffic data and DB1B fare data from the U.S. Department of Transportation. Based on a differentiation in market size and major players, entry and exit, concentration, fares, service, costs and profits, the article provides a fresh look on recent developments in the structure, conduct and performance of the domestic U.S. airline industry in light of both the substantial growth of low cost carriers and severe internal and external shocks such as merger and bankruptcy activity or the recent recession. Unlike previous studies, a consistent split of the analysis in network carriers and low cost carriers is introduced. In general, we find that the competitive interaction between network carriers and low cost carriers increased substantially throughout the last decade and must be considered as the main driver of competition in the domestic U.S. airline industry. --Airline industry,deregulation,network carrier,low cost carrier

Subsidizing Extra Jobs: Promoting Employment by Taming the Unions

We study the subsidization of extra jobs in a general equilibrium framework. While the previous literature focuses on symmetric marginal employment subsidies where firms are rewarded when they increase employment but punished when they reduce their workforce, we consider an asymmetric scheme that only rewards employment expansion. This changes the incidence substantially. In the asymmetric case without punishment, it becomes less costly for firms to lay off a substantial fraction of their workforce when trade unions raise wages. This tames the unions, which causes wage moderation and raises aggregate employment and welfare. For moderate subsidy rates, all unions prefer to restrain their wage claims. At sufficiently high subsidy rates, labor market conditions improve so much that some unions enforce higher wages and let their firms shrink. This displacement of firms might have a negative impact on employment and welfare.marginal employment subsidies, unemployment, general equilibrium

Subsidizing Extra Jobs: Promoting Employment by Taming the Unions

We study the subsidization of extra jobs in a general equilibrium framework. While the previous literature focuses on symmetric marginal employment subsidies where firms are rewarded when they increase employment but punished when they reduce their workforce, we consider an asymmetric scheme that only rewards employment expansion. This changes the incidence substantially. In the asymmetric case without punishment, it becomes less costly for firms to lay off a substantial fraction of their workforce when trade unions raise wages. This tames the unions, which causes wage moderation and raises aggregate employment and welfare. For moderate subsidy rates, all unions prefer to restrain their wage claims. At sufficiently high subsidy rates, labor market conditions improve so much that some unions enforce higher wages and let their firms shrink. This displacement of firms might have a negative impact on employment and welfare.unemployment, marginal employment subsidies, general equilibrium

Entrepreneurial Community Development - Exploring Earned Income Activities and Strategic Alliances for Community Development Nonprofits

This paper examines social entrepreneurship from a community-development perspective. The target audience is community-development nonprofit organizations. The paper begins by contextualizing social entrepreneurship in community development and creating an analytical framework in which to think about efforts of organizations to integrate entrepreneurial and businesslike thinking. The paper presents key findings regarding both earned-income activities and strategic alliances as options for these organizations, as well as 10 key issues that arose as factors that impact their successful implementation. Information was gathered through a literature review, 29 interviews of practitioners, policymakers and academics and a survey of 59 community-development nonprofit organizations