An empirical analysis of the counterfactual: a merger and divestiture in the Australian cigarette industry

In this paper we empirically analyse two counterfactual situations facing an anti-trust authority following the merger of two of the largest international cigarette companies. First we estimate a nested logit model of demand for cigarettes. The implied elasticity of demand for smoking and implied marginal costs are both broadly consistent with the limited independent estimates available. We then use the model to simulate the proposed merger and the partial divestiture that was accepted by the Australian anti-trust authority. A comparison of the relative price changes predicted by the divestiture simulation with the actual post-divestiture price changes shows the model successfully anticipated the behaviour of the divested brands. This suggests structural econometric analysis using a nested logit may be usefully utilised by anti-trust authorities to assess the welfare implications of proposed mergers and partial divestitures.mergers; divestitures; simulation; cigarettes; anti-trust policy; competition policy

Vietnam's Trade Policy Dilemmas

Vietnam faces alternative options in opening its economy to trade. It is about to join the World Trade Organization; as a member of the ASEAN Free Trade Area it is contemplating extending the regional trade area to include China, Korea and Japan; and it has recently concluded a bilateral agreement with the United States. Opening up to trade is a two-edged sword, with the beneficial effects of improved market access and resource allocation liable to be partially or totally offset by adverse terms of trade effects and significant, albeit one-off, cost of structural adjustment. Simulations of unilateral, bilateral, regional and multilateral liberalization reform and a tariff harmonization scenario are undertaken using a general equilibrium model, GTAP. Results indicate that significant welfare benefits could be obtained from unilateral liberalization without the need to negotiate with others. Harmonization of tariffs at the current average also shows to be beneficial in raising tariff revenues with little need for adjustment. The extension of AFTA brings moderate benefits, as does a multilateral reform which reduces applied tariffs by 50 per cent. There are only limited gains in the agricultural and resources sectors, as these major exports face low tariff barriers. However, the market for Vietnam's textiles and apparel is crucially important.Vietnam, trade, WTO negotiations

Extended Non-Binary Low-Density Parity-Check Codes over Erasure Channels

Based on the extended binary image of non-binary LDPC codes, we propose a method for generating extra redundant bits, such as to decreases the coding rate of a mother code. The proposed method allows for using the same decoder, regardless of how many extra redundant bits have been produced, which considerably increases the flexibility of the system without significantly increasing its complexity. Extended codes are also optimized for the binary erasure channel, by using density evolution methods. Nevertheless, the results presented in this paper can easily be extrapolated to more general channel models.Comment: ISIT 2011, submitte

Investing social security trusts funds in the stock market

Social security ; Stock market

Almost all extraspecial p-groups are Swan groups

Let P be an extraspecial p-group which is neither dihedral of order 8, nor of odd order p^3 and exponent p. Let G be a finite group having P as a Sylow p-subgroup. Then the mod-p cohomology ring of G coincides with that of the normalizer N_G(P).Comment: 5 page