Bundling without price discrimination

This paper examines the optimal bundling strategies of a multiproduct monopoly in markets in which a seller cannot monitor and thereby restrict the purchases of buyers to a single bundle, while buyers have resale opportunities. In such markets, the standard mechanism through which bundling increases seller profits, based on price discrimination, is not feasible. The profit-maximizing bundling strategy is characterized, given the restrictions on pricing policies resulting from resale and a lack of monitoring. The welfare implications of optimal bundling are analyzed

A model for a large investor trading at market indifference prices. I: single-period case

We develop a single-period model for a large economic agent who trades with market makers at their utility indifference prices. A key role is played by a pair of conjugate saddle functions associated with the description of Pareto optimal allocations in terms of the utility function of a representative market maker.Comment: Shorten from 69 to 30 pages due to referees' requests; a part of the previous version has been moved to "The stochastic field of aggregate utilities and its saddle conjugate", arXiv:1310.728

No-arbitrage, state prices and trade in thin financial markets

We examine how non-competitiveness in financial markets affects the choice of asset portfolios and the determination of equilibrium prices. In our model, potential arbitrage is conducted by a few highly specialized institutional investors who recognize and estimate the impact of their trades on financial prices. We apply a model of economic equilibrium, based on Weretka (http://www.ssc.wisc.edu/~mweretka/Research, 2007a), in which price effects are determined endogenously as part of the equilibrium concept. For the case in which markets allow for perfect insurance, we argue that the principle of no-arbitrage asset pricing is consistent with non-competitive behavior of the arbitragers and extend the fundamental theorem of asset pricing to the non-competitive setting

Competition in financial innovation

This paper examines the incentives offered by frictionless markets for innovation of assetbacked securities. Assuming homogeneous preferences across investors with heterogeneous risk-sharing needs and allowing for short selling of securities, we characterize economies in which competition provides insufficient incentives to innovate so that, in equilibrium, asset markets are incomplete in all (pure strategy) equilibria—even when innovation is essentially costless. Thus, we provide an alternative to Allen and Gale’s (1991) classic foundation for endogenous market incompleteness

Expression of platelet-bound stromal cell-derived factor-1 in patients with non-valvular atrial fibrillation and ischemic heart disease

Summary. Aims:Blood cell infiltration and inflammation are involved in atrial remodelling during atrial fibrillation (AF) although the exact mechanisms of inflammatory cell recruitment remain poorly understood. Platelet-bound stromal cell-derived factor-1 (SDF-1) is increased in cases of ischemic myocardium and regulates recruitment of CXCR4+ cells on the vascular wall. Whether platelet-bound SDF-1 expression is differentially influenced by non-valvular paroxysmal or permanent atrial fibrillation (AF) in patients with stable angina pectoris (SAP) or acute coronary syndrome (ACS) has not been reported so far. Methods and results:A total of 1291 consecutive patients with coronary artery disease (CAD) undergoing coronary angiography were recruited. Among the patients with SAP, platelet-bound-SDF-1 is increased in patients with paroxysmal AF compared with SR or to persistent/permanent AF (P<0.05 for both). Platelet-bound SDF-1 correlated with plasma SDF-1 (r=0.488, P=0.013) in patients with AF and ACS, which was more pronounced among patients with persistent AF (r=0.842, P=0.009). Plasma SDF-1 was increased in persistent/permanent AF compared with SR. Patients with ACS presented with enhanced platelet-bound-SDF-1 compared with SAP. Interestingly, among patients with ACS, patients with paroxysmal or persistent/permanent AF presented with an impaired platelet-bound SDF-1 expression compared with patients with SR. Conclusions:Differential expression of platelet-bound and plasma SDF-1 was observed in patients with AF compared with SR which may be involved in progenitor cell mobilization and inflammatory cell recruitment in patients with AF and ischemic heart disease. Further in vivo studies are required to elucidate the role of SDF-1 in atrial remodeling and the atrial fibrillation course. © 2011 International Society on Thrombosis and Haemostasis

Demand Reduction and Inefficiency in

Auctions typically involve the sale of many related goods. Treasury, spectrum and electricity auctions are examples. In auctions where bidders pay the market-clearing price for items won, large bidders have an incentive to reduce demand in order to pay less for their winnings. This incentive creates an inefficiency in multiple-item auctions. Large bidders reduce demand for additional items and so sometimes lose to smaller bidders with lower values. We demonstrate this inefficiency in an auction model which allows interdependent values. We also establish that the ranking of the uniform-price and pay-as-bid auctions is ambiguous in both revenue and efficiency terms. Bidding behavior in spectrum auctions, electricity auctions, and experiments highlights the empirical importance of demand reduction