The impact of price adjustment costs on price dispersion in E-commerce

We analyze price dispersion using panel data from a large price comparison site. We use past pricing behavior to instrument for potential endogeneity that might result from the selection of firms to certain product markets. We find that greater price adjustment costs result in greater price dispersion. Although the impact of price adjustment costs on price dispersion became weaker over time, the causal effect of price adjustment costs on price dispersion is still present at the end of the period. Our results are robust to many alternative empirical speciffications. We also test a range of alternative explanations of price dispersion, such as search cost, service differentiation, obfuscation, vertical restraints, and market structure.Series: Department of Economics Working Paper Serie

Consumption Based Capital Asset Pricing and the Austrian Stock Exchange

Abstract: Using data from the Vienna Stock Exchange we investigate three different types of consumption based capital asset pricing models: the well known two state model of Mehra and Prescott, the model of Rietz, which includes also a crash state, and an own four state model. The aim of this Vienna Stock Exchange during the 1980s into account. For all the models we calculate the risk premium in order to see whether the models could explain the empirically observed risk premium. For the calculation of risk premia we use estimators generated by the General Method of Moments.

Training and Union wages

This paper investigates whether unions, through imposing wage floors that lead to wage compression, increase on-the-job training. Our analysis focuses on Germany. Based on a model of unions and firm-financed training, we derive empirical implications regarding apprenticeship training intensity, layoffs, wage cuts, and wage compression in unionized and nonunionized firms. We test these implications using firm panel data matched with administrative employee data. We find support for the hypothesis that union recognition, via imposing minimum wages and wage compression, increases training in apprenticeship programs

The Financial Market Crisis and its Consequences for Competition Policy

Any analysis which limits the causes of the financial and economic crisis to either market failure or to the failure of the state can only be viewed as superficial. The causes are rather a combination of both these factors. Had there been a more clearly defined division between the role of the state and that of the private sector in an economy, many problems may never have arisen in the first place. Therefore, one of the main lessons to be learned from the crisis is that the state should actually concentrate on its main task, namely creating the necessary framework conditions for a well functioning market. In order to achieve this the state needs to withdraw to a large extent from any direct economic activities. If the state successfully creates the necessary regulatory framework and manages to ensure both its constancy and that it is adhered to, its own withdrawal from business activities need not per se involve a destabilisation of the markets.Financial Market Crisis; Competition Policy

The Privatisation of Public Assets as an Economic Policy Instrument: Private versus Public Ownership of Companies – Empirical Evidence and Considerations for Industrial Location Policy

This second contribution to WIFO's series of articles on privatisation focuses on the analysis of the empirical evidence. It also investigates which extent of government withdrawal from state-owned enterprises would be optimal from the perspective of industrial location policy. According to the international empirical evidence private ownership is generally the more efficient and more profitable form of ownership by economic standards. Only in narrowly defined exceptions, if functioning competition cannot be achieved via the respective regulation as, e.g., in the case of services of general interest, a permanent strategic investment by the government as core shareholder is justified from an economic perspective.Privatisation Empirical Evidence Private Ownership Public Ownership

Competition Policy in the Wake of the Economic Crisis

Scandinavian countries are pursuing a successful two-pronged economic policy strategy with a focus on future-orientated investment and competition which could serve as a model for Austria. While the need to close the gap in Austrian economic policy in terms of future-orientated investment has been recognised, the intensification of competition as a possible tool has been neglected. The strengthening of competition, in the framework of a consolidation of the public budget, represents an attractive economic policy option to increase growth and employment in Austria. Competitiveness could be sustainably strengthened through a proactive orientation of overall competition policy that phases out competition-distorting regulations and subsidies as well as through privatisations.Competitiveness, Economic Crisis, Financial Crisis

The Future of Industrial Support Policies in Austria. The Need for Reforms in a Changed Business Environment

Fiscal austerity programs and the EU's competition rules require a concentration of industrial support policies in a few selected support programs, and a comprehensive organizational reform with the goal of raising the efficiency of Austria's system of public support to industry. Given the changed business environment, future public support to industry will come mainly in the form of structural and locational policies.Die Zukunft der Wirtschaftsförderung in Österreich. Der Reformbedarf des Systems aufgrund geänderter Rahmenbedingungen; The Future of Industrial Support Policies in Austria. The Need for Reforms in a Changed Business Environment