Quality and location choices under price regulation

In a model of spatial competition, we analyze the equilibrium outcomes in markets where the product price is exogenous. Using an extended version of the Hotelling model, we assume that firms choose their locations and the quality of the product they supply. We derive the optimal price set by a welfarist regulator. If the regulator can commit to a price prior to the choice of locations, the optimal (second-best) price causes overinvestment in quality and an insufficient degree of horizontal differentiation (compared with the first-best solution) if the transportation cost of consumers is sufficiently high. Under partial commitment, where the regulator is not able to commit prior to location choices, the optimal price induces first-best quality, but horizontal differentiation is inefficiently high

Forecasting U.S. Home Foreclosures with an Index of Internet Keyword Searches

Finding data to feed into financial and risk management models can be challenging. Many analysts attribute a lack of data or quality information as a contributing factor to the worldwide financial crises that seems to have begun in the U.S. subprime mortgage market. In this paper, a new source of data, key word search statistics recently available from Google, are applied in a experiment to develop a short-term forecasting model for the number of foreclosures in the U.S. housing market. The keyword search data significantly improves forecast of foreclosures, suggesting that this data can be useful for financial risk management. More generally, the new data source shows promise for a variety of financial and market analyses

Why do patients bypass the nearest hospital? An empirical analysis for orthopaedic care and neurosurgery in the Netherlands

Patient choice behaviour, Hospital bypassing, Hospital competition, I11, C25, D12,

Entry into Banking Markets and the Early-Mover Advantage

Using a sample for 1972-2002 with over 10,000 bank entries into local markets, we find a market share advantage for early entrants. In particular, the earlier a bank enters, the larger is its market share relative to other banks, controlling for firm, market, and time effects, with a market share advantage for early movers between 1 and 15 percentage points, depending on the order of entry. The strongest early-mover advantage is for banks that were in our sample in 1972 and survive into the 1990s. Moreover, early entrants appear to have such hold in the market by strategically investing in larger branch networks. Even controlling for the potential survivorship bias, we find that a bank's share decreases by 0.1 percentage points for a change in its order of entry from "n"th to ("n"+ 1)th. High growth markets show a smaller difference between late and early movers, consistent with a larger fraction of consumers yet to be locked in with a bank in these markets. Copyright 2007 The Ohio State University.