Market equilibrium with search and computational costs

Although it is an empirical regularity that in the trade of homogeneous goods there is persistent price dispersion and buyers search for low-priced items, theoretically we find that in market equilibrium, when buyers are optimisers (the neo-classical framework), these regularities do not occur. Summing this undesirable theoretical result to the fact that the computation of optimal strategies is demanding, the relevance of using optimisation models in rationalising human behaviour is put in question. Even so, Lucas (1981) claims that optimisation models should not be abandoned because only these are “able to isolate those aspects of behaviour that remain invariant to policy shifts from those that do not”. In this work, following Lucas’ claim, we introduce economic agents as having computational limitations in the neo-classical optimisation model, which is new in the literature. As a result of this alteration to the model, in market equilibrium, we observe both price dispersion and search when buyers have information and computational limitations.Computational limitations, Optimisation, Search, Market equilibrium

Multi Product Market Equilibrium with Sequential Search

In this paper I investigate whether, in market equilibrium, one observes price dispersion and search when buyers intend to acquire several products whose price is unknown and exists a positive search cost. Although that seems fruitful, I prove that in market equilibrium it is not observed neither price dispersion nor search and shops act as if they where monopolists. Nevertheless, there is one property of the theory that is in accordance with empirical data, namely the continuous increase in the number and dimension of larger shops.Search, Price Dispersion, Market Equilibrium, Multi-products

The importance in the papers' impact of the number of pages and of co-authors - an empirical estimation with data from top ranking economic journals

On a regular basis the scientific output of academic people has to be evaluated, e.g. to decide tenure. A very important item in this evaluation is the published papers’ quality that tends to be approximated by its impact in the literature. As the measure of this impact requires a long-term analysis, thus it is used as its estimator the journal average impact where each paper is published. But some papers have a single author while others have several and some papers have one or two pages while others have more than fifty. In this work I validate the conjecture that these two variables have a significant and positive effect in papers’ future impact, i.e. in papers quality. Nonetheless, I quantify that this two variables jointly considered merely explain 2.8% of papers’ impact variability.Scientific Skill, Co-authorship, Papers’ impact

Introdução à Teoria do Consumidor

Este livro é um guia de apoio a Microeconomia contendo dois pontos programáticos. No 1.º capítulo, apresento o mercado desagregado em três Leis da Natureza: i) que as pretensões dos vendedores se agregam na função de oferta; ii) que as pretensões dos compradores se agregam na função de procura; e iii) que o mercado equilibra as pretensões dos compradores com as dos vendedores. No 2.0 capítulo apresento a função de procura com o resultado de consumidores que maximizam uma função de utilidade sob restrição do rendimento que têm disponível e dos preços de mercado.Curva de indiferença, Restrição orçamental, Maximização da utilidade

Animals domestication and agriculture as outcomes of collusion

Although it is known that there are circumstances where the competitive situation does not promote social welfare maximization, collusion is usually associated with firms’ strategies that decrease welfare. In this paper, using the theoretical framework of the industrial organization, I demonstrate in a model with two sectors that the economic revolution induced by the animal domestication and the agriculture is an outcome from the strengthen in collusion between human beings in the course of historical time and not vice-versa.Collusion, welfare progress, domestication, agriculture emergence

A comment on efficiency gains and myopic antitrust authority in a dynamic merger game

This paper relaxes the Motta & Vasconcelos’ (2005) short-term assumption that firms’ capital is fixed. We demonstrate that, contrary to the conclusion of that article, in the best interest of consumers, even when firms have large economies of scale, long-term forward-looking Antitrust Authorities must block firms’ merger plans whenever profits of firms are positive.Antitrust policy, Economies of scale

Integrating fire risk into the management of forests

In a standard cash-flow data-sheet analysis, the quantification of the impact of exogenous variables and management decisions on the investment’s Net Present Value is limited to only a few scenarios. This perspective is insufficient for an efficient risk management in complex business environments. In this work, I present a dynamic programming model that takes into consideration fire risk. Having applied the model to forest management, I conclude that when fire risk increases, it is optimal for the manager to increase the area used per tree and the cut-off weight of stems. Rather than increasing the business Expected Net Present Value (that, with real interest rate of 3%/year, is between 1.5€/m2 and 2.2€/m2), the optimal strategy decreases the business risk. Additionally, I conclude from the model that there is no private incentive to carry out fire risk prevention.Risk Management, Project Evaluation, Expected Net Present Val

A new economic journals’ ranking that takes into account the number of pages and co-authors

In this article, I examine whether the academics reward policy must correlate positively with the number of published articles per co-author, the number of pages and journal reputation. This is accomplished by estimating a non-linear model with a panel data from 168 economics journals covered in the ISI-Web of Knowledge database (58825 articles). The data reinforces the conjecture that published article value is slightly increasing with the number of co-authors and is proportional to the number of pages. The data also suggests that there are 4 distinct groups related to journal quality that I name A, B+, B and B–.Co-authorship, Value of articles, Assessment of output

The Impact of Monetary Shocks on Product and Wages: A neoclassical aggregated dynamic model

In this work, I present an extension of Kydland and Prescott’s (K&P) model. The extension is to consider that prices and wages are nominal and that economic agents anticipate the probability of occurrence of exogenous shocks. Once calibrated the model, I compute the nominal and real dynamic response to a monetary shock. The results observed are in agreement with the economic stylised facts: there are permanent nominal effects but only short-term real effects. An interesting issue to pursue in future research would be to quantify the influence of money in the business cycle and to compare the results obtained with those in the real model of K&P.Business Cycle, Economic nominal variable, Monetary shocks, Microfoundation.

Nuclear high-radioactive residues: a new economic solution based on the emergence of a global competitive market

Nuclear energy is economic and does not emit CO2 but has two central setbacks. First, it has not been yet implemented an efficient method of disposing the spent fuel. Second, the reactors’ complexity is expensive and turns possible the occurrence of accidents. In this paper, first I propose a very simple, economic and safe boiling heavy-water reactor that may constitute a way of mitigating these setbacks. The reactor is a container filled with a hydraulic suspension of fuel that is crossed-over by two fluxes: by one side, the fuel suspension that remains 250 days in the reactor and, by another side, the cooler that remains 50 seconds in the reactor. Second, I discuss that the solution of nuclear high-radioactive residues problem passes by the emergence of a global competitive market.Nuclear reactor; Heavy water; Boiling water; Continuous fuel feeding; IV generation; Nuclear residues pricing and trading