An aggregate Laffer curve – a multi-peak case

In the current paper we propose to distinguish between micro and aggregate Laffer functions. We prove that in spite of the fact that a Laffer curve of any representative individual may have one peak point where tax revenue is at its maximum, the aggregate Laffer curve is more likely to have multiple peaks. We show this for the case where there is a high degree of wage distribution inequality along with a backward bending supply curve of labor, which appears to be the case for many Western countries. Since this scenario is typical of many countries, the welfare implications of the multi-peak Laffer curve should be considered by the policy maker

The effects of rumours on financial market efficiency

During the last decade the world has faced a tremendous development of information technology and telecommunication. This study investigates the impact of rumours (released on the web) on common stock returns. The findings indicate that the market responds positively to rumours. During the event day and the five preceding days, the abnormal stock return is positive and statistically significant. In particular, the impact is stronger for single than for multi-rumours, for initial rather than subsequent rumours and for realized rumours than for nonrealized rumours.

The Network Industry, Monopoly Regulation, and Social Optimum

Abstract This paper examines pricing policy, quality levels, consumer surplus and social welfare for the monopoly and non‐monopoly case. It is shown that given certain realistic assumptions, the network industry under unregulated monopoly would yield more social welfare than in the case of several producers in the industry, and would therefore be socially preferred.Monopoly, Duopoly, Quality, Network Externalities, Social Optimum, D4, D62, L1,