Measuring Competition in the U.S. Airline Industry Using the Rosse-Panzar Test and Cross-Sectional Regression Analyses

We employ the Rosse-Panzar test to assess market performance in selected airport-pairs originating from Atlanta. The Rosse-Panzar test stands in the tradition of the New Empirical Industrial Organization. It is based on the comparative statics of a reduced form revenue equation. Therefore, it is less powerful than structural models, but it offers the advantage of less stringent data requirements and reduces the risk of model misspecifications. The test statistic allows us in most airport-pairs to reject both conducts consistent with the Bertrand outcome, which is equivalent to perfect competition, and the collusive outcome, which is equivalent to joint profit-maximization. Rather, the test statistic suggests that behavior is consistent with a range of intermediate outcomes between the two extremes, including, but not limited to the Cournot oligopoly. In the second part of the paper, a cross-section pricing regression complements the Rosse-Panzar test. It shows that the presence of low-cost competition in an airport-pair reduces the average fare significantly.airlines; oligopoly; conduct; price-cost marginas; Lerner index; Rosse-Panzar test

Fair Estimation of Capital Risk Allocation

In this paper we develop a novel methodology for estimation of risk capital allocation. The methodology is rooted in the theory of risk measures. We work within a general, but tractable class of law-invariant coherent risk measures, with a particular focus on expected shortfall. We introduce the concept of fair capital allocations and provide explicit formulae for fair capital allocations in case when the constituents of the risky portfolio are jointly normally distributed. The main focus of the paper is on the problem of approximating fair portfolio allocations in the case of not fully known law of the portfolio constituents. We define and study the concepts of fair allocation estimators and asymptotically fair allocation estimators. A substantial part of our study is devoted to the problem of estimating fair risk allocations for expected shortfall. We study this problem under normality as well as in a nonparametric setup. We derive several estimators, and prove their fairness and/or asymptotic fairness. Last, but not least, we propose two backtesting methodologies that are oriented at assessing the performance of the allocation estimation procedure. The paper closes with a substantial numerical study of the subject

Mortgage Finance in Central and Eastern Europe: Opportunity or Burden?

Household credit, especially for mortgages, has doubled over the past years in the new European Union member countries, raising concerns about the economic and social consequences of household indebtedness in the event of a macroeconomic crisis. Using household survey data for 2005, 2006, and 2007 for both old and new European Union members, this paper assesses the determinants of access to mortgage finance. It also examines whether mortgage holders were more likely to suffer financial distress compared with non-mortgage holders in the period before the global financial crisis. The analysis does not find any systematic evidence that mortgage holders are financially more vulnerable than renters or outright owners; in fact, the incidence of financial vulnerability generally fell between 2005 and 2007, possibly reflecting the strong income growth experienced by these countries over this period. In addition, although tenure status is more difficult to explain in the new European Union member countries, the analysis finds that many of the same drivers of tenure status in the older member countries generally drive tenure status in the newer member countries as well. Finally, there is no evidence that access to mortgage credit is based on expected income in the old or in the new European Union member countries.household credit, housing finance, financial vulnerability, EU accession

On the Formation of Boxy and Disky Elliptical Galaxies

The origin of boxy and disky elliptical galaxies is investigated. The results of two collisionless N-body simulations of spiral-spiral mergers with mass ratios of 1:1 and 3:1 are discussed and the projected properties of the merger remnants are investigated. It is shown that the equal-mass merger leads to an anisotropic, slowly rotating system with preferentially boxy isophotes and significant minor axis rotation. The unequal-mass merger results in the formation of a rotationally supported elliptical with disky isophotes and small minor axis rotation. The observed scatter in the kinematical and isophotal properties of both classes of elliptical galaxies can be explained by projection effects.Comment: 12 pages, incl. 5 figures, accepted by ApJ Letter

Association of molecules using a resonantly modulated magnetic field

We study the process of associating molecules from atomic gases using a magnetic field modulation that is resonant with the molecular binding energy. We show that maximal conversion is obtained by optimising the amplitude and frequency of the modulation for the particular temperature and density of the gas. For small modulation amplitudes, resonant coupling of an unbound atom pair to a molecule occurs at a modulation frequency corresponding to the sum of the molecular binding energy and the relative kinetic energy of the atom pair. An atom pair with an off-resonant energy has a probability of association which oscillates with a frequency and time-varying amplitude which are primarily dependent on its detuning. Increasing the amplitude of the modulation tends to result in less energetic atom pairs being resonantly coupled to the molecular state, and also alters the dynamics of the transfer from continuum states with off-resonant energies. This leads to maxima and minima in the total conversion from the gas as a function of the modulation amplitude. Increasing the temperature of the gas leads to an increase in the modulation frequency providing the best fit to the thermal distribution, and weakens the resonant frequency dependence of the conversion. Mean-field effects can alter the optimal modulation frequency and lead to the excitation of higher modes. Our simulations predict that resonant association can be effective for binding energies of order $h \times 1$ MHz.Comment: 8 pages latex, figures revised, references updated and typos correcte

Spin induced gigahertz polarization oscillations in vertical-cavity surface-emitting laser devices

Spin-controlled vertical-cavity surface-emitting lasers (VCSELs) have been intensively studied in recent years because of the low threshold feasibility and the nonlinearity above threshold, which make spin-VCSELs very promising for spintronic devices. Here we investigate the circular polarization dynamics of VCSELs on a picosecond time scale after pulsed optical spin injection at room temperature. A hybrid excitation technique combining continuous-wave (cw) unpolarized electrical excitation slightly above threshold and pulsed polarized optical excitation is applied. The experimental results demonstrate ultrafast circular polarization oscillations with a frequency of about 11 GHz. The oscillations last inside the first undulation of the intensity relaxation oscillations. Via theoretical calculations based on a rate equation model we analyze these oscillations as well as the underlying physical mechanisms

Testing the Noncommutative Standard Model at a Future Photon Collider

Extensions of the Standard Model of elementary particle physics to noncommutative geometries have been proposed as a low energy limit of string models. Independent of this motivation, one may consider such a model as an effective field theory with higher-dimensional operators containing an antisymmetric rank-two background field. We study the signals of such a Noncommutative Standard Model (NCSM) and analyze the discovery potential of a future photon collider, considering angular distributions in fermion pair production.Comment: 13 pages RevTeX, Feynman diagrams and figures included, references added, typographical errors in Feynman rules corrected (all results remain unchangend, since correct Feynman rules were used in the calculations), to appear in Phys. Rev.