Demand Shocks, Capacity Coordination and Industry Performance: Lessons from Economic Laboratory

Antitrust exemptions granted to businesses under extenuating circumstances are often justified by the argument that they benefit the public by helping producers adjust to otherwise difficult economic circumstances. Such exemptions may allow firms to coordinate their capacities, as was the case of post-September 11, 2001 antitrust immunity granted to Aloha and Hawaiian Airlines. We conduct economic laboratory experiments to determine the effects of explicit capacity coordination on oligopoly firms' abilities to adjust to negative demand shocks and on industry prices. The results suggest that capacity coordination speeds the adjustment process, but also has a clear pro-collusive effect on firm behavior.economic experiments; demand shocks; capacity coordination; collusion

Demand Shocks, Capacity Coordination and Industry Performance: Lessons from Economic Laboratory

Antitrust exemptions granted to businesses under extenuating circumstances are often justified by the argument that they benefit the public by helping producers adjust to otherwise difficult economic circumstances. Such exemptions may allow firms to coordinate their capacities, as was the case of post-September 11, 2001 antitrust immunity granted to Aloha and Hawaiian Airlines. We conduct economic laboratory experiments to determine the effects of explicit capacity coordination on oligopoly firms' abilities to adjust to negative demand shocks and on industry prices. The results suggest that capacity coordination speeds the adjustment process, but also has a clear pro-collusive effect on firm behavior.

Guest Recital: Kevin Hampton and Lyle Indergaard, piano

Kennesaw State University School of Music presents Guest Recital: Kevin Hampton, piano and Lyle Indergaard, piano.https://digitalcommons.kennesaw.edu/musicprograms/1554/thumbnail.jp

When Do Security Markets Aggregate Dispersed Information?

We attempt to replicate a seminal paper that offered support for the rational expectations hypothesis and reported evidence that markets with certain features aggregate dispersed information. The original results are based on only a few observations, and our attempt to replicate the key findings with an appropriately powered experiment largely fails. The resulting poststudy probability that market performance is better described by rational expectations than the prior information (Walrasian) model under the conditions specified in the original paper is very low. As a result of our failure to replicate, we investigate an alternate set of market features that combines aspects of the original experimental design. For these markets, which include both contingent claims and homogeneous dividend payments (as in many prediction markets), we do find robust evidence of information aggregation in support of the rational expectations model. In total, our results indicate that information aggregation in asset markets is fragile and should only be expected in limited circumstances

Reconsidering Rational Expectations and the Aggregation of Diverse Information in Laboratory Security Markets

The ability of markets to aggregate diverse information is a cornerstone of economics and finance, and empirical evidence for such aggregation has been demonstrated in previous laboratory experiments. Most notably Plott and Sunder (1988) find clear support for the rational expectations hypothesis in their Series B and C markets. However, recent studies have called into question the robustness of these findings. In this paper, we report the result of a direct replication of the key information aggregation results presented in Plott and Sunder. We do not find the same strong evidence in support of rational expectations that Plott and Sunder report suggesting information aggregation is a fragile property of markets

Reconsidering Rational Expectations and the Aggregation of Diverse Information in Laboratory Security Markets

The ability of markets to aggregate dispersed information is a cornerstone of economics and finance. In a seminal experiment, Plott and Sunder (1988) offer support for the rational expectations hypothesis. However, recent laboratory experiments have called into question the robustness of those initial results. In this paper, we offer the first attempt to directly replicate key findings of the original study. Failing to replicate their results, the post-study probability that market performance is better described by rational expectations than the prior information (Walrasian) model is low. Given this result, we introduce a new treatment that implements a market structure consistent with naturally occurring prediction markets, which can be viewed as completing the original experimental design. In this new treatment, we find strong support for the rational expectations model. Thus, while the original paper showed conditions where markets can aggregate information, we attempt to identify sufficient conditions for such aggregation to be robust

Evidence for Prosody in Silent Reading

English speakers and expressive readers emphasize new content in an ongoing discourse. Do silent readers emphasize new content in their inner voice? Because the inner voice cannot be directly observed, we borrowed the cap-emphasis technique (e.g., “toMAYto”) from the pronunciation guides of dictionaries to elicit prosodic emphasis. Extrapolating from linguistic theories of focus prosody in spoken English, we predicted and found that silent readers in experiment 1 preferred cap-emphasized, newsworthy content (“James stole the BRACELET ) when the just-read story left them wondering what was stolen (compared with control trials). Readers preferred “JAMES stole the bracelet” when left wondering who the thief was. Experiment 2 generalized our findings to newsworthy function words and to a new behavioral measure, reaction time. As predicted, “He CAN” was judged more quickly and accurately following “Can he swim,” whereas “HE can” was judged more quickly and accurately following “Who can swim?” Our results suggest that readers engage focus prosody when they read silently

Ampullary cancers harbor ELF3 tumor suppressor gene mutations and exhibit frequent WNT dysregulation

The ampulla of Vater is a complex cellular environment from which adenocarcinomas arise to form a group of histopathologically heterogenous tumors. To evaluate the molecular features of these tumors, 98 ampullary adenocarcinomas were evaluated and compared to 44 distal bile duct and 18 duodenal adenocarcinomas. Genomic analyses revealed mutations in the WNT signaling pathway among half of the patients and in all three adenocarcinomas irrespective of their origin and histological morphology. These tumors were characterized by a high frequency of inactivating mutations of ELF3, a high rate of microsatellite instability, and common focal deletions and amplifications, suggesting common attributes in the molecular pathogenesis are at play in these tumors. The high frequency of WNT pathway activating mutation, coupled with small-molecule inhibitors of β-catenin in clinical trials, suggests future treatment decisions for these patients may be guided by genomic analysis

Live. Tell. Resist.

This edition of First-Gen Voices features the stories and work of 24 first-generation college students at multiple higher education institutions. The aim is to disseminate a story about us, for us, and consequently, the dominant cultures that have yet to learn from our power

Myeloma cells suppress osteoblasts through sclerostin secretion

Wingless-type (Wnt) signaling through the secretion of Wnt inhibitors Dickkopf1, soluble frizzled-related protein-2 and -3 has a key role in the decreased osteoblast (OB) activity associated with multiple myeloma (MM) bone disease. We provide evidence that another Wnt antagonist, sclerostin, an osteocyte-expressed negative regulator of bone formation, is expressed by myeloma cells, that is, human myeloma cell lines (HMCLs) and plasma cells (CD138+ cells) obtained from the bone marrow (BM) of a large number of MM patients with bone disease. We demonstrated that BM stromal cells (BMSCs), differentiated into OBs and co-cultured with HMCLs showed, compared with BMSCs alone, reduced expression of major osteoblastic-specific proteins, decreased mineralized nodule formation and attenuated the expression of members of the activator protein 1 transcription factor family (Fra-1, Fra-2 and Jun-D). Moreover, in the same co-culture system, the addition of neutralizing anti-sclerostin antibodies restored OB functions by inducing nuclear accumulation of β-catenin. We further demonstrated that the upregulation of receptor activator of nuclear factor κ-B ligand and the downregulation of osteoprotegerin in OBs were also sclerostin mediated. Our data indicated that sclerostin secretion by myeloma cells contribute to the suppression of bone formation in the osteolytic bone disease associated to MM