Tacit Collusion in the Presence of Cyclical Demand and Endogenous Capacity Levels

We analyze tacit collusion in an industry characterized by cyclical demand and long-run scale decisions; firms face deterministic demand cycles and choose capacity levels prior to competing in prices. Our focus is on the nature of prices. We find that two types of price wars may exist. In one, collusion can involve periods of mixed strategy price wars. In the other, consistent with the Rotemberg and Saloner (1986) definition of price wars, we show that collusive prices can also become countercyclical. We also establish pricing patterns with respect to the relative prices in booms and recessions. If the marginal cost of capacity is high enough, holding current demand constant, prices in the boom will be generally lower than the prices in the recession; this reverses the results of Haltiwanger and Harrington (1991). In contrast, if the marginal cost of capacity is low enough, then prices in the boom will be generally higher than the prices in the recession. For costs in an intermediate range, numerical examples are calculated to show specific pricing patterns.

Why Do Institutional Plan Sponsors Hire and Fire their Investment Managers?

This paper examines the investment allocation decisions of pension plans, endowments, foundations, and other institutional plan sponsors. The experience and education of plan sponsors and the environment (both regulatory and agency) of the institutional market suggests that institutional investors rely less on past performance and use diffe rent criteria when evaluating performance compared to mutual fund investors. Institutional investors are expected to be less concerned with total returns and more considerate of benchmark-adjusted excess returns, and the consistency with which they are delivered, over longer time horizons. An examination of asset and account flows for actively-managed U.S. equity products is largely consistent with these expectations. The consistency with which managers deliver positive or negative active returns relative to the S&P500 over multiple horizons, without regard to the magnitude of these returns, plays a key role in determining the flow of assets among investment products. Style benchmarks play a larger role in determining account movements, which is found to employ more criteria than asset moves. However, total return is also considered, as the magnitudes of a one-year loss and 3 and 5-year total returns are found to be incremental factors in plan sponsors’ allocation decisions. One explanation for this result is the principal-agent arrangement faced by plan sponsors. Although the sponsors may be more sophisticated than the typical retail investor, their clients, investors and the investment board, may not be. Plan sponsors may minimize job risk by hiring and firing managers based on excess returns with incremental allocations based on total returns, thereby satisfying both their mandate and their clients. It is also found that smaller and older products capture relatively greater flows.pension plans, endowments, foundations

Effect of rounded corners on the magnetic properties of pyramidal-shaped shell structures

In recent years, the advance of novel chemical growth techniques has led to the fabrication of complex, three-dimensional magnetic nanostructures. The corners and edges of such realistic geometries are generally not sharp but rounded. In a previous article we have argued that high demagnetization fields in the vicinity of sharp edges lead to the formation of an asymmetric vortex state in pyramidal-shaped magnetic shell structures. The asymmetric vortex state is potentially interesting with respect to future magnetic memory devices. In this work a micromagnetic model is used to investigate the effect of rounded corners and edges on the magnetic reversal process within these pyramidal-shaped magnetic shell structures. In particular, we explore the degree of rounding, which has to be introduced in order to suppress the asymmetric vortex state. Another emphasis is placed on the magnetic reversal of (quasi-)homogeneous states within these structures. We demonstrate that the rounding of corners significantly reduces the coercivity. This complies with former studies on cuboidal structures, which suggest the important effect of corners on the magnetic reversal of homogeneous magnetic states. The present study uses a finite-element discretization for the numerical solution of the micromagnetic equations, which provides flexibility with respect to the modeling of complex shapes. In particular, this method is very accurate with respect to structures with a smooth surface

Consumption of Methane and CO_2 by Methanotrophic Microbial Mats from Gas Seeps of the Anoxic Black Sea

The deep anoxic shelf of the northwestern Black Sea has numerous gas seeps, which are populated by methanotrophic microbial mats in and above the seafloor. Above the seafloor, the mats can form tall reef-like structures composed of porous carbonate and microbial biomass. Here, we investigated the spatial patterns of CH_4 and CO_2 assimilation in relation to the distribution of ANME groups and their associated bacteria in mat samples obtained from the surface of a large reef structure. A combination of different methods, including radiotracer incubation, beta microimaging, secondary ion mass spectrometry, and catalyzed reporter deposition fluorescence in situ hybridization, was applied to sections of mat obtained from the large reef structure to locate hot spots of methanotrophy and to identify the responsible microbial consortia. In addition, CO_2 reduction to methane was investigated in the presence or absence of methane, sulfate, and hydrogen. The mat had an average δ^(13)C carbon isotopic signature of −67.1‰, indicating that methane was the main carbon source. Regions dominated by ANME-1 had isotope signatures that were significantly heavier (−66.4‰ ± 3.9 ‰ [mean ± standard deviation; n = 7]) than those of the more central regions dominated by ANME-2 (−72.9‰ ± 2.2 ‰; n = 7). Incorporation of ^(14)C from radiolabeled CH_4 or CO_2 revealed one hot spot for methanotrophy and CO2 fixation close to the surface of the mat and a low assimilation efficiency (1 to 2% of methane oxidized). Replicate incubations of the mat with ^(14)CH_4 or ^(14)CO_2 revealed that there was interconversion of CH_4 and CO_2. The level of CO_2 reduction was about 10% of the level of anaerobic oxidation of methane. However, since considerable methane formation was observed only in the presence of methane and sulfate, the process appeared to be a rereaction of anaerobic oxidation of methane rather than net methanogenesis

Pharmaceutical Use Following Generic Entry: Paying Less and Buying Less

We study the effects of generic entry on prices and utilization using both event study models that exploit the differential timing of generic entry across drug molecules and cast studies. Our analysis examines drugs treating hypertension, high blood pressure, type 2 diabetes, and depression using price and utilization data from the Medical Expenditure Panel Survey. We find that utilization of drug molecules starts decreasing in the two years prior to generic entry and continues to decrease in the years following generic entry, despite decreases in prices offered by generic versions of a drug. This decrease coincides with the market entry and increased utilization of branded reformulations of a drug going off patent. We show case study evidence that utilization patterns coincide with changes in marketing by branded drug manufacturers. While the reformulations---often extended-release versions of the patent-expiring drug---offer potential health benefits, the FDA does not require evidence that the reformulations are improvements over the previous drug in order to grant a patent. Indeed, in a number of experiments comparing the efficacies of the patent-expiring and reformulated drugs do not find statistical differences in health outcomes calling into question the patent-extension policy.

Cavity Optomechanical Magnetometer

A cavity optomechanical magnetometer is demonstrated where the magnetic field induced expansion of a magnetostrictive material is transduced onto the physical structure of a highly compliant optical microresonator. The resulting motion is read out optically with ultra-high sensitivity. Detecting the magnetostrictive deformation of Terfenol-D with a toroidal whispering gallery mode (TWGM) resonator a peak sensitivity of 400 nT/Hz^.5 was achieved with theoretical modelling predicting that sensitivities of up to 500 fT/Hz^.5 may be possible. This chip-based magnetometer combines high-sensitivity and large dynamic range with small size and room temperature operation

Caution, Drivers! Children Present: Traffic, Pollution, and Infant Health

Since the Clean Air Act Amendments of 1990 (CAAA), atmospheric concentration of local pollutants has fallen drastically. A natural question is whether further reductions will yield additional health benefits. We further this research by addressing two related research questions: (1) what is the impact of automobile driving (and especially congestion) on ambient air pollution levels, and (2) what is the impact of modern air pollution levels on infant health? Our setting is California (with a focus on the Central Valley and Southern California) in the years 2002-2007. Using an instrumental variables approach that exploits the relationship between traffic, ambient weather conditions, and various pollutants, our findings suggest that ambient pollution levels, specifically particulate matter, still have large impacts on weekly infant mortality rates. Our results also illustrate the importance of weather controls in measuring pollution’s impact on infant mortality.University of California Energy Institute and UC Davis Institute of Transportation Studies. UC Davis Institute of Governmental Affairs, the UC Davis Institute of Transportation Studies, and the TSR&TP through the Atmospheric Aerosols and Health (AAH) Lead Campus program