petrol prices oil price rises and oil price falls some evidence for the uk since 1972 this paper examines the relationship between retail petrol prices excise duties and crude oil prices in the uk over the period 1973 1988 the existence of a stable relationship between the petrol price level of excise duty and spot oil price is confirmed through use of the cointegration approach although the speed of reaction of petrol prices to changes in the crude price depends on whether crude prices are rising or falling any asymmetry in the pricing response is virtually absent after an adjustment period of only four months

oil price volatility and the asymmetric response of gasoline prices to oil price increases and decreases this paper analyzes the effect of volatility in oil prices on the degree of asymmetry in the response of gasoline prices to oil price increases and decreases several time series measures of the asymmetry between the responses of gasoline prices to oil price increases and decreases and several measures of the oil price volatility are constructed in all models the degree of asymmetry in gasoline prices declines with an increase in oil price volatility the results support the oligopolistic coordination theory as a likely explanation of the observed asymmetry and are not consistent with the standard search theory and the search theory with bayesian updating

retail fuel price adjustment in germany a threshold cointegration approach abstract consumers in germany often complain that retail fuel prices usually adjust quickly to crude oil price increases than decreases and characterize this pricing pattern as market power exploitation in this paper we use both weekly national and daily city specific berlin hamburg munich and cologne data to investigate the extent to which retail fuel prices in germany adjust to changes in the international crude oil price at the national level with weekly prices we find positive asymmetries for both gasoline and diesel within the period 2003 2007 reflecting that retail prices react more swiftly to crude oil price increases than decreases in contrast for 2009 2013 we observe symmetric adjustment and negative asymmetry for retail diesel and gasoline prices respectively the city level analysis supports our findings in the latter time period thus regulatory measures aimed at the retail fuel market over recent years seem to have been effective and contrary to consumers perception we find no evidence for excessive market power or collusion

price asymmetry in the dutch retail gasoline market abstract this article analyses the retail price adjustments in the dutch gasoline market we estimate an asymmetric error correction model on weekly price changes for the years 1996 2001 we construct five datasets one for each working day the conclusions on asymmetric pricing are shown to differ over these datasets suggesting that the choice of the day for which the prices are observed matters more than commonly believed in our view the insufficient robustness of the outcomes might explain the mixed conclusions found in the literature using these two approaches we also show that the effect of asymmetry on the dutch consumer costs is negligible

causes for an asymmetric relation between the price of crude oil and refined petroleum products we revisit the issue of asymmetries in the relation between the price of crude oil and refined petroleum products in the united states an econometric analysis of monthly data indicates that the asymmetric relation between the price of crude oil and motor gasoline is generated by refinery utilization rates and inventory behavior the asymmetric relation between the price of crude oil and home heating oil probably is generated by contractual arrangements between retailers and consumers together these results imply that price asymmetries may be generated by efficient markets under these conditions there is little justification for policy interventions to reduce or eliminate price asymmetries in motor gasoline and home heating oil markets

testing for asymmetric pricing in the canadian retail gasoline market abstract this paper applies a threshold regression model to test for asymmetric pricing in the retail gasoline market in canada using weekly data for the period january 1990 to december 1996 we present results for 13 canadian cities for both premium and regular gasoline within the context of an error correction model we test for the presence of asymmetric price behaviour using average changes in crude prices as well as various lags for the change in crude as possible thresholds we are unable to find any evidence to support this view

asymmetric error correction models for the oil gasoline price relationship abstract the existing literature on price asymmetries does not systematically investigate the sensitivity of the empirical results to the choice of a particular econometric specification this paper fills this gap by providing a detailed comparison of the three most popular models designed to describe asymmetric price behavior namely asymmetric ecm autoregressive threshold ecm and ecm with threshold cointegration each model is estimated on a common monthly data set for the gasoline markets of france germany italy spain and uk over the period 1985 2003 all models are able to capture the temporal delay in the reaction of retail prices to changes in spot gasoline and crude oil prices as well as some evidence of asymmetric behavior however the type of market and the number of countries which are characterized by asymmetric oil gasoline price relations vary across models the asymmetric ecm prescribes that long run price asymmetries are most likely to be found in the second stage of the transmission chain conversely the ecm with threshold cointegration suggests that long run price asymmetries vary across countries and markets short run price asymmetries are captured by the asymmetric ecm specification and the tar ecm the latter model suggests that all european countries are likely to be affected by asymmetries at the distribution stage while the results obtained with the asymmetric ecm are mixed

rockets and feathers the asymmetric speed of adjustment of uk retail gasoline prices to cost changes abstract the paper develops a quadratic quantity adjustment model to test the hypothesis put forward in the recent monopolies and mergers commission report that the speed of adjustment of uk retail gasoline prices to cost changes is more rapid when costs rise than when they fall and that the adjustment path is more concentrated around the mean value on the upswing using data from 1982 to 1989 evidence of faster and more concentrated responses to cost increases were found

sutton s sunk costs and market structure price competition advertising and the evolution of concentration sunk costs and market structure price competition advertising and the evolution of concentration the third area is critical for policy this has kept our attention focused on the other two areas not until we understand the causes and consequences of concentrated industry structure can we comment on the relevant welfare economics the positive economics of entry exit and the persistence of dominant firms and oligopolies are thus a core research topic the positive questions are very difficult like many posed by the world and not by logic traditional empirical efforts to distinguish among competing hypotheses have made little progress this is due in no small part to the complexity of the question the two main efficiency defenses of concentrated industry structure are scale economies and firm heterogeneity traditional methods use proxies for barriers to entry that could equally plausibly be proxies for the efficiencies recent theoretical work on entry and entry barriers has been very successful in teaching us about the importance of strategy irreversibility and information but it has not emphasized links to observables the observable differences between a theory predicting nearly efficient outcomes and a related theory predicting harmful barriers to entry can be very subtle to use theory in a direct way it seems we must draw dozens

european gasoline markets price transmission asymmetries in mean and variance the main objective of this article is to analyse the different sources of asymmetric price transmissions in the fuel market for france germany and spain during the last decades the eu has carrie

reading cournot reading nash the creation and stabilisation of the nash equilibrium the concept of the cournot nash equilibrium is central to noncooperative game theory and the latter s use in macroeconomic theory this paper considers the creation of this theoretical construct examining the separate contributions of both cournot and nash and showing how the two were ultimately joined together in the eyes of contemporary economic theorists rather than simply showing how cournot served as a precursor to nash the author challenges the traditional approach and emphasizes the shifts in interpretation of their respective contributions in so doing he addresses some pertinent questions about the manner in which economic theorists view the evolution of their own discipline copyright 1994 by royal economic society

new evidence on the link between housing environment and children s educational attainments abstract there is extensive literature that posits the hypothesis that a better housing environment enhances a child s educational attainment however there is little causal evidence demonstrating the presence of this effect in this study we examine the effect of housing environment on a child s educational attainment using census files covering the entire population of taiwan because the taiwan census data contains unique address information for every household we try to control the neighborhood effect and unobserved family heterogeneity by comparing a child with his peers of the same age cohort in the same neighborhood after accounting for tens of thousand area dummies the chance of high school enrollment for teens aged 16 and 17 and college enrollment for young adults aged 19 and 20 is found to be positively correlated with an increase in floor space an increase in residential stability and with homeownership but negatively correlated to an increase in housing crowdedness and an increase in building age among these housing variables residential stability and homeownership are the ones generating the largest positive effects on the child s schooling

why is taiwan s homeownership rate so high with an annual growth rate of 0 62 per cent since 1980 taiwan s homeownership rate reached 88 per cent in 2007 this study explores possible causes of taiwan s high homeownership rates the instit

the influence of economics on antitrust law economists today play prominent roles in formulating antitrust policy and litigating antitrust cases this paper explains why economics influences antitrust law and describes how economic theories enter and shape the antitrust system antitrust policy and doctrine change over time in response to developments in economic theory and the decentralization of the antitrust adjudication system and the wide latitude accorded judges in interpreting antitrust statutes ensure that legal rules will reflect advances in the economic literature concerning the appropriate content of standards governing business conduct i introduction twenty five years ago george stigler 1976 asked whether economists matter in the formulation of public policy a century of experience with the federal antitrust laws indicates that they do whereas assessments of their impact vary most observers regard economists as important participants in the antitrust system eisner 1991 emphasizes the modern imprint of chicago school economic perspectives upon antitrust enforcement and litigation rowe 1984 and hovenkamp 1989 show that economists and economic theory have influenced antitrust doctrine and policy throughout the period since the passage of the sherman act as a rough contemporary market test one can simply note the expanding number of economic consulting firms for whom antitrust counselling and litigation are staples of the practice 1 this allocation of society s resources is a reliable sign that economic analysis is significant in the prosecution and adjudication of antitrust cases this paper suggests why economists and economic learning matter to antitrust policy and describes how the work of economists affects antitrust litigation the discussion is divided into four parts the first identifies features of the antitrust system that permit or require economic ideas to be taken seriously the second part considers how antitrust relevant economic ideas are generated and absorbed into the antitrust system the third part examines factors that determine how deeply economic ideas influence antitrust adjudication the paper concludes by discussing how economics will influence the antitrust system in the sherman act s second century ii the openness of the antitrust system to economic ideas economic analysis influences antitrust litigation because the federal antitrust system is unusually permeable this permeability is the result of three important features of the antitrust system the first is the wide range of analytical criteria that courts are permitted to consider in resolving antitrust disputes federal judges play a central role in determining the content of the antitrust statutes outcomes under the sherman act depend crucially upon the construction of ambiguous terms such as conspiracy in restraint of trade and monopolize as salop and white 1988 37 point out the decision to cast the statutes in general terms has given judges substantial discretion to determine litigation outcomes by defining the content of the statutes operative terms in conferring this interpretive role upon the federal courts congress has allowed judges to devise standards of conduct at least in part by reference to the likely economic effects of various forms of business behavior despite sharp disagreement over the weight congress meant to accord productive and allocative efficiency as judicial decision making criteria 2 few scholars seriously argue that congress intended that courts treat such concerns as irrelevant economists would play a far less important part in antitrust adjudication if congress had precluded judicial consideration of efficiency in implementing statutory commands the open ended language and indeterminate goals of the antitrust statutes allow economists to affect adjudication and rule formulation to a degree unattainable under most other federal regulatory schemes

retail price cycles and response asymmetry weekly retail gasoline prices in windsor ontario from 1989 to 1994 appear to respond faster to wholesale price increases than to decreases but exhibit a cyclic pattern inconsistent with a common explanation of response asymmetry i reconcile these observations through a model of price cycles prices on the downward portion of the cycle appear insensitive to costs compared with price increases supporting the theory that price decreases result from battles over market share this pattern resembles a faster response to cost increases than to decreases and the conclusion that asymmetry indicates a role for competition policy may be inappropriate jel classification l13 l71 cycles des prix de detail et reponse asymetrique les prix de detail hebdomadaires de la gazoline a windsor ont entre 1989 et 1994 semblent reagir plus vite aux accroissements qu aux chutes des prix de gros mais suivent un pattern cyclique qui ne semble pas consistant avec l explication traditionnelle en termes de reponse asymetrique l auteur reconcilie ces observations a l aide d un modele de cycle de prix les prix dans la portion descendante du cycle semblent insensibles aux variations de couts par comparaison avec les accroissements de prix ce qui supporte la theorie que les chutes de prix resultent de luttes pour les parts de marche le pattern ressemble a celui declenche par une reponse plus rapide aux augmentations qu aux chutes de couts et la conclusion qui voudrait qu on puisse attribuer le tout a l asymetrie des reponses et que donc une intervention de la politique de la concurrence s impose peut etre inappropriee

sticky prices inventories and market power in wholesale gasoline markets a model with costly adjustment of production and costly inventories implies that wholesale gasoline prices will respond with a lag to crude oil cost shocks unlike explanations that rely upon menu costs imperfect information or long term buyer seller relationships this model predicts that futures prices for gasoline will adjust incompletely to crude oil price shocks that occur close to the expiration date of the futures contract we test and confirm this implication examining wholesale price responses in 188 gasoline markets we also find that firms with market power adjust prices more slowly than do competitive firms consistent with the model

oil and pump prices testing their asymmetric relationship in a robust way abstract the aim of this study is to provide a novel method to assess whether retail fuel prices respond asymmetrically to changes in the international crude oil prices to do so we consider the whole supply chain we use daily data and we depart from the current practice in the literature that focuses on prices rather we consider the mark ups of both the refineries and retailers hence we show that we first need to assess whether the refineries mark up responds asymmetrically to the international crude oil prices and subsequently whether the retailers mark up shows an asymmetric behaviour relatively to changes in the refined fuel prices focusing in greece as our case study our findings show that greek fuel retailers do not change their mark up behaviour based on changes of the refined fuel price by contrast the asymmetric behaviour is evident in the refineries mark up relatively to changes in the international crude oil prices which is then passed through to the retailers and consumers finally we provide evidence that weekly and monthly data mask any such asymmetric relationship thus we maintain that unless the appropriate data frequency fuel price transformations and the whole supply chain are considered misleading findings could be revealed

asymmetric and nonlinear pass through of crude oil prices to gasoline and natural gas prices in this article we use the recently developed nonlinear autoregressive distributedlags nardl model to examine the pass through of crude oil prices into gasoline and natural gas prices our approach allowsus to simultaneously test the short and long run nonlinearities through positive and negative partial sum decompositions of the predetermined explanatory variables it also offers the possibility to quantify the respective responses of gasoline and natural gas prices to positive and negative oil price shocks from the asymmetric dynamic multipliers the obtained results indicate that oil prices affect gasoline prices and natural gas prices in an asymmetric and nonlinear manner but the price transmission mechanism is not the same important policy implications can be learned from the empirical findings

rationalizable strategic behavior the notion of equilibrium proposed by nash 19 has come to play a dominant role in economic applications of noncooperative games while analyses of nash equilibria have unquestionably contributed to our understanding of economic behavior it would be unreasonably optimistic to maintain that nash solved the problem of noncooperative strategic choice there is a small literature beginning with ellsberg 6 and a much larger oral tradition which argues that nash behavior is neither a necessary consequence of rationality nor a reasonable empirical proposition in this paper i take the view that although there may be various reasons why an agent might select a nash strategy the notion of an equilibrium has little intrinsic appeal within a strategic context when an agent reaches a decision in ignorance of the strategies adopted by other players rationality consists of making a choice which is justifiable by an internally consistent system of beliefs rather than one which is optimal post hoc this point of view is not original indeed most serious justifications of the nash hypothesis embrace such an approach arguing that agents will expect the game to yield a nash outcome and consequently will choose their equilibrium strategies nevertheless when we think in terms of maximizing utility subject to expectations rather than realizations it becomes clear that the nash hypothesis far from being a consequence of rationality arises from certain restrictions on agents expectations which may or may not be plausible depending upon the game being played we are then quite naturally led to ask are there any restrictions of individuals expectations and hence choices which are required by rationality alone rather than by subjective plausibility this paper is concerned with defining justifying characterizing and refining a criterion for rational strategic choice which i label rationalizability

dhsy revisited the role of asymmetries davidson et al s data set is used to demonstrate the existence of a significant asymmetry in the adjustment of consumption towards equilibrium the granger lee and escribano pfann methods of partitioning the error correction term are compared and it is shown that the latter produces better results in this case it is concluded that adjustment is faster under conditions of recession than it is during boom periods

symmetric or asymmetric price adjustments in the oil market an empirical analysis of the relations between international and domestic prices in the federal republic of germany 1972 89 abstract this paper investigates how german consumer and wholesale prices for gasoline and light heating oil react to changes in the corresponding rotterdam prices monthly data from 1972 to 1989 are employed and the subperiods of the 1970s 1972 to 1979 and 1980s 1980 1989 are distinguished error correction models are estimated to seperate long run equilibrium relations and short run adjustment processes for the 1980s we find rapid symmetric and full adjustment of the german prices to the rotterdam prices whereas during the 1970s we find some asymmetries and at least for gasoline the adjustment processes took considerably more time

investigation of production sales and inventory relationships using multicointegration and non symmetric error correction models the accumulated sum of a stationary series is called integrated if a linear combination of some of the integrated series is stationary it is said to be cointegrated this paper presents empirical results on inventories to consider the possibility of a deeper form of cointegration called multicointegration which is introduced in granger and lee 1989 a vector integrated series is multicointegrated if the accumulated sum of its stationary cointegrated linear combination is again cointegrated with itself inventory which is the accumulated sum of production minus sales is probably cointegrated with production and sales the empirical results generally support the presence of multicointegration of production and sales in many u s industries and industrial aggregates the results also favour the non symmetric error correction model providing evidence that the strength of attraction is different on both sides of the attractor a modified s s rule for inventory control is investigated in the context of a non symmetric error correction model and the results generally do not support the s s rule sufficient evidence is found to conclude that multicointegration is a useful concept in the area of inventory determination

dynamic pricing in the spanish gasoline market a tacit collusion equilibrium abstract during the last twenty years the spanish petrol market has undergone an intensive restructuration process it has changed from being a state owned monopoly to total liberalization and privatization this liberalization process was accompanied by measures that facilitated the creation of a national champion the repsol group which is a huge vertically integrated company with a high market share in all the industry s segments using a dynamic model this paper analyses whether the prices established by companies in the spanish gasoline market after the restructuration process fits with a tacit collusion equilibrium the empirical results show that a strategic behaviour of companies occurs and is compatible with a tacit collusion price strategy so the restructuration process does not seem to have introduced effective competition into the spanish gasoline market

competition regulation and pricing behaviour in the spanish retail gasoline market abstract the restructuring of the spanish oil industry produced a highly concentrated oligopoly in the retail gasoline market in june 1990 the spanish government introduced a system of ceiling price regulation in order to ensure that liberalization was accompanied by adequate consumer protection by 1998 prices were left to the free market this paper examines the pricing behaviour of the retail gasoline market using multivariate error correction models over the period january 1993 abolishment of the state monopoly december 2004 the results suggest that gasoline retail prices respond symmetrically to increases as well as to decreases in the spot price of gasoline both over the period of price regulation january 1993 september 1998 and over the period of free market october 1998 december 2004 however once the ceiling price regulation was abolished cooperation emerged between the government and the major operators repsol ypf and cepsa elf to control the inflation rate this resulted in a slower rate of adjustment of gasoline retail prices when gasoline spot prices went up as compared with the european pattern finally the spanish retail margin was by the end of our timing period of analysis as in the starting years after the abolishment of the state monopoly above the european average this pattern confirms our political economic hypothesis which suggests that the spanish government and the oil companies were working together in reducing the inflation in periods of rising oil and gasoline prices it is also inferred that explaining the pricing pattern in energy markets may require different hypothesis than the classical perspective involving just firms taking advantage of market power

on the misuse of the profits sales ratio to infer monopoly power the common use of the profits sales ratio as a measure of the lerner index of monopoly power is flawed even with the assumption of constant returns because of problems connected with the valuation of capital the size of the error is related to the cost of capital the growth rate of the firm the depreciation method used and most important the shape of the stream of benefits resulting from an investment examples show that the error can be quite large further the error is likely to be systematically related to the variables used in regression studies

rationalizable strategic behavior and the problem of perfection this paper explores the fundamental problem of what can be inferred about the outcome of a noncooperative game from the rationality of the players and from the information they possess the answer is summarized in a solution concept called rationalizability strategy profiles that are rationalizable are not always nash equilibria conversely the information in an extensive form game often allows certain unreasonable nash equilibria to be excluded from the set of rationalizable profiles a stronger form of rationalizability is appropriate if players are known to be not merely rational but also cautious what constitutes rational behavior in a noncooperative strategic situation this paper explores the issue in the context of a wide class of finite noncooperative games in extensive form the traditional answer relies heavily upon the idea of nash equilibrium nash 17 the position developed here however is that as a criterion for judging a profile of strategies to be reasonable choices for players in a game the nash equilibrium property is neither necessary nor sufficient some nash equilibria are intuitively unreasonable and not all reasonable strategy profiles are nash equilibria the fact that a nash equilibrium can be intuitively unattractive is well known the equilibrium may be imperfect introduced into the literature by selten 20 the idea of imperfect equilibria has prompted game theorists to search for a narrower definition of equilibrium while this research some of which will be discussed here has been extremely instructive it remains inconclusive theorists often agree about what should happen in particular games but to capture this intuition in a general solution concept has proved to be very difficult if this paper is successful it should make some progress in that direction the other side of the coin has received less scrutiny can all non nash profiles really be excluded on logical grounds i believe not the standard justifications for considering only nash profiles are circular in nature or make gratuitous assumptions about players decision criteria or beliefs the following discussion of these points is extremely brief due to space constraints more detailed arguments may be found in pearce 18

forecasting the oil gasoline price relationship do asymmetries help abstract according to the rockets and feathers hypothesis rfh the transmission mechanism of positive and negative changes in the price of crude oil to the price of gasoline is asymmetric although there have been many contributions documenting that downstream prices are more reactive to increases than to decreases in upstream prices little is known about the forecasting performance of econometric models incorporating asymmetric price transmission from crude oil to gasoline in this paper we fill this gap by comparing point sign and probability forecasts from a variety of asymmetric ecm a ecm and threshold autoregressive ecm tar ecm specifications against a standard ecm forecasts from a ecm and tar ecm subsume the rfh while the ecm implies symmetric price transmission from crude oil to gasoline we quantify the forecast accuracy gains due to incorporating the rfh in predictive models for the prices of gasoline and diesel we show that as far as point forecasts are involved the rfh does not lead to significant improvements while it can be exploited to produce more accurate sign and probability forecasts finally we highlight that the forecasting performance of the estimated models is time varying

asymmetric price adjustments in us gasoline markets impacts of spatial dependence on the rockets and feathers hypothesis gasoline retail prices show sometimes wild asymmetric fluctuations over time we explore the impact of spatial dependence on gasoline retail price formation by using for the first time an asymmetr

price adjustments by a gasoline retail chain we use daily data to examine price responses in the swedish gasoline market to changes in the rotterdam spot price exchange rates and taxes the distribution of price adjustments by a leading retail chain for the period january 1980 to december 1996 is symmetric with no small adjustments an error correction model shows that in the short run prices gradually move towards the long run equilibrium in response to cost shocks there is some evidence that also in the short run prices are stickier downwards than upwards prices respond more rapidly to exchange rate movements than to the spot market price our analysis emphasizes that to fully understand price adjustments it is necessary to examine data sets where the sample frequency at least matches that of price adjustments

taxation and the asymmetric adjustment of selected retail energy prices in the uk this paper investigates the adjustment of the prices of four key petroleum products in the uk following changes in the price of crude oil we find significant evidence that the pre tax prices of diesel kerosene and gas oil adjust more rapidly in an upward than a downward direction but that the pre tax price of unleaded petrol adjusts symmetrically however these patterns are obscured at the pump once one accounts for fuel duty and value added tax raising the possibility that firms can use the tax system to conceal rent seeking behaviour

strategy complexity and economic rent this paper discusses important friction forces that future theories of strategy must incorporate some of these are technological and environmental but the most important ones it is argued are psychological the view is developed that strategy at its core concerns the development and testing of heuristics for high stake decisions in environments too unstable and complex to be optimized the paper especially highlights the behavioral dimension in the belief that strategies should incorporate both the rational and suboptimal aspects of human behavior the rational approach is in many ways the easier as there may be only one way to be right yet the great variety in which people and companies can err gives strategy its creative and real world challenge the tension between the rational and behavioral components is what the field of strategy should seek to exploit

a note on the benefits of homeownership abstract this brief note adds to recent work that attempts to identify externalities associated with homeownership the results suggest that some of the homeownership effect found by green and white is driven by family characteristics associated with homeownership especially residential stability however as much as homeownership increases residential stability it appears to be correlated with higher school attainment attempts to control for endogeneity cannot eliminate this finding

exploring the life of fuel price responses in retail markets the effect of cross sectional aggregation abstract empirical studies on vertical price transmission in retail fuel markets commonly use average group data of petrol stations in this paper a simulation approach is employed to illustrate that in this case the persistence of price responses tends to be overestimated to explore the real extent of the problem we apply the mean group mg and the mean group with common correlated effects mg cce estimators to individual data from petrol stations when heterogeneity in the pricing dynamics is captured by mg and mg cce estimators persistence of retail price responses becomes considerably lower than the typical ols estimations from average group data would suggest

on the economic determinants of oil production theoretical analysis and empirical evidence for small exporting countries abstract in this paper decisions regarding production in oil exporting countries are studied by means of theoretical analysis and empirical investigation in particular we aim at describing the relationship between oil production levels and changes in the world oil demand and prices intertemporal production decisions by a representative oil producer are modeled by means of a partial equilibrium model in this theoretical model oil producers are subject to exogenous shocks in world oil consumption and prices oil companies can change output levels only by incurring a fixed cost results from the simulation of this model show a strong relationship between oil production and changes in world oil consumption on the contrary the effects of changes in real oil prices on oil production decisions seem to be much lower results from the simulation of the theoretical model are then empirically investigated using time series econometric techniques the empirical evidence supports the hypothesis that oil producing countries are characterized by different responses to changes in world oil demand and in real oil prices for many countries production rapidly adjusts to changes in consumption whereas responses of oil production to innovations in real oil prices are found to be not statistically significant in addition when non linearities in the relationship between world oil demand prices and output levels are allowed for evidence of asymmetric effects of shocks to exogenous variables on output levels is found for some countries

the effects of oil prices on the price indices in taiwan international or domestic oil prices matter abstract this study employs the multivariate threshold model developed by tsay 1998 to examine the effects of international and domestic oil prices on the price indices in taiwan using monthly data from january 1999 to december 2011 the results show that changes in domestic oil prices do not granger cause changes in the price indices when the oil price change exceeds the threshold level however international oil price shocks still affect the wholesale price index through the effects of announcement and expectation therefore controlling domestic oil prices to prevent volatility in the price indices is ineffective if we focus on the period when the left wing party is in power we also find that changes in international oil prices have more critical effects on the price indices than changes in domestic oil prices however the lead lag relationship between changes in domestic oil prices and changes in the price indices vanishes except with respect to the transportation category where the consumer price index is affected by domestic oil prices this result may be due to the government s extensive intervention in setting oil prices

food prices and market structure in sweden this paper examines retail grocery price levels across a large panel of stores in sweden we explain price variation across stores by market structure variables to capture differences in competition intensity and a number of store and region specific factors most of the explained variation in prices can be attributed to store specific factors such as size and chain affiliation overall the relation between market structure variables and food prices is weak and effects are small in percentage terms nevertheless higher local concentration of stores higher regional wholesaler concentration and a lower market share of large stores are all correlated with higher prices

econometric models of asymmetric price transmission abstract in this paper we review the existing empirical literature on price asymmetries in commodities providing a way to classify and compare different studies that are highly heterogeneous in terms of econometric models type of asymmetries and empirical findings relative to the previous literature this paper is novel in several respects first it presents a detailed and updated survey of the existing empirical contributions on price asymmetries in the transmission mechanism linking input prices to output prices second this paper presents an extension of the traditional distinction between long run and short run asymmetries to new categories of asymmetries such as contemporaneous impact distributed lag effect cumulated impact reaction time equilibrium and momentum equilibrium adjustment path regime effect regime equilibrium adjustment path each empirical study is then critically discussed in the light of this new classification of asymmetries third this paper evaluates the relative merits of the most popular econometric models for price asymmetries namely autoregressive distributed lags partial adjustments error correction models regime switching and vector autoregressive models finally we use the meta regression analysis to investigate whether the results of asymmetry tests are not model invariant and find which additional factors systematically influence the rejection of the null hypothesis of symmetric price adjustment the main results of our survey can be summarized as follows i each econometric model is specialized to capture a subset of asymmetries ii each asymmetry is better investigated by a subset of econometric models iii the general significance of the f test for asymmetric price transmission depends mainly on characteristics of the data dynamic specification of the econometric model and market characteristics overall our empirical findings confirm that asymmetry in all its forms is very likely to occur in a wide range of markets and econometric models

new evidence on asymmetric gasoline price responses in a 1997 paper borenstein cameron and gilbert bcg claim that gasoline prices rise quickly following an increase in the price of crude oil but fall slowly following a decrease this note estimates an error correction model with daily spot gasoline and crude oil price data over the period 1985 1998 and finds no evidence of asymmetry in wholesale gasoline prices the sources of the difference in results are twofold first we use the standard engle granger two step estimation procedure whereas bcg used a nonstandard estimation methodology second even using bcg s nonstandard specification the use of daily rather than weekly data yields little evidence of price asymmetry

lags in the response of gasoline prices to changes in crude oil prices the role of short term and long term shocks abstract using weekly data for the period march 1991 to august 2002 we estimate the response of retail gasoline prices to changes in crude oil and spot gasoline prices in the us allowing for a possibility of two types of cost shocks to the gasoline market long term and short term shocks our conclusion is that theoretical models should be developed that allow more than one type of input price changes and the different effect of input price changes on output prices the empirical results support the conjecture of two types of cost shocks as such we find that lags in the response of retail gasoline prices to changes in crude oil prices may be due to the fact that approximately 97 of changes in crude oil prices are viewed as short term by the market participants when two types of shocks are considered there is large difference between the cumulative response function of gasoline prices to long term and short term shocks to crude oil prices as such this paper adds to our understanding of the price stickiness of gasoline prices

the more the merrier the effect of family size and birth order on children s education there is an extensive theoretical literature that postulates a tradeoff between child quantity and quality within a family however there is little causal evidence that speaks to this theory using a rich dataset on the entire population of norway over an extended period of time we examine the effects of family size and birth order on the educational attainment of children while we find a negative correlation between family size and children s education when we include indicators for birth order and or use twin births as an instrument family size effects become negligible in addition birth order has a significant and large negative effect on children s education we also study adult earnings employment and teenage childbearing and find strong evidence for birth order effects with these outcomes particularly among women these findings suggest the need to revisit economic models of fertility and child production focusing not only on differences across families but differences within families as well

the impacts of family size on investment in child quality using multiple births as an exogenous shift in family size i investigate the impact of the number of children on child investment and child well being using data from the 1980 us census five percent public use micro sample 2sls results demonstrate that parents facing a change in family size reallocate resources in a way consistent with becker s quantity quality model a larger family generated by twins in a later birth reduces the likelihood that older children attend private school reduces the mother s labor force participation and increases the likelihood that parents divorce the impact of family size on a measure of child outcome such as grade retention is less clear the results indicate that for both measures of child investment and child well being the 2sls estimates are statistically distinguishable from ols estimates indicating an omitted variables bias in the single equation model

house price growth when children are teenagers a path to higher earnings abstract this paper examines whether rising house prices immediately prior to children entering college have an impact on their earnings as adults higher house prices provide homeowners with additional funding to invest in their children s human capital but also raise housing costs the results show that a 1 percentage point increase in house prices when children are 17 years old results in roughly 0 9 percent higher annual income for the children of homeowners and 1 5 percent lower annual income for the children of renters house price appreciation at age 17 also leads to higher college enrollment rates at age 19 and an increased likelihood of attendance at higher ranked post secondary institutions for children of homeowners as well as lower college enrollment rates for children of renters

asymmetry and uncertainty in capital formation an application to oil investment theories of irreversible investment suggest a negative relation between investment and uncertainty and nonlinear adjustment costs open for asymmetries in the adjustment of fixed capital we propose an econometric modelling approach to estimate and test the key predictions of modern investment theory including asymmetric dynamics and various uncertainty indicators our application on a data set from the oil industry offers empirical support for both asymmetric dynamics and uncertainty in oil and gas investment

reputation and equilibrium selection in games with a patient player a single long run player plays a simultaneous move stage game against a sequence of opponents who play only once but observe all previous play let the stackelberg strategy be the pure strategy to which the long run player would most like to commit himself if there is positive prior probability that the long run player will always play the stackelberg strategy then his payoff in any nash equilibrium exceeds a bound that converges to the stackelberg payoff as his discount factor approaches one when the stage game is not simultaneous move this result must be modified to account for the possibility that distinct strategies of the long run player are observationally equivalent

bidding behaviour in ocs drainage auctions theory and evidence empirical economists frequently criticize game theoretic models of markets on the grounds that they fail to generate empirically testable hypotheses the complaint is that prices and quantities or entry decisions are explained using factors that are not observable to the econometrician such as private valuations and beliefs of agents the corollary to this argument is that the only way to proceed empirically is through experiments however this approach suffers from the problem that the experience of the subjects may be too limited and the compensation too small for them to perform the requisite optimizing calculations the objective of this paper is to discuss the above criticism of gametheoretic models in the context of our work on markets of offshore oil and gas leases in this case study one group of buyers is better informed about the unknown value of the leaae being sold that another group and the two groups can be identified game theoretic models of markets with informational asymmetries generate restrictions on the relative behaviour and performance of the two groups of buyers and some of these restrictions are empirically testable we examine them using bid and profit data more generally the work serves to illustrate a basic point about testing models of

the effect of overcrowded housing on children s performance at school this paper provides estimates of the causal effect of living in an overcrowded home on performance at school in france our identification strategy relies on the fact that the size and housing conditions of families vary with the sex composition of the siblings in particular large families in which the two youngest children are by descending age a boy and a girl tend to live less often in overcrowded housing than the other families french parents seem to be more reluctant about bringing up their children in the same room when they are not of the same sex especially when the youngest one is a girl we build on these results to develop several econometric analyses of the effect of overcrowding on schooling outcomes using variables describing the sex composition of the siblings as instrumental variables these different strategies reveal that the very strong statistical relationship between housing conditions and academic failure is plausibly one of cause and effect children in large families perform much less well than children in small families but our iv estimates suggest that this is mostly due to the fact that they live in more overcrowded homes

industry competition and firm human capital this paper argues that objective and subjective human capital may have substantial impact upon organizational performance in a competitive context objective human capital pertains to such features as education and experience whereas subjective human capital relates to personality characteristics the argument is illustrated by presenting the results of two empirical studies 1 a cross section 1990 1991 analysis of about 50 incumbents in the flemish furniture industry concentrating on the impact of subjective human capital particularly the chief executive officer s ceo s locus of control personality on financial performance and 2 a longitudinal 1970 1992 analysis of a cohort of 100 entrants into the dutch audit industry focusing on the influence of objective human capital particularly education and experience on exit by merger and acquisition m a or diaspora both studies support the claim that objective and subjective human capital matters for example flemish furniture firms headed by a ceo with an internal locus of control trait reach higher levels of financial performance and dutch audit firms with a high proportion of personnel with business experience are more likely to exit the industry over the years as a result of diaspora finally the data of the flemish furniture and dutch audit industries are re analyzed so as to compare the impact of human capital variables on small firm performance in both industries this re analysis reveals that in both industries the impact of human capital variables is more pronounced in large firms compared to small businesses

games economists play a noncooperative view for some thirty years following world war ii most bright young economists did not go into industrial organization it was not hard to see why this was so the quick big payoffs in economics tend to go to theorists and industrial organization was a subject in which theory was not only unsatisfactory but moribund the promise of the chamberlin robinson revolution of the early 1930s had not been fulfilled and while institutional and verbaltheoretic writings on the subject were sometimes illuminating there was no hard analytic theory formalizing the structure conduct performance paradigm oligopoly in particular showed no signs of analytic tractability today the atmosphere is altogether different the profession is full of young theorists whose principal occupation is industrial organization indeed industrial organization has become the hot topic for microtheorists journals meetings and seminars abound in research on oligopoly and judging by the market this is a booming industry of course the principal reason for the change is the rise of game theory and its applications in these areas von neumann and morgenstern s great work was published in 1944 and hailed immediately by theorists von neumann and morgenstern 1944 jacob marschak indeed stated in reviewing it marschak 1946 p 1 15 ten more such books and the progress of economics is assured nevertheless it was not until the last decade that game theory came to the ascendant as the premier fashionable tool of microtheorists that ascendancy appears fairly complete bright young theorists today tend to think of every problem in game theoretic terms including problems that are easier to deal with in other forms every department feels it needs at least one game theorist or at least one theorist who thinks in game theoretic terms oligopoly theory in particular is totally dominated by the game theoretic approach the field appears to be in an exciting stage of ferment to understand why i believe that such excitement is not warranted it is necessary to step back briefly review the history of oligopoly theory before the game theory revolution and consider what it is that one wants theory to deliver

retail price asymmetries in local gasoline markets the experience of the salt lake city retail gasoline market during the 1989 to 1993 period suggests that there was asymmetric adjustment wholesale and retail price data unique to the salt lake market are used to test for the existence of three types of price asymmetry during this period with respect to the magnitude of the pass through of wholesale price changes evidence of price asymmetry during periods of average weekly wholesale price changes is found however during market shocks the evidence points in the direction of retail price symmetry evidence of asymmetry with respect to the timing and pattern of the retail price response is found for periods of both average and market shock changes since gasoline is purchased by the consumer in local markets conclusions reached by studies of market pricing behaviour that rely on national data may not be relevant for local policy decisions this appears to be the case for the salt lake city market

why are prices sticky the dynamics of wholesale gasoline prices the menu cost interpretation of sticky prices implies that the probability of a price change should depend on the past history of prices and fundamentals only through the gap between the current price and the frictionless price we find that this prediction is broadly consistent with the behavior of nine philadelphia gasoline wholesalers nevertheless we reject the menu cost model as a literal description of these firms behavior arguing instead that price stickiness arises from strategic considerations of how customers and competitors will react to price changes

rockets and feathers revisited an international comparison on european gasoline markets this paper re examines the issue of asymmetries in the transmission of shocks to crude oil prices onto the retail price of gasoline relative to the previous literature the distinguishing features of the present paper are i use of updated and comparable data to carry out an international comparison of gasoline markets ii two stage modeling of the transmission of oil price shocks to gasoline prices first refinery stage and second distribution stage in order to assess possible asymmetries at either one or both stages iii use of asymmetric error correction models to distinguish between asymmetries that arise from short run deviations in input prices and from the speed at which the gasoline price reverts to its long run level iv explicit possibly asymmetric role of the exchange rate as crude oil is paid for in dollars whereas gasoline sells for different sums of national currencies v bootstrapping of f tests of asymmetries in order to overcome the lowpower problem of conventional testing procedures in contrast to several previous findings the results generally point to widespread differences in both adjustment speeds and short run responses when input prices rise or fall

modelling general dependence between commodity forward curves abstract this study proposes a novel framework for the joint modelling of commodity forward curves its key contribution is twofold first we introduce a family of dynamic conditional correlation models based on hierarchical archimedean copulae hac dcc which are flexible but parsimonious instruments that capture a wide range of dynamic dependencies second we apply these models in the context of commodity forward curves as part of the framework an extensive value at risk analysis shows that certain hac dcc models consistently outperform other introduced benchmarks in terms of the preciseness of their out of sample distribution forecasts of the returns of various commodity futures portfolios this shows that the proposed modelling framework as one of its possible applications can be a useful and convenient risk management tool

business cycle asymmetry a deeper look this paper distinguishes two types of asymmetry in business cycles deepness and steepness deepness is defined as the characteristic that troughs are further below trend than peaks are above most previous research has focused exclusively on steepness which refers to cycles in which contractions are steeper than expansions a test for deepness is proposed and applied to u s post war quarterly unemployment real gnp and industrial production evidence of deepness is found for unemployment and industrial production while the evidence for real gnp is weaker previous evidence of steepness in unemployment is confirmed

long and short run price asymmetries and hysteresis in the italian gasoline market abstract using monthly data from 1994 to 2013 we study the long run relation of the pre tax retail prices of gasoline with crude price and the nominal exchange rate we find a strongly significant long run relation we then use the nonlinear ardl nardl model to assess the asymmetries on both the short and long run elasticities as well as the presence of hysteresis in the pricing behaviour the estimation results confirm the presence of asymmetry in the long run elasticities with significant differences between the crude price and the exchange rate as well as the presence of hysteresis in the relation between the retail price of gasoline and crude oil price

asymmetric pass through of oil prices to gasoline prices with interval time series modelling abstract modelling and analyzing the pass through of crude oil prices to retail gasoline prices has received an increasing attention in existing literature however most of the ongoing efforts focus on point valued data which may suffer from the informational loss this paper first employs the threshold autoregressive interval valued tari models developed recently by sun et al 2018a to investigate this transmission and proposes a novel consistent interval based test to detect threshold effects and derives its asymptotic properties these interval based tari model and test superior to traditional point based methods can produce more efficient parameter estimation and more powerful inference due to the informational gain of interval data that is interval data simultaneously contain more information e g trend and volatility than point valued data during the same period empirical results suggest that retail gasoline prices are adjusted upwards faster than downwards and this short run asymmetry is statistically significant during the whole sample our findings reveal that both the level and volatility of oil prices have a positive impact on the price of gasoline which contributes to the asymmetries in the transmission of oil price shocks these results are robust before and after financial crisis furthermore it is interesting to find that after financial crisis both the error correction adjustment speeds and the asymmetries decrease

do gasoline prices respond asymmetrically to crude oil price changes the authors test and confirm that retail gasoline prices respond more quickly to increases than to decreases in crude oil prices among the possible sources of this asymmetry are production inventory adjustment lags and market power of some sellers by analyzing price transmission at different points in the distribution chain the authors attempt to shed light on these theories spot prices for generic gasoline show asymmetry in responding to crude oil price changes which may reflect inventory adjustment effects asymmetry also appears in the response of retail prices to wholesale price changes possibly indicating short run market power among retailers