a public firm in a model of spatial duopoly with price discrimination we visit the role of privatization in the location decision of firms in an industry where no firm can produce all varieties demanded we demonstrate that the nash equilibrium locations are socially optimal in the presence of a publicly owned firm notwithstanding the degree of privatization

equilibrium in hotelling s model of spatial competition we study hotelling s two stage model of spatial competition in which two firms first simultaneously choose locations in the unit interval then simultaneously choose prices under hotelling s assumptions uniform distribution of consumers travel cost proportional to distance inelastic demand of one unit by each consumer the price setting subgames possess equilibria in pure strategies for only a limited set of location pairs because of this problem pointed out independently by vickrey 1964 and d aspremont et al 1979 hotelling s claim that there is an equilibrium of the two stage game in which the firms locate close to each other is incorrect a result of dasgupta and maskin 1986 guarantees that each price setting subgame has an equilibrium in mixed strategies we first study these mixed strategy equilibria we are unable to provide a complete characterization of them although we show that for a subset of location pairs all equilibria are of a certain type we reduce the problem of finding an equilibrium of this type to that of solving three or fewer highly nonlinear equations at each of a large number of location pairs we have computed approximate solutions to the system of equations next we use our analytical results and computations to study the equilibrium location choices of the firms there is a unique up to symmetry subgame perfect equilibrium in which the location choices of the firms are pure in it the firms locate 0 27 from the ends of the market at this equilibrium the support of the subgame equilibrium price strategy is the union of two short intervals most of the probability weight is in the upper interval so that this strategy is reminiscent of occasional sales by the firms we also find a subgame perfect equilibrium in which each firm uses a mixed strategy in locations in fact in the class of strategy pairs in which the firms use the same mixed strategy over locations and this strategy is symmetric about 0 5 there is a single equilibrium in this equilibrium most of the probability weight of the common strategy is between 0 2 and 0 4 and between 0 6 and 0 8 there is a wide range of pure nash as opposed to subgame perfect equilibrium location pairs the subgame strategies in which each firm threatens to charge a price of zero in response to a deviation support all but those location pairs in which the firms are very close

market power and firm risk a test of the quiet life hypothesis abstract this paper presents an empirical investigation of john r hicks quiet life hypothesis that firms in monopolistic markets will be more risk averse than firms in competitive markets a sample of 6 500 unit banks is used in a multivariate regression analysis to test the relationship between market concentration and overall risk measured by the coefficient of variation as well as certain financial ratios financial data are for the years 1969 1978 test results are consistent with hicks quiet life hypothesis it is also notable that while most structure performance studies in banking have found a quantitatively small effect of structure on performance these results suggest that the effect may be fairly substantial

addendum to eleftheriou and michelacakis 2016 abstract following the publication of eleftheriou and michelacakis 2016a it was brought to our attention that the problem identified and corrected in eleftheriou and michelacakis 2016a affects more papers than just the beladi et al 2008 two such instances of published papers that we know of are the beladi et al 2010a and beladi et al 2010b the aim of this short addendum is to warn the reader against the validity of the results in these two papers and perhaps others using the same basic duopoly model as in beladi et al 2008 we look into the origins of the fallacy and make an announcement of corrected versions of some of the affected conclusions referring elsewhere for precise details

exchange rate economics 1986 in the past fifteen years key exchange rates have moved in larger and more persistent ways than advocates of flexible rates in the late 1960s would have left anyone free to imagine certainly there was no expectation of constancy for nominal exchange rates but real exchange rate movements of 30 or forty percent were definitely not suggested as a realistic possibility moreover where these large movements did occur they did not obviously appear to be connected with fundamentals and hence seemed difficult to explain in terms of the exchange rate theories at hand the persistence of rate movements was as surprising as the rapid unwinding of apparent misalignments when they did ultimately occur the past fifteen years provide a natural dividing line between the keynesian and monetary approaches of the 1960s and the more recent analysis that takes into account exchange rate expectations and portfolio issues which took off in the early 1970s as well as the brand new approaches that concentrate on partial equilibrium microeconomics to review these ideas the paper starts with a brief look at the u s experience with flexible exchange rates from there it proceeds to the mundell fleming model as a comprehensive framework of analysis the following sections deal with persistent effects of policy disturbances links between exchange rates and prices the political economy of exchange rate movements and the question of policies toward excess capital mobility this abstract was borrowed from another version of this item

the weak form efficiency of the london metal exchange filter techniques are used to test for dependency and weak form efficiency on the london metal exchange they are applied to daily cash and futures prices for copper lead tin and zinc for the period 1972 1982 the results are adjusted for the bias in filter tests caused by the upward trend of prices an exact test statistic is derived doubts are raised however about its reliability the results show strong evidence of inefficiency for copper weaker but positive evidence for lead and zinc and no evidence at all for tin

performance of technical analysis in growth and small cap segments of the us equity market abstract a large universe of technical trading rules applied to a set of technology industry and small cap sector portfolios over the 1995 2010 period yields superior predictability after adjusting for data snooping bias in the first half of the sample period and delivers statistically significant profits for a number of portfolios when the transaction cost is assumed to be of small to moderate size technical analysis is not able to outperform the buy and hold approach for any portfolio in the set in the second half of the sample period the finding that the short term return predictability becomes much weaker in the more recent period suggests that the underlying segments of the equity market have become more efficient over time the fact that mechanical trading strategies have been futile after adjusting for data snooping bias for two samples of portfolios where technical analysis is most anticipated to succeed suggests that it is unlikely to have delivered abnormal returns in any other segment of the domestic equity market in the last decade

on the performance of differently regulated financial institutions some empirical evidence abstract the paper raises two questions about the industrial economics of banking first why are financial market configurations so different across nations we discuss the theoretical arguments by following the sequence regulation structure performance section 2 second do the differences in regulation and structure matter section 3 provides empirical evidence pertaining to that question throughout the paper we refer to two polar cases of financial systems market m and bank b based systems as for banks we distinguish between specialised and universal banks universal banking is a particular institutional representation of b systems a first empirical test relating macroeconomic growth to financial variables suggests that these variables matter we then test with a set of 88 banks the effects of regulatory and structural variables on the level and variability of bank performance we conclude that universal banks achieve a better risk return trade off due to superior monitoring and information collection capacity

the foreign exchange market a random walk with a dragging anchor this paper explores some anomalies in the foreign exchange market it is hard to find evidence of either short term overshooting or of longer term reversion to an equilibrium the forward exchange rate contains virtually no information on future spot rates discussions with practitioners indicate that longer term speculation based on fundamentals is strictly limited and survey data and other evidence suggest that expectations and speculation are based on a variety of models the interplay between speculation based on fundamentals and on a random walk or chartist approach influences the outcome this endorses the prior model of j a frankel and k a froot copyright 1988 by the london school of economics and political science

a note on the weak form efficiency of capital markets the application of simple technical trading rules to uk stock prices 1935 to 1994 abstract brock et al 1992 found technical trading rules to have predictive ability with regards to the dow jones index the current paper considers whether this result can be replicated on uk data the paper also considers whether investors could earn excess returns from technical analysis in a costly trading environment the paper concludes that although the technical trading rules examined do have predictive ability in terms of uk data their use would not allow investors to make excess returns in the presence of costly trading

using survey data to test standard propositions regarding exchange rate expectations survey data provide a measure of exchange rate expectations superior to the forward rate in that no risk premium interferes we estimate extrapolative adaptive and regressive models of expectations static or random walk expectations and bandwagon expectations are rejected current appreciation generates the expectation of future depreciation because variables other than the contemporaneous spot rate receive weight in comparing expectations to the process governing the spot rate we find statistically significant bias no variable is as ubiquitous in international financial theory and yet as elusive empirically as investors expectations regarding exchange rates in the past expectations have been modeled in an ad hoc way often by using the forward exchange rate there is however a serious problem with using the forward discount as the measure of the expected change in the exchange rate in that the two may not be equal the gap that may separate the forward discount and expected depreciation is generally interpreted as a risk premium most of the large empirical literature testing the unbiasedness of the forward exchange rate for example has found it necessary either arbitrarily to assume away the existence of the risk premium if the aim

performance of moving average trading strategies over varying stock market conditions the finnish evidence this article examines the profitability of dual moving average crossover dmac trading strategies in the finnish stock market over the period 1996 to 2012 it contributes to the existing technical analysis literature by comparing for the first time the performance of dmac trading portfolios of individual stocks to the performance of index trading strategies based on trading on an index that consists of the same stocks the results show that their relative performance varies over time whereas previous studies have documented outperformance of index trading strategies over trading strategies of stock portfolios moreover the great majority of 3020 dmac strategies examined in this article outperform the corresponding buy and hold b and h strategy for both trading targets i e omx helsinki 25 index and individual stocks included in the index in out of sample tests in addition the decomposition of the full sample period performance into separate bull and bear period performance shows clearly that th

on the efficiency of the european carbon market new evidence from phase ii i examine in the period 2008 2011 the efficiency of four carbon dioxide co2 emission allowance futures traded in the intercontinental exchange ice to this end i assess the profitability of trading strategies based on simple technical analysis rules and naive forecasts the results from 2010 onwards are consistent with weak market efficiency in turn this finding suggests that the european carbon market is gradually attaining a state of maturity

the existence of equilibrium in discontinuous economic games ii applications in part i of this study we established two existence theorems for mixed strategy equilibrium in games with discontinuous payoff functions see theorems 4 4 and 5 5 in dasgupta and maskin 1986 hereafter d m 1986 in this second part we use the second of these two theorems to prove the existence of mixed strategy equilibrium in some wellknown discontinuous economic games that fail to have pure strategy equilibria the models we analyse are the bertrand edgeworth example of price setting duopolists with capacity constraints see section 2 2 price competition among firms producing differentiated products hotelling 1929 and d aspremont gabszewicz and thisse 1979 see section 2 3 spatial competition eaton and lipsey 1975 and shaked 1975 see section 3 and models of market dependent information rothschild and stiglitz 1976 and wilson 1977 section 4 the paper concludes section 5 with a classification of these models

asymmetric information and the structure of the banking industry abstract we analyze the effects of informational asymmetries on the market structure of the banking industry in a multi period model of spatial competition in the process of lending incumbent banks gather proprietary information about their clients acquiring an advantage over potential entrants we show that these informational asymmetries are important determinants of the industry structure and of banks strategic behavior contrary to traditional models of horizontal differentiation the steady state equilibrium is characterized by a finite number of banks even in the absence of exogenous fixed costs in addition less concentrated industry structures may be associated with higher interest rates

intertemporal profitability and the stability of technical analysis evidences from the hong kong stock exchange this study investigates the impact of market integration on the profitability of two simple and popular technical trading rules the simple moving average sma and the trading range break trb in hong kong using data from 1972 to 2006 we find that the sma 1 50 consistently outperforms the market before the integration of stock exchanges in 1986 under the 1 50 rule a variable length moving average performs better than the fixed length moving average rule by 2 5 to 5 annual before transaction costs because it includes the information of the first 9 days into investors decision the results are robust to the out of sample tests for the validity of the profitability of the trading rules the returns of the trading range break rules are insignificant over the 35 year span our results support the conjecture that stock market integration may lead to better information efficiency the findings of significant pre 1986 profits and insignificant post 1986 profits contradict previous findings that r

professionally managed publicly traded commodity funds investment in professionally managed publicly traded commodity funds has grown rapidly in recent years this is the first comprehensive study of the performance of these funds it is found that randomly selected funds offer neither an attractive alternative to bonds nor a profitable addition to a portfolio of stocks and bonds furthermore past performance of these funds offers very little information about future performance the findings may be explained by the large transactions costs incurred by these funds and their primary reliance on technical analysis copyright 1987 by the university of chicago

asymmetric return dynamics and technical trading strategies abstract we investigate the profitability of technical trading strategies based on an asymmetric reverting property of stock returns we identify an asymmetry in return dynamics for daily returns on the s p 500 index return dynamics evolve along a positive negative unconditional mean after a prior positive negative return the trading strategies based on this asymmetry generate a positive return for buy signals a negative return for sell signals and a positive return for the spread between buy and sell signals our results imply that the observed asymmetry in return dynamics is the main source of profitability for the implied strategies thereby corroborating arguments for the usefulness of technical trading strategies

marketmaker behavior in an auction market an analysis of scalpers in futures markets this paper focuses on the role of scalpers as marketmakers in the competitive auction of futures exchanges we use transactions data of a representative scalper to identify the source of scalper earnings we find that scalpers provide liquidity services to incoming market orders thereby facilitating commercial hedging scalper earnings are positively related to the bid asked spread and negatively related to the length of time a position is held futures trading is organized as an auction market with buyers and sellers confronting each other directly in a trading pit or ring on an exchange floor bids and offers are represented in the pit by open outcry trades are consummated throughout a trading session which usually last 4 to 6 hours whenever a bid is hit or an offer lifted by some other agent on the floor participants in futures markets include hedgers and speculators whose orders are called in and are represented by floor brokers in the pit in addition floor traders participate by bidding and offering for their own account some floor traders fall into the category of short term speculators day traders who prefer to trade for themselves rather than execute orders through a floor broker a somewhat more specialized group of floor traders are known as scalpers they are essentially marketmakers who quote bids and offers against which market orders can be executed they do not have an affirmative obligation to provide liquidity by quoting bids and offers but do so in the expectation of earning a return this paper examines the activities of scalpers on futures exchanges in order to identify the role of marketmakers in a freely competitive auction we focus on the nature of scalper decision making as well as on the contribution of scalpers to economic welfare one of our main concerns is with the source of a scalper s

financial regulation and financial system architecture in central europe abstract at the beginning of the transition advice to central european countries with respect to how to set up their financial systems was based on models used in western economies this paper analyzes the experiences to set up a financial system in central europe the experience in the first transition years 1990 1996 with financial system architecture shows that changes are slow but that the central european countries tend to catch up more quickly with the western ones in the case of their banking systems than with respect to their stock markets

financial returns and efficiency as seen by an artificial technical analyst abstract we introduce trading rules which are selected by an artificially intelligent agent who learns from experience an artificial technical analyst these rules restrict the data mining concerns associated with the use of simple technical trading rules as model evaluation devices and are good at recognising subtle regularities in return processes the relationship between the efficiency of financial markets and the efficacy of technical analysis is investigated and it is shown that the artificial technical analyst can be used to provide a quantitative measure of market efficiency we estimate this measure on the djia daily index from 1962 to 1986 and draw implications for the optimal behaviour of certain classes of investors it is also shown that the structure of technical trading rules commonly used is consistent with utility maximisation for risk neutral agents and in a myopic sense even for risk averse agents

asymmetric effect of basis on dynamic futures hedging empirical evidence from commodity markets abstract the dynamic minimum variance hedge ratios mvhrs have been commonly estimated using the bivariate garch model that overlooks the basis effect on the time varying variance covariance of spot and futures returns this paper proposes an alternative specification of the bgarch model in which the effect is incorporated for estimating mvhrs empirical investigation in commodity markets suggests that the basis effect is asymmetric i e the positive basis has greater impact than the negative basis on the variance and covariance structure both in sample and out of sample comparisons of the mvhr performance reveal that the model with the asymmetric effect provides greater risk reduction than the conventional models illustrating importance of the asymmetric effect when modeling the joint dynamics of spot and futures returns and hence estimating hedging strategies

beating the foreign exchange market filter rule profits found in foreign exchange markets in the early days of the current managed float persist in later periods as shown by statistical tests developed and implemented here the test is consistent with but independent of a wide variety of asset pricing models the profits found cannot be explained by risk if risk premia are constant over time inclusion of the home foreign interest rate differential in computing profits has little effect on the comparison of filter returns to those of buy and hold in the early years of the generalized managed floating that began in march 1973 filter rule profits in excess of buy and hold were found for many countries logue sweeney and willett 18 dooley and shafer 6 cornell and dietrich 5 it was unclear however whether such profits indicated inefficiencies first it was not clear that risk was adequately handled in such tests and often risk was ignored second there was no evidence such profits would be available postsample and third there was no statistical test of the significance of these profits this paper uses the logic of risk return tradeoffs to analyze the role of risk in such tests and illustrates the logic in a discussion using the sharpe lintner capital asset pricing model capm although a breeden consumption based capm a merton intertemporal capm or an arbitrage pricing model apm could easily be used the paper develops a test of statistical significance appropriate to foreign exchange markets section i analyzing the rate of return on foreign exchange speculation less the foreign domestic interest rate differential the test explicitly assumes that risk premia are constant over the sample the excess rates of return observable in using filters in going from a risk free dollar asset to a risk free deutsche mark dm asset persist into the 1980 s section ii and this is true even when taking account of transactions costs it turns out that these results for the dm case do not depend very much on the interestrate differential but primarily on exchange rate behavior this is useful to know because it is often quite difficult to find matching interest rate data of high quality for a sample of nine other currencies using only exchange rates section iii shows that the excess returns made in the first 610 days of the float persist in the next 1 220 days into the 1980 s dooley and shafer 7 find similar persistence in experiments that do not use buy and hold and have no significance tests when filter rule profits have been found in spot exchange markets it has often been argued that the profits are due to risk this paper uses the capm to analyze rates of return both to buy and hold and to filter strategies it turns out that the claremont mckenna college and claremont graduate school arthur d warga douglas joines and thomas d willett offered helpful comments and ning ning koo provided research assistance

capital market information and industrial performance the role of west german banks in orthodox theory external capital markets play a dual role supplying various forms of investment finance and disciplining firms which are inefficient or fail to pursue profit goals an extensive literature speaks of the efficiency of external capital markets meaning that firms can make production investment decisions and investors can choose among the securities that represent ownership of firms activities under the assumption that security prices at any time fully reflect all available information fama i970 1 however this concept of efficiency is purely technical it depends critically on what information is available and we know there are problems of appropriability and failure in information markets deriving ultimately from certain peculiarities of information as a commodity arrow i962 thus another growing literature focusses on problems of achieving equilibrium in markets where agents are imperfectly or asymmetrically informed amongst other things this literature shows that informational failures of the kind in question can lead to capital rationing in loan and credit markets and the use of strict collateral requirements as screening devices jaffee and russell i976 stiglitz and weiss i98i cable and turner i983 these may then be expected to affect the efficiency of individual firms and the system as a whole capital shortage implies that some profitable investment opportunities are foregone and production choices may also be distorted by the need to satisfy additional financial constraints contrived to elicit signals of creditworthiness of the firms undertaking them similarly the disciplining role of external capital markets can be impaired by information impactedness williamson i975 and the costs of mobilising and giving effect to shareholders preferences thus in the principal agent framework developed by jensen and meckling i976 and fama i980 the degree of constraint on managerial pursuit of non profit goals as posited by managerial theorists depends on the transactions costs of stock owner intervention the result is an optimal degree of departure from cost minimising profit maximising behaviour determined by the level of transactions costs institutional factors which affect the way information is distributed amongst agents can therefore have an important bearing on allocative and technical efficiency and the west german system of industrial finance provides an in

efficient asset portfolios and the theory of normal backwardation a comment in a recent paper carter rausser and schmitz 1983 hereafter crs argue that previous studies of the risk premium on agricultural commodity futures contracts used incorrect proxies for the market index and consequently mismeasured the equilibrium risk premium on those contracts crs show that when an alternative market index is used to measure systematic risk the required risk premium is positive and of economically significant magnitude this result contradicts that of dusak 1973 and supports the notion of a generalized keynesian theory of normal backwardation the purpose of this comment is to argue that the market index constructed by crs is inappropriate and that their empirical results stem directly from the use of this index

financial intermediation and delegated monitoring this paper develops a theory of financial intermediation based on minimizing the cost of monitoring information which is useful for resolving incentive problems between borrowers and lenders it presents a characterization of the costs of providing incentives for delegated monitoring by a financial intermediary diversification within an intermediary serves to reduce these costs even in a risk neutral economy the paper presents some more general analysis of the effect of diversification on resolving incentive problems in the environment assumed in the model debt contracts with costly bankruptcy are shown to be optimal the analysis has implications for the portfolio structure and capital structure of intermediaries

sequential entry and deterrence with competitive spatial price discrimination abstract this paper analyzes sequential entry with perfect foresight in a competitive spatial price discrimination model with both an exogenous and an endogenous number of firms the spne locations do not coincide with the social cost minimizing locations

expectations driven distortions in the foreign exchange market this paper explores the phenomenon of lasting deviations of the exchange rate from its fundamental value in the foreign exchange market motivated by empirical observations a chartists fundamentalists model is developed in which boundedly rational agents repeatedly choose between technical and fundamental trading rules to determine their speculative investment positions crucial for the dynamics is how the traders perceive the fundamental exchange rate this perception process is based on psychological evidence simulations give rise to bubbles but simultaneously display quite realistic exchange rate dynamics unit roots in the exchange rates fat tails for returns and volatility clustering

dominant institutional owners and firm value abstract this research analyzes the impact of control by dominant institutional owners banking institutions and investment funds on firm value the analysis considers the level of voting rights in the hands of the dominant institutional owner and other large shareholders the results reveal a different effect on value depending on whether the dominant institutional investor is a banking institution or an investment fund moreover the results show that the presence of other large shareholders affects firm value when a dominant institutional owner controls the firm

the behaviour of futures prices over time 1985 the behaviour of futures prices over time applied economics vol 17 no 4 pp 713 734

capital markets and corporate control a study of france germany and the uk this paper examines the relation between capital markets and corporate control in france germany and the uk it compares levels of takeover activity in the three countries and describes the degree to which takeovers are associated with changes in corporate control the paper examines the influence of regulation on forms of corporate ownership and control it compares regulation pertaining to the rights of employees managers and shareholders in the three countries and finds that regulatory rules are related to patterns of ownership and control changes the paper suggests that a fundamental objective of control changes is to correct managerial failure and that takeovers are suited to the correction of particular classes of managerial failure that cannot be readily rectified by contracts thus markets with low levels of takeovers may suffer from a low level of correction of managerial failure however by changing ownership takeovers may give rise to an inability of owners to commit themselves to the long term interests of managers and employees as a consequence financial systems with active takeover markets may be associated with inadequate investment in firm specific assets and an unduly short term investment horizon there is therefore a tradeoff between alternative methods of correcting managerial failure this is particularly important for european countries facing an extension of uk takeover activity to the continent the process is being encouraged by the european commission which aims to harmonize regulation on a uk style takeover code harmonization of regulation may have far reaching consequences for the structure of different countries capital markets and in view of the tradeoff is of uncertain merit

the use of technical analysis in the foreign exchange market abstract technica or chartist analysis of financial markets involves providing forecasts or trading advice on the basis of largely visual inspection of past prices without regard to any underlying economic or fundamental analysis this paper reports the results of a questionnaire survey conducted on behalf of the bank of england among chief foreign exchange dealers based in london in november 1988 amongst other findings it is revealed that at least 90 per cent of respondents place some weight on this form of non fundamental analysis when forming views at one or more time horizons there is also a skew towards reliance on technical as opposed to fundamentalist analysis at shorter horizons which becomes steadily reversed as the length of horizon considered is increased a very high proportion of chief dealers view technical and fundamental analysis as complementary forms of analysis and a substantial proportion suggest that technical advice may be self fulfilling jel f31

spatial price discrimination and the locations of firms with different product selections or product varieties abstract the equilibrium locations of two firms are partially centralized to the socially optimal extent if there is spatial price discrimination and if each firm has two out of three products or else one variety of a differentiated product with some consumers indifferent between varieties

a test of futures market disequilibrium using twelve different technical trading systems trading of twelve technical system is simulated for a portfolio of twelve commodities from 1978 to 1984 in order to test for market disequilibrium results differ substantially by trading system seven systems produced significant gross returns four of the twelve trading sytems produced significant net returns and significant risk adjusted returns these results show that disequilibrium models are a better description of short run futures price movements than the random walk model they also suggest that there may be additional causes of disequilibrium beyond transaction costs and risk aversion

are seasonal anomalies real a ninety year perspective in recent years there has been a proliferation of empirical studies documenting unexpected or anomalous regularities in security rates of return in addition to the widely studied relation between firm size and rate of return 1 these include seasonal regularities related to the time of the day harris 1986 the day of the week see ball and bowers 1986 cross 1973 french 1980 gibbons and hess 1981 jaffe and westerfield 1985 keim and stambaugh 1984 and lakonishok and levi 1982 the time of the month ariel 1987 and the turn of the year see haugen and lakonishok 1988 jones pearce and wilson 1987 lakonishok

growth distribution and politics we start by arguing that to understand growth differences across countries and time one needs to understand differences in public policies that affect the incentives for productive accumulation of capital human capital or technically useful knowledge and to understand policy differences one needs to understand how political institutions aggregate conflicting interests into public policies we then survey some recent work along these lines which argues that more inequality leads to slower growth next we illustrate some of the basic ideas of this work by help of a simple model of taxation we also present some econometric cross country evidence which is largely supportive of the basic ideas we end by suggestions for further work this abstract was borrowed from another version of this item

a comment on vertical mergers and downstream spatial competition with different product varieties abstract the aim of this paper is to revise and correct the results obtained in beladi et al 2008 specifically we prove that in the pre merger case nash equilibrium locations are socially optimal whereas a vertical merger will relocate downstream firms by making them move to the right of their old socially optimal positions while keeping their in between distance intact

an institutional approach to cross national distance cross national distance is a key concept in the field of management previous research has conceptualized and measured cross national differences mostly in terms of dyadic cultural distance and has used the euclidean approach to measuring it in contrast our goal is to disaggregate the construct of distance by proposing a set of multidimensional measures including economic financial political administrative cultural demographic knowledge and global connectedness as well as geographic distance we ground our analysis and choice of empirical dimensions on institutional theories of national business governance and innovation systems in order to overcome the methodological limitations of the euclidean approach we calculate dyadic distances using the mahalanobis method which is scale invariant and takes into consideration the variance covariance matrix we empirically analyze four different foreign expansion choices of us companies to illustrate the importance of disaggregating the distance construct and the usefulness of our distance calculations which we make freely available to managers and scholars

supply response of thailand s rice to the price of biofuel crops 3 4 abstract the increasing cost of rice production and the increasing price of energy crops in thailand both abetted by the energy crisis in the last 4 years made the rice farmers decide to switch to energy crops in the long term this could reduce thai rice production this paper mainly examines the supply of rice production in response to the changes in biofuel crops price and other related factors the study forecasts a negative response in rice supply to the change in biofuel crops price as well as in the cost of chemical fertilizers in contrast the price of rice irrigated area public rice research budget and mechanization are positive significant factors affecting rice supply the price policy would distort the market mechanism which would reduce the competitiveness of thai rice in the world market the findings suggest that the government should apply non price policies in order to increase rice supply and reduce its cost of production further development of the irrigation system and increasing support to research and development on rice genetic improvement are recommended keywords supply response rice production biofuel crops

price discrimination and equilibrium in monopolistic competition modern theories of monopolistic competition have borrowed extensively from techniques developed in location theory and the theory of spatial pricing the monopolistically competitive firm is assumed to choose a location and price for its product a subject that has been of increasing concern in this corpus of theory is that there exists no free entry price location equilibrium in this paper we demonstrate that free entry price location equilibrium exists provided only that producers are allowed to price discriminate among customers in a reasonable manner equilibrium is modelled as a two stage game using the selten concept of subgame perfect nash equilibrium it is shown that the equilibrium discriminatory price system is one initially identified by hoover in addition we show that equilibrium is not unique the precise nature of equilibrium in a particular market will be dependent upon the history of that market

are moving average trading rules profitable evidence from the european stock markets this article examines the profitability of several simple technical trading rules for 16 european stock markets over the 1990 to 2006 period our results indicate that increasing moving average rules indeed have predictive power being able to discern recurring price patterns for profitable trading even after accounting for the effects of data snooping bias to assess the profitability of different technical trading rules and strategies we adopt the white s 2000 reality check rc test that quantifies the data snooping bias and adjusts for its effects our empirical results also support the hypothesis that technical trading rules can outperform the buy and hold strategy after accounting for transaction costs

an innovatory package for financial sector reforms in eastern european countries abstract this essay sees reform of the financial sector as the key to successful transition to a market economy the analysis generates the following practical proposals first the central bank should be endowed with strong independence accumulating the deposit insurance supervisory and lender of last resort functions second the central bank should host the payments system and impose gross settlement without credit lines in excess of required reserve balances it should also impose suitable capital requirements for credit exposure third universal banking should be accepted to improve corporate governance and to make a well functioning capital market less necessary fourth to reduce moral hazard and provide maximum flexibility an innovatory multi tier bank licensing is proposed fifth when government cannot borrow from the central bank borrowing will contribute to the development of securities markets whose other two pillars are privatisation and mortgage financing to alleviate the burden on public finance and maximise liquidity perpetuals assorted with suitable calls and puts are proposed

technical analysis and the spanish stock exchange testing the rsi macd momentum and stochastic rules using spanish market companies the aim of this research is to examine the result of the application of the indicators relative strength index rsi moving average convergence divergence macd momentum and stochastic in different companies of the spanish continuous market by using these indicators it is intended to give purchase and sale recommendations to small investors the generation of great capital gains depends on the type of the stock exchange company and the indicator which is being used in addition this research solves the problems in case of ambiguity in the indicators for the traders

concentration and other determinants of bank profitability in europe north america and australia abstract this study reviews the performance of banks in twelve countries or territories in europe north america and australia and examines the internal and external determination of profitability to circumvent some of the difficulties in making comparisons between banks in different countries the concept of value added is introduced results parallel those in domestic u s studies and provide some support for the edwards heggestad mingo hypothesis of risk avoidance by banks with a high degree of market power

competition of firms discriminatory pricing and location1 two costlessly mobile firms are to be located in a market region a subset of the plane the firms compete by setting locations and delivered price schedules to study this competitive stiuation an appropriate extensive form game is defined along with an appropri ate noncooperative solution concept existence and general properties of the equilibrium are demonstrated among the results are each firm increases its profit by locating so as to decrease total cost to both firms of serving the market firms will never locate coinciden tally if they have identical production costs and transport cost rates or if these are different and the firms are located in a circular market region having a uniform demand distribution this paper studies competition between two profit maximizing firms in space who are costlessly mobile and may discriminate in price we will allow the firms to set locations and delivered price schedules and we will be concerned with the existence and properties of equilibria in location and price starting with hotelling 9 the spatial competition literature has focused on location on bounded linear markets by two or more firms hotelling assumed identical firms that produced a single good with constant cost of production and considered consumers to be uniformly distributed and to have inelastic demand he also assumed that the consumers pay transport cost and purchase the good from the cheapest source hotelling claimed that a nash equilibrium in locations for the two firm market existed and yielded back to back locations at the center of the market many authors most recently d aspremont gabszewicz and thisse 2 have noted that an equilbrium in prices and location does not exist for hotelling s model however if the firms employ identical exogeneously specified prices hotelling s conclusions hold subsequent work by smithies 14 hartwick and hartwick 7 and eaton 3 claimed to show that a nash equi librium in f o b prices and locations can exist in markets with a uniform distribu tion of consumers each of whom have identical elastic demand functions for the two and three firm problems the work of d aspremont et al casts doubt on these conclusions without the adoption of restrictive conditions our work contrasts with these works and related research which has dealt with linear markets with uniform distributions of customers and with identical firms our work will involve markets that are subsets of the plane having nonuniform distributions of customers our firms will be allowed to be different that is have differences in production and transport costs however the fundamental difference in our approach is that our firms will set discriminatory prices and not price f o b in many ways our work will represent the discriminatory pricing

what do investment managers know an empirical analysis of practitioners predictions the rationality of investment managers expectations is tested using quantified survey data the variables examined include expectations of the annual percentage chan ge in the u k fta all share and u s standard and poor s composite s tock market indices and the expected rates of u k price and wage in flation tests for the orthogonality of forecast errors to both small and large information sets known at the time of the forecast are car ried out both with and without allowance for measurement errors in t he expectations series the results decisively reject the rational ex pectations hypothesis as applied to investment managers expectations copyright 1988 by the london school of economics and political science