demand for money in open economies abstract the demand for real cash balances deduced from an underlying portfolio model of the financial market is shown to depend upon domestic variables and foreign monetary developments the model is estimated using quarterly postwar data for canada germany uk and us there is clear evidence that demand for money is affected not only by changes in domestic variables such as permanent income domestic interest rate and price expectations but also by fluctuations in exchange rate expectations and foreign interest rates the conclusion that domestic monetary policy is fairly ineffective and domestic financial markets are highly vulnerable to changes in foreign financial and monetary developments need to be modified in light of the results presented in this paper

a money demand equation for brazil abstract the estimates for the money demand equation reported below are based on quarterly time series for brazil for the 1966 i 1979 iv period they show that the long run income elasticity of the demand for money is roughly unitary and the rate of interest does affect the demand for money exclusion of the latter variable therefore leads to biased estimates of the coefficients of the money demand equation the empirical evidence also points out that the rate of inflation affects the demand for money only to the extent that it is necessary to change nominal cash balances to adjust cash holdings to their desired level either nominal interest rates capture the expected inflation rates or goods inventories are not an important alternative to holding money in brazil

labor costs and manufactured exports in developing countries an econometric analysis abstract policies addressing the effects of labor market distortions on exports have not relied upon empirical evidence on the impact of labor costs using an econometric model this paper analyses the effect of labor costs on manufactured exports in 20 less developed countries concluding that labor costs significantly affect manufactured exports the explanatory power of manufacturing capacity is significant in all the countries and in the majority of them export elasticities with respect to export prices and to the price of imported intermediates are also significant pooling cross section and time series data the effect of labor market distortions on manufactured exports is analyzed the conclusion is that the effect of labor market distortions is significant and negative supporting the idea that deregulating the labor market is essential to promote exports

interpreting an error correction model partial adjustment forward looking behaviour and dynamic international money demand an error correction model is derived from a stochastic dynamic programming problem incorporating rational expectations a parametric restriction is derived that allows a test for the theoretical proposition that the optimal strategy behind the error correction from entails the failure to asymptotically close the gap between the choice variable and the growing target this is accomplished by nesting a partial adjustment model with forward looking expectations within the error correction paradigm the counterintuitive behaviour embodied in the error correction model is not supported by the data in the context of a cross country comparison of cash balances relationships

the persistence of inferior cultural institutional conventions economic institutions and cultures including social norms are often dynamically complementary meaning that the persistence of each is facilitated by the presence of the other the term feudal society for example refers jointly to the economic relationship of lord and serf and to the norms of subordination and reciprocity that both contributed to the smooth functioning of the system and that were its cultural expression this complementarity provides one mechanism for the long term persistence of particular configurations of cultures and institutions given the institutional relationship of serf to lord to continue the example adopting the culturally prescribed norms of subordination and reciprocity was a best response for individuals in the two classes respectively and given this culture of subordination and reciprocity conforming to the institutional arrangements defining serf and lord was also a best response we refer to this pair of mutual best responses as a cultural institutional convention otherwise similar populations with differing recent histories may exhibit differing conventions free cities coexisting with feudal manors in germany and elsewhere during the thirteenth to fifteenth centuries for example historians and social scientists have long asked why some cultural institutional conventions appear independently multiple times in human history and persist over long periods monogamy markets and primogeniture for example while others rarely emerge and when they do tend to be short

money demand in open economies a currency substitution model for venezuela abstract this paper investigates the extent to which domestic money balances in venezuela are influenced by foreign exchange considerations to this end individuals are assumed to choose the levels of foreign and domestic money that minimize the borrowing costs associated with a given level of monetary services the solution to this optimization problem yields a closed form demand function for domestic money that allows for foreign exchange considerations this specification is estimated and the results point to an elasticity of currency substitution in excess of one conditioned on these estimates the paper estimates the risk premium for the period 1981 82 prior to the collapse of the exchange rate system in 1983

the sudan demand for international reserve a case of a labour exporting country an empirical analysis of the demand for international reserves in the sudan is presented based on the error correction model this model is parametrically rich enough to allow the division of the effects into long run influences short term adjustments and proportional equilibrium impacts beside addressing conventional issues in reserve demand literature the model explicitly incorporates the impact on reserve demand of remittances transferred by sudanese nationals working abroad and the impact due to money market disequilibrium the demand function is found to be stable and characterized by constant returns to scale copyright 1990 by the london school of economics and political science

the black market exchange rate vs the official rate in testing ppp which rate fosters the adjustment process abstract in testing the purchasing power parity theory ppp researchers hardly pay attention to the speed with which the exchange rate adjusts to a change in relative prices in this paper we show that the speed of adjustment is faster when the black market exchange rate is used in testing the ppp as compared to the official exchange rate this could be another reason as to why central banks should unify the two rates

managing channel profits a channel of distribution consists of different channel members each having his own decision variables however each channel member s decisions do affect the other channel members profits and as a consequence actions a lack of coordination of these decisions can lead to undesirable consequences for example in the simple manufacturer retailer consumer channel uncoordinated and independent channel members decisions over margins result in a higher price paid by the consumer than if those decisions were coordinated in addition the ensuing suboptimal volume leads to lower profits for both the manufacturer and the retailer this paper explores the problems inherent in channel coordination we address the following questions what is the effect of channel coordination what causes a lack of coordination in the channel how difficult is it to achieve channel coordination what mechanisms exist which can achieve channel coordination what are the strengths and weaknesses of these mechanism what is the role of nonprice variables e g manufacturer advertising retailer shelf space in coordination does the lack of coordination affect normative implications from in store experimentation can quantity discounts be a coordination mechanism are some marketing practices actually disguised quantity discounts we review the literature and present a simple formulation illustrating the roots of the coordination problem we then derive the form of the quantity discount schedule that results in optimum channel profits this article was originally published in marketing science volume 2 issue 3 pages 239 272 in 1983

evolutionary bargaining with intentional idiosyncratic play abstract we study equilibrium selection in stochastic evolutionary bargaining games in which idiosyncratic play is intentional instead of random in contract games the stochastically stable state selected by intentional idiosyncratic play is the nash bargain rather than the usual kalai smorodinsky solution

vertical cooperative advertising and pricing decisions in a manufacturer retailer supply chain a game theoretic approach abstract manufacturers can increase the advertising expenditures of their retailers by bearing a fraction of the occurring costs within the framework of a vertical cooperative advertising program we expand the existing research which deals with advertising and pricing decisions in a manufacturer retailer supply chain contemporaneously by means of game theory four different relationships between the channel members are considered firstly three non cooperative games with either symmetrical distribution of power or asymmetrical distribution with one player being the leader in each case and one cooperative game where both players tend to maximize the total profit the latter is complemented by a bargaining model which proposes a fair split of profit on the basis of the players risk attitude and bargaining power our main findings are as follows a in contrast to previous analyses we do not limit the ratio between manufacturer s and retailer s margin which provides more general insights into the effects of the underlying distribution of power within the channel b the highest total profit is gained when both players cooperate this behavior puts also the customers in a better position as it produces the lowest retail price as well as the highest advertising expenditures compared to the other configurations

coalitions tipping points and the speed of evolution this study considers pure coordination games on networks and the waiting time for an adaptive process of strategic change to achieve ecient coordination although it is in the interest of every player to coordinate on a single globally ecient norm coalitional behavior at a local level can greatly slow as well as hasten convergence to eciency

the search for a stable money demand function a survey of the post 1973 literature phe question of whether the demnand function for money is stable is one of the most important recurring issues in the theory and application of macroeconomic policy what is being sought in a stable demand function is a set of necessary conditions for money to exert a predictable influence on the economy so that the central bank s control of the money supply can be a useful instrument of economic policy as such the notion of a stable demand function appears to involve three key elements e g john t boorman 1976 p 317 and david e w laidler 1977 pp 34 35 first the demand for money relation should be highly predictable in a statistical sense as measured by the usual goodness of fit statistics precision of estimated coefficients and presumably its ability to forecast accurately out of sample second a stable demand function for money has relatively few arguments a relationship that requires knowledge about a large number of variables in order to pin it down is in effect not predictable finally the variables that appear as arguments in the function should represent significant links to spending and economic activity in the real sector in sum a stable demand function for money means that the quantity of money is predictably related to a small set of key variables linking money to the real sector of the economy the importance of a stable money demand function for monetary policy can be illustrated with the standard is lm model in which interest rates and gnp are the endogenous variables in this context a stable demand function for money translates into a well defined relationship between money interest rates and gnp

a cooperative incentive equilibrium for a resource management problem abstract a two country dynamic game model of whaling is considered it is assumed that the countries have exact information possibly with some time delay about each other s whaling efforts measured by the number of vessels involved in whaling it is shown how to construct equilibrium strategies which are affine in the available information and which when jointly carried out realize a given pareto optimal decision numerical results suggest that some of these strategies are credible i e the countries do believe that the announced strategies will be followed

channel coordination over time incentive equilibria and credibility abstract the paper studies a channel of distribution consisting of a manufacturer and a retailer in a dynamic game of pricing and advertising the carry over effects of channel member s advertising efforts are summarized in a stock of advertising goodwill each channel member has perfect information about the other channel member s price and advertising effort if each firm employs marketing strategies that are linear functions of the other member s actions and these strategies are jointly carried out a pareto optimal joint profit maximization outcome can be realized the paper also addresses the question of credibility of the incentive strategies

do exchange rate changes have symmetric or asymmetric effects on the demand for money in turkey as a result of the research conducted by nobel laureate robert mundell 1963 most studies estimating the demand for money today do include the exchange rate in their specification to account for currency substitution previous studies that did this for the turkish demand for money assumed that exchange rate changes do have symmetric effects on the demand for money in turkey in this article we question this assumption by using the nonlinear ardl approach we show that indeed exchange rate changes do have short run and long run asymmetric effects on the m1 demand for money introducing nonlinearity also yields a stable money demand

on a cooperative advertising model for a supply chain with one manufacturer and one retailer abstract huang and li 2001 huang et al 2002 li et al 2002 xie and ai 2006 yue et al 2006 recently studied a game theoretic model for cooperative advertising in a supply chain consisting of one manufacturer and one retailer however the sales volume demand function considered in this model can become negative for some values of the decision variables and in fact this does happen for the proposed stackelberg and nash equilibrium solutions yue et al 2006 acknowledge the negativity problem and suggest two constraints to fix it however they do not incorporate these constraints into their mathematical analysis in this paper we show that the results obtained by analyzing the advertising model under the constraints suggested by yue et al can differ significantly from those obtained in the previous papers

coordinating advertising and pricing in a manufacturer retailer channel abstract cooperative advertising is a practice that a manufacturer pays retailers a portion of the local advertising cost in order to induce sales cooperative advertising plays a significant role in marketing programs of channel members nevertheless most studies to date on cooperative advertising have assumed that the market demand is only influenced by advertising expenditures but not by retail price this paper addresses channel coordination by seeking optimal cooperative advertising strategies and equilibrium pricing in a two member distribution channel we establish and compare two models a non cooperative leader follower game and a cooperative game we develop propositions and insights from the comparison of these models the cooperative model achieves better coordination by generating higher channel wide profits than the non cooperative model with these features a the retailer price is lower to consumers and b the advertising efforts are higher for all channel members we identify the feasible solutions to a bargaining problem where the channel members can determine how to divide the extra profits

how deep are the roots of economic development the empirical literature on economic growth and development has moved from the study of proximate determinants to the analysis of ever deeper more fundamental factors rooted in long term history a growing body of new empirical work focuses on the measurement and estimation of the effects of historical variables on contemporary income by explicitly taking into account the ancestral composition of current populations the evidence suggests that economic development is affected by traits that have been transmitted across generations over the very long run this article surveys this new literature and provides a framework to discuss different channels through which intergenerationally transmitted characteristics may impact economic development biologically via genetic or epigenetic transmission and culturally via behavioral or symbolic transmission an important issue is whether historically transmitted traits have affected development through their direct impact on productivity or have operated indirectly as barriers to the diffusion of productivityenhancing innovations across populations jel j11 o33 o47 z13

economic policy uncertainty and demand for money in australia abstractthe demand for money has received a great deal of attention in the empirical literature this literature however has emphasized factors such as interest rate income inflation rate and e

history lessons institutions factor endowments and paths of development in the new world the explanations offered for the contrasting records of long run growth and development among the societies of north and south america most often focus on institutions the traditional explanations for the sources of these differences in institutions typically highlight the significance of national heritage or religion we in contrast argue that a hemispheric perspective across the wide range of colonies established in the new world by the europeans suggests that although there were many influences factor endowments or initial conditions had profound and enduring effects on the long run paths of institutional and economic development followed by the respective economies

an error correction approach to money demand the case of sudan abstract an empirical analysis of money demand behavior in sudan is presented based on the dynamic error correction model a theoretical basis for the model is offered which allows an explicit parameterized division of effects into long run influences short term adjustments and proportional equilibrium conditions we refute previous claims that income and price effects may be abnormally high in sudan in part by accounting for both foreign exchange and inflationary influences

history expectations and leadership in the evolution of social norms we study the evolution of a social norm of cooperation in a dynamic environment each agent lives for two periods and interacts with agents from the previous and next generations via a coordination game social norms emerge as patterns of behaviour that are stable in part due to agents interpretations of private information about the past influenced by occasional commonly observed past behaviours for sufficiently backward looking societies history completely drives equilibrium play leading to a social norm of high or low cooperation in more forward looking societies there is a pattern of reversion whereby play starting with high low cooperation reverts towards lower higher cooperation the impact of history can be countered by occasional prominent agents whose actions are visible by all future agents and who can leverage their greater visibility to influence expectations of future agents and overturn social norms of low cooperation

note channel of distribution profits when channel members form conjectures it is well known that lower channel profits are achieved in the bilateral manufacturer reseller monopoly if manufacturer and reseller independently optimize their respective profits they take each other s decisions as given i e adopt decision rules that ignore their influence on the other channel member higher profits are achieved if they coordinate their profit maximizing decisions consequently there is an economic justification for 1 vertical integration that by definition prevents conflicting profit objectives or 2 contracts that change channel members incentives to the compatible objectives of shares of total channel profits this paper investigates the possibility that coordination might take place without formal arrangements like vertical integration or contracts the reason for this contention is the casual observation that channel members are often acutely aware of the interdependencies between channel participants we might thus expect that they will form conjectures about other channel members reactions to their own actions we show that rational conjectures lead profit maximizing channel members to adopt modified decisions rules can such conjectural decision making create at least partially channel coordination or cooperation in other words can channel members deviate from the nash equilibrium and thus achieve greater profits the answer given in this paper is a conditional yes

german monetary unification and the stability of the german m3 money demand function abstract this paper employs quarterly data from the whole of germany to test the stability of m3 demand for money the methodology is based on an application of the cusum and cusumsq in the context of error correction modeling and cointegration the results reveal some instability in m3 money demand function

demand for money in sri lanka during the post 1977 period a cointegration and error correction analysis this paper investigates the long run demand for money and short run dynamics of the long run money demand function for sri lanka during the post 1977 period while m1 is cointegrated with real income nominal interest rate short term foreign interest rate and real effective exchange rate m2 is not this suggests that monetary authorities should emphasize the narrow definition of money for monetary control the one year fixed deposits rate is cointegrated with m1 indicating the opportunity cost of holding money although the inflation rate is not cointegrated with m1 it seems to be an important determinant of the demand for m1 in the short run results also suggest that the short term foreign interest rate and the exchange rate can have important implications for the effectiveness of monetary policy monetary authorities must consider the response of domestic money demand to these external factors when formulating future monetary policies

a game theoretic approach to coordinate pricing and vertical co op advertising in manufacturer retailer supply chains vertical cooperative co op advertising is a marketing strategy in which the retailer runs local advertising and the manufacturer pays for a portion of its entire costs this paper considers vertical co op advertising along with pricing decisions in a supply chain this consists of one manufacturer and one retailer where demand is influenced by both price and advertisement four game theoretic models are established in order to study the effect of supply chain power balance on the optimal decisions of supply chain members comparisons and insights are developed these embrace three non cooperative games including nash stackelberg manufacturer and stackelberg retailer and one cooperative game in the latter case both the manufacturer and the retailer reach the highest profit level subsequently the feasibility of bargaining game is discussed in a bid to determine a scheme to share the extra joint profit

it s raining men hallelujah the long run consequences of male biased sex ratios we document the short and long run effects of male biased sex ratios we exploit a natural historical experiment where large numbers of male convicts and far fewer female convicts were sent to australia in the 18th and 19th centuries in areas with more male biased sex ratios women were historically more likely to get married and less likely to work outside the home in these areas today both men and women continue to have more conservative attitudes towards women working and women work fewer hours outside the home while these women enjoy more leisure they are also less likely to work in high ranking occupations we demonstrate that the consequences of uneven sex ratios on cultural attitudes labour supply decisions and occupational choices can persist in the long run well after sex ratios are back to the natural rate we document the roles of vertical cultural transmission and marriage homogamy in sustaining this cultural persistence

asset substitution money demand and the inflation process in brazil various domestic financial assets in brazil have provided relatively liquid nonmonetary alternatives monthly money demand estimates which include domestic asset opportunity costs and take account of t bill repurchase agreements in a dynamic error correction model demonstrate the importance of domestic substitutes in explaining money holdings money demand appears responsive and stable moreover t bills and indexed bonds have acted as an alternative to central bank liabilities as a source of finance for government deficits evidence indicates that the initial financing of government deficits through bonds bills and other nonmonetary liabilities may explain why money lags price shocks rather than vice versa copyright 1989 by ohio state university press

comment managing channel profits comment in a recent paper in this journal jeuland and shugan jeuland a s shugan 1983 managing channel profits marketing sci 2 summer 239 272 proposed a quantity discount schedule as a way of coordinating a channel as they put it on p 253 of their paper a quantity discount schedule which would fix the retailer s and hence the manufacturer s profits to some fixed linear function of total channel profits would lead the channel to maximize profits the purpose of this note is to show that a quantity discount schedule is not necessary for channel coordination

a re examination of the demand for money in small developing economies this paper re examines the money demand function in three small open economies of asia korea pakistan and singapore in addition to using the relatively new procedure of error correction modelling the roles of variables such as a the expected change in the exchange rate b foregin interest rates and c foreign exchange risks on money demand are examined in testing the importance of these variables in the money demand function special attention is paid to testing the assumptions of the classical linear regression model the sample period for each country spans from 1973 1 through 1990 1 the empirical results suggest that the error correction specification performs very well in addition to the traditional variables the results suggest that at least some measure of foreign monetary developments appear to have some significant effect on money demand behaviour in these small developing economies

cooperative advertising models in supply chain management a review this paper reviews articles on cooperative advertising a topic which has gained substantial interest in recent years thereby we first briefly distinguish five different definitions of cooperative advertising which can be found in operations research literature after that we concentrate on vertical cooperative advertising which is the most common object of investigation it is understood as a financial agreement where a manufacturer offers to pay a certain share of his retailer s advertising expenditures in total we identified 58 scientific papers considering mathematical modeling of vertical cooperative advertising these articles are then analyzed with regard to their general model setting e g the underlying supply chain structure and design of the cooperative advertising program after that we explain the different demand and cost functions that are employed whereupon we distinguish between static and dynamic models the last dimension of our review is dedicated to the game theoretic concepts which are mostly used to reflect different forms of distribution of power within the channel

another visit to the cagan model of money demand the latest russian experience abstract this paper investigates empirically the cagan style money demand function for russia during the recent hyperinflation era 1992 1994 using the johansen multivariate cointegration test results indicate that rate of change of exchange rate currency depreciation is required in the demand function for real m2 and real currency in order to obtain a stationary long run relationship error correction model results show that there exists a bidirectional causality between real money balances and determinants of real money demand including currency depreciation exchange rate sensitivity of the demand for money indicates currency substitution

cointegration tests of a long run relation between money demand and the effective exchange rate abstract for the period starting with the floating of the us dollar we find evidence that long run stationarity of the demand function for m2 but not m1 requires inclusion of the effective exchange rate these results lend some support to mckinnon s hypothesis that nonstationarity in the demand for money can be resolved by inclusion of the exchange rate jel f41 e41

exchange rate sensitivity of the demand for money in developing countries there is consensus among researches that under the present floating exchange rate system although developing countries peg their exchange rate to a major currency they cannot avoid fluctuation in their effective exchange rates as long as major currencies fluctuate against one another few authors have investigated the effects of changes in effective exchange rates of developing countries on their imports exports trade balance demand for international reserves inflation etc in this paper we try to inestigate the effects of effective exchange rates of developing countries on their demand for money previous authors who have estimated a money demand function inclusive of an exchange rate variable bilateral or effective have restricted themselves to industrial countries only by using quarterly data over the 1973 85 period it is shown that in most developing countries while the short run effcts of depreciation could be in either direction its long run effects are negative indicating that deprecia

vested interests in a positive theory of stagnation and growth we study a positive theory of stagnation and growth aimed at understanding the large variations in growth outcomes across actual economies the theory points to the fundamental role played by vested interests in determining policies which are key to the growth process some agents seek to prevent the adoption of new technologies we develop a model of technology adoption and show how technological innovation may sow the seeds of its own destruction in particular we find that the equilibrium is characterized by a long cycle of stagnation and growth over this cycle incumbents are phased out of the economy will new innovation occur in formalizing our theory we make a methodological contribution by characterizing dynamic voting equilibria when voters must forecast the effects of different current policies on future prices and policy outcomes

exchange rate sensitivity of demand for money and effectiveness of fiscal and monetary policies one of the arguments between proponents and opponents of floating exchange rates centres around the relative effectiveness of fiscal and monetary policy while proponents of floating rates argue that monetary policy is more effective under floating rates its opponents contend that fiscal policy is more effective under fixed rates however economic theory suggests that there is room for both policies under both types of exchange rate system depending upon degree of sterlization concentrating on the floating rates mundell 1963 has argued that the relative effectiveness of monetary and fiscal policies would also depend upon sensitivity of money demand to exchange rate more precisely he has conjectured that the demand for money is likely to depend upon the exchange rate in addition to the interest rate and the level of income this would slightly reduce the effectiveness of a given change in the quantity of money and slightly increase the effectiveness of fiscal policy on income and employment under

market share pioneering advantage a theoretical approach in this paper we present an industry in which a pioneer has entered accumulated capital in the form of goodwill and in his monopoly period has also reduced his cost of production as a result of some form of learning by doing at some later date a newcomer enters his production cost is higher than that of the monopolist at that date however due to diffusion of information the costs of the two firms equate at some future date once the new firm enters the market a duopolistic game begins in which the firms choose prices and investment rates analyzing this game we discover the conditions under which the final market shares no longer depend on the order of entry the initial cost advantage the length of the monopoly period or the length of time it took the newcomer to overcome the pioneer s cost advantage we analyze the speed and pattern of convergence to the final market shares and the capital path of the pioneer in his monopoly period depending on his beliefs concerning the possibility of entry

recent developments in dynamic advertising research a variety of continuous time differential functions have been developed to investigate dynamic advertising problems in business and economics fields since major dynamic models appearing before 1995 have been reviewed by a few survey papers we provide a comprehensive review of the dynamic advertising models published after 1995 which are classified into six categories i nerlove arrow model and its extensions ii vidale wolfe model and its extensions iii lanchester model and its extensions iv the diffusion models v dynamic advertising competition models with other attributes and vi empirical studies for dynamic advertising problems for each category we first briefly summarize major relevant before 1995 models and then discuss major after 1995 models in details we find that the dynamic models reviewed in this paper have been extensively used to analyze various advertising problems in the monopoly duopoly oligopoly and supply chain systems our review reveals that the diffusion models have not been used to analyze advertising problems in supply chain operations which may be a research direction in the future moreover we learn from our review that very few publications regarding dynamic advertising problems have considered the supply chain competition we also find that very few researchers have used the diffusion model to investigate the dynamic advertising problems with product quality as a decision variable and the pricing decision has not been incorporated into any extant lanchester model the paper ends with a summary of our review and suggestions on possible research directions in the future

war news and black market exchange rate deviations from purchasing power parity wartime south vietnam abstract this study evaluates the impact of war news on black market exchage rate deviations from purchasing power parity ppp in wartime vietnam the greater the number and intensity of u s troop engagements with the enemy the greater the confidence in the south vietnamise government and its fist currency during the period of heaviest u s military operations from 1967 to mid 1969 about 20 25 percent of the value of the piaster on the black market can be attributed to this confidence factor the results suggest that where variables to measure the news are available short run deviations from ppp can be readily explained

could myopic pricing be a strategic choice in marketing channels a game theoretic analysis abstract we identify the conditions under which a myopic pricing behavior could be a profit enhancing tool in the distribution channel a channel member is myopic when he ignores the evolution of the retail prices when actual and past retail prices affect consumers purchasing decisions a differential game is formulated where channel members control transfer and retail prices we start by examining a bilateral monopoly and then introduce competition at the manufacturing level the competing manufacturers play a la nash and can be both myopic both farsighted or one myopic while the other is farsighted we show that for a bilateral monopoly myopia enhances total channel profit when the effect of the reference price is small enough this remains true under competition at the manufacturing level when products are differentiated enough