commodity price responses to monetary policy surprises commodity prices are important both as a source of shocks and for the propagation of shocks originating elsewhere in the economy many vector autoregression var studies estimate a gradual response of commodity prices to monetary policy shocks exploiting information in high frequency financial market data and using the methods of rigobon and sack 2004 i find that a 10 basis point surprise change in interest rates causes commodity prices to fall immediately by about 0 5 this is about two thirds of the estimated response of the s p500 and about five times larger than the response in a var 12 months after the shock metals prices tend to respond more than agricultural commodities the point estimate for oil prices is similar to other commodities but is estimated imprecisely

new product introduction and incumbent response strategies their interrelationship and the role of multimarket contact in this article the author studies the determinants of both new product introduction and incumbent response strategies in a single integrated framework building on previous research in strategic

informational content of government hogs and pigs reports we examine the value of the informational content of quarterly government reports which estimate forthcoming supplies of hogs and pigs it is assumed that a hypothetical futures trader obtains the government reports one day in advance of their release a futures market trading rule is established which uses early access to the reports together with a priori expectations of the reports contents we find the market information in the government reports is of little or no value to a futures trader in advance of the release date because this information is already incorporated in the futures price

market entry strategy under firm heterogeneity and asymmetric payoffs how should a firm decide whether or not to enter an untested market when a competing firm is vying for the same market should a firm always speed to the market in an effort to capitalize on pioneering advantages we address those questions by developing a simple game theoretical model that captures the most essential factors in a firm s market entry decision such as market uncertainty firm heterogeneity competition cannibalization and order of entry effects our analysis shows that in a competitive context both pioneering advantages and laggard s disadvantages can motivate a firm to speed to an untested market therefore pioneering advantages alone are not an adequate guide for a firm to formulate its market entry strategy the optimal decision may call for a firm to be a prudent laggard when pioneering advantages to the firm are substantial or to become a market pioneer when facing pioneering disadvantages we characterize different patterns of market entry as equilibrium outcomes for different configurations of the market reward structure and offer a conceptual framework for formulating market entry strategies that go beyond the conventional dichotomy speed or wait we show that the paradoxical phenomenon of disadvantaged pioneers can arise in a competitive context as the outcome of rational firms making rational choices to show that pioneering advantages alone are not the right litmus test for market entry decisions we apply our general framework to a concrete case where consumer preference or the premium that consumers are willing to pay for the pioneering brand gives rise to pioneering advantages and laggard s disadvantages we conclude that the firm with a larger pioneering premium may choose to wait while a firm with a smaller pioneering premium speeds to the market our analysis also sheds light on empirical research on pioneering advantages because firms may race into a market solely to avoid laggard s disadvantages rather than to capture pioneering advantages pioneers are not necessarily the firms best positioned to establish exploit and maintain pioneering advantages therefore it is not surprising that a significant percentage of pioneers fail as documented by recent empirical research our normative investigation further suggests that this predicament in empirical research will not disappear even if we have complete data use the right measurements and employ perfect statistical techniques therefore it is perhaps more fruitful to redirect our research effort in the search for pioneering advantages finally we extend our analysis to incorporate the effect of cannibalization on an incumbent firm s market entry strategy we conclude that cannibalization can motivate an incumbent firm to wait as the conventional wisdom suggests but it can also be an impetus for a firm to become a market pioneer we offer supporting evidence for our analysis and discuss managerial implications of our conclusions

intermediation and resale in networks i study intermediation via sequential bilateral bargaining in markets with a network structure a partition of the network into layers captures intermediation power competition governs trade withi

bargaining orders in a multi person bargaining game abstract this paper studies a complete information bargaining game with one buyer and multiple sellers of different sizes or bargaining strengths the bargaining order is determined endogenously with a finite horizon there is a unique subgame perfect equilibrium outcome in which the buyer purchases in order of increasing size from the smallest to the largest with an infinite horizon if the sellers have sufficiently different sizes there is a unique equilibrium outcome which has the same bargaining order if the sellers have similar sizes with an infinite horizon there may be multiple equilibrium outcomes with different bargaining orders

live cattle futures response to cattle on feed reports knight ridder surveys provide prerelease expectations of the information in the cattle on feed reports the knight ridder information is employed here in accordance with the efficient markets hypothesis to identify the unanticipated information provided in cattle on feed reports rational expectations theory is used to test knight ridder forecasts for unbiasedness efficiency and forecast performance the forecasts mostly satisfy rationality conditions live cattle futures prices respond to unanticipated information about placements and marketings contained in cattle on feed releases however report information is absorbed quickly

the concept of quality and the efficiency of markets for consumer products can consumers trust prices to be good quality indicators previous studies based on quality data from consumer reports have indicated that the relation of price to overall quality is quite weak this paper demonstrates that these studies are methodologically invalid by showing that the concept of overall quality has many dimensions to what extent do inefficient variants occur in the market previous studies have suggested that there is a considerable degree of inefficiency in the market alternative calculations imply that inefficient variants are in fact frequent but that the loss to consumers is much lower than previously suggested

modelling the link between commodity prices and exchange rates the tale of daily data this paper examines daily data on exchange rates and the prices of three commodities traded on the winnipeg commodity exchange the temporal patterns of commodity prices and exchange rates are shown to be similar daily data are significantly non normal with garch models capturing the processes generating the data commodity prices and exchange rates are examined for cointegration using recent tests proposed by johansen and juselius 1990 currency depreciation is shown to granger cause commodity price inflation this information might be useful to central bankers concerned with reducing general price inflation through targeting commodity price inflation it also suggests that macro events have important effects on commodity markets in canada

the value of quality product quality is probably undervalued by firms because there is little consensus about appropriate measures and methods to research quality we suggest that published ratings of a product s quality are a valid source of quality information with important strategic and financial impact we test this thesis by an event analysis of abnormal returns to stock prices of firms whose new products are evaluated in the wall street journal quality has a strong immediate effect on abnormal returns which is substantially higher than that for other marketing events assessed in prior studies moreover there are some important asymmetries in the effect we discuss the research managerial investing and policy implications

intra firm bargaining under non binding contracts we present a new methodology for studying the problem of intra firm bargaining based on the notion that contracts cannot commit the firm and its agents to wages and employment we develop and analyse a general non cooperative multilateral bargaining framework between the firm and its employees and consider outcomes which are immune to renegotiations by any party equilibrium firm profits are characterizable as both a weighted average of a neo classical non bargaining firm s profits and a generalization of shapley value for a corresponding cooperative game furthermore the resulting payoffs induce economically significant distortions in the firm s input and organizational design decisions

payoff uncertainty bargaining power and the strategic sequencing of bilateral negotiations this article investigates the sequencing choice of a buyer who negotiates with the sellers of two complementary objects with uncertain payoffs the possibility of inefficient trade may generate strict sequencing preference the buyer begins with the weaker seller if the sellers have diverse bargaining powers and with the stronger one if both sellers are strong bargainers this sequencing is likely to increase the social surplus moreover the buyer may find it optimal to raise her own acquisition cost by committing to a minimum purchase price or outsourcing the first and second mover advantages for the sellers are also identified

competitive price and quality under asymmetric information we present an analysis of equilibrium in markets with asymmetrically informed consumers some consumers know both price and quality of all sellers whereas others know neither but may search among sellers the equilibrium correlation between price and quality generally increases with the level of information in the market and can be negative when this level is sufficiently small a meta analysis of the available empirical studies strongly supports the model s predictions

fooling all of the people some of the time a theory of endogenous sequencing in confidential negotiations we analyse a bargaining game in which one party called the buyer has the option of choosing the sequence of negotiations with other participants called sellers when the sequencing of negotiations is confidential and the sellers goods are highly complementary efficient non dissipative equilibria exist in which the buyer randomizes over negotiation sequences in these equilibria the buyer can obtain higher pay offs than in pure strategy equilibria or in public negotiations the degree of sequencing uncertainty that maximizes buyer pay offs is inversely related to the aggregate bargaining power of the sellers

the effect of standardized information on firm survival and marketing strategies we argue that standardized information disclosure information using a common format and uniform metrics creates asymmetric opportunities for firms which affects their strategies and survival we test our predictions using a longitudinal quasi experimental field study involving the nutrition labeling and education act of 1990 nlea and we focus on firm market share within a category as a key asymmetry findings indicate that in general the nlea had no effect on firm responses however when accounting for firm differences we observe that the nlea led to 1 an increase in small share firm exits and 2 a greater increase in distribution for large share firms no concurrent increase in price by large share firms following the nlea was observed we conclude by discussing the implications of these effects for firm strategy the design of public policy and theories regarding the impact of information on markets

measuring market efficiency and welfare loss this study presents a general methodology capable of addressing a number of fundamental questions in consumer policy are consumers paying more than the minimum price for a given bundle of attributes if so what brands cost more than the consumer needs to pay what would be the degree of improvement in the consumer s well being if some intervention sets the price of such inefficient brands at the efficient level we apply the methodology to data on atuomobiles and several other goods and analyze the determinants of efficiency

quality price advertising and published quality ratings economic literature contains several sometimes contradictory hypotheses concerning the relationships among quality price and advertising we investigate the impact of published quality ratings on these relationships and find that quality and advertising are much more likely to be positively related in the presence of quality ratings

order of market entry established empirical generalizations emerging empirical generalizations and future research three established and four emerging empirical generalizations are identified below the first established generalization is that there is a negative relationship between order of market entry and market share second for consumer packaged goods and prescription anti ulcer drugs the entrant s market share divided by the first entrant s share roughly equals one divided by the square root of order of market entry third in mature markets market pioneer share advantages slowly decline over time while the emerging generalizations require additional research support the initial findings suggest 1 for consumer packaged goods order of market entry has a stronger negative relationship with trial penetration than with repeat purchase 2 market pioneers have broader product lines than late entrants 3 skill and resource profiles differ across market pioneers early followers and late entrants and 4 order of market entry is not related to long term survival rates future research topics are also dis

supply fundamentals and grain futures price movements a long standing puzzle in commodity markets is the low explanatory power of supply and demand fundamentals for explaining the variability of prices in these markets we apply an instrumental variable correction for measurement errors to investigate how noise in the surprise component of usda crop production reports affects estimated price responses in corn soybeans and wheat futures markets from 1970 to 2016 our findings demonstrate that after correcting for measurement error in market surprises the explanatory power of our models increases about threefold and often exceeds 70 this is compelling evidence that fundamental supply news play an important role in explaining grain futures price movements

stock prices and economic news this paper examines the daily response of stock prices to announcements about the money supply inflation real economic activity and the discountrate except for the discount rate survey data on market participants expectations of these announcements are used to identify the unexpected component of the announcements in order to test the efficient markets hypothesis that only the unexpected part of any announcement the surprise moves stock prices the empirical results support this hypothesis and indicate further that surprises related to monetary policy significantly affect stock prices there is only limited evidence of an impact from inflation surprises and no evidence of an impact from real activity surprises on the announcement days there is also only weak evidence of stock price responses to surprises beyond the announcement day this abstract was borrowed from another version of this item

the importance of the agenda in bargaining abstract this paper discusses a multi issue bargaining game in which the players set up an agenda and negotiate on the issues sequentially according to this agenda we demonstrate that the agenda might play an important role in the bargaining and discuss the relationship between the agenda and the final outcome of the bargaining game assuming that players have conflicting evaluations regarding the importance of the issues under negotiation we identify the type of agenda each player prefers we also show that in such cases the outcome of the bargaining game need not to be efficient by demonstrating the strategic use of the agenda the paper explains the phenomenon of bargaining on the agenda

the effects of macroeconomic announcements on commodity prices this article analyzes the immediate reaction of a representative sample of commodity prices and two t bill yields to the unanticipated components of thirteen macroeconomic announcements surprises in the monetary variables cause the majority of the significant commodity price responses while these plus other cyclical surprises such as the unemployment rate cause significant lumber and t bill reactions the results provide strong support for the policy anticipations hypothesis and against the inflationary expectations hypothesis i e that monetary surprises cause changes in real interest rates rather than in nominal rates only as the inflationary expectations hypothesis contends

decentralized one to many bargaining we study a one to many bargaining model in which one active player bargains with every passive player on how to share the surplus of a joint project the order of bargaining is not fixed and the active player decides whom to bargain with in each period our model admits a rich set of equilibria and we identify the upper and lower bounds of equilibrium payoffs we also examine whether two natural ordering protocols often assumed in existing studies can sustain endogenously although the queuing protocol may indeed arise in an equilibrium the rotating protocol is in general not self enforcing

a letter to the editor on wage bargaining abstract the rubinstein perfect information alternating offers bargaining model is problematic when applied to wage negotiations a strike or any other industrial action is not an automatic consequence of a delay in reaching an agreement because production can continue normally also when negotiations take place this paper extends the rubinstein model to incorporate the choice of calling a strike and it is shown that in this model there is no longer a unique subgame perfect equilibrium and that strikes with a length in real time can occur in equilibrium

first things first the agenda formation problem for multi issue committees abstract the paper focuses on sequential bargaining procedures in which parties are allowed to differ in several respects we first highlight the strategic effects in the bargaining game and the often conflicting incentives that players need to take into account in forming their preferences over agendas we then show that there is a pareto superior agenda among the issue by issue procedures this consists in setting the most important issue first unless this is difficult urgent in the sense that there is probability of game breakdown after a rejection in the negotiations over this issue in this case parties prefer to negotiate over the easy issue first

commentaries and rejoinder to does quality win network effects versus quality in high tech markets a substantial body of theoretical literature indicates that network effects may hinder the entry of higher quality products into markets in which network effects are impor tant however tellis yin and niraj 2009 provide com pelling evidence that in general higher quality offerings win out in software markets after a short time lag because software markets are commonly believed to be susceptible to network effects this finding provides important empiri cal evidence against the hypothesis that network effects impede entry because tellis yin and niraj obtain their results across a large number of product categories and because their analysis holds up across various methods their evidence that high quality trumps network effects is impressive however in the final section of the article tellis yin and niraj are careful to provide a set of limitations for their research because i believe that their results must be quali fied in the light of these limitations i elaborate on some of these in my comment because the authors have gone about as far as possible with the data at their disposal this com ment is intended to stimulate further research on the topic of network effects and quality consistent with tellis yin and niraj s research objec tives their conceptual model focuses on the demand side and factors that might affect consumer response but the supply side is also important in particular it is not known whether the firms refrained from developing or marketing products because they judged that network effects were too difficult to overcome thus the results are subject to a sam ple selection problem in which only products that suppliers believed to be worthy of introduction on the market were selected because the sample is limited to cases in which suppliers believed that introducing the product on the mar ket was justified in the face of any network effects this cre ates an unknown bias toward showing that quality can over come network effects a related consideration is that suppliers have ways of dealing with network effects or even using them to their advantage one is to make the higher quality product com patible with its predecessor such as making excel compati ble with lotus another is to arrange to have software bun dled with the sale of new computers thus forcing its acceptance in the market for example a current buyer of a windows computer must either accept vista or have some one uninstall this software in favor of an older version a time consuming and expensive process this bundling may have facilitated the adoption of windows word excel internet explorer powerpoint aol and possibly other software types supplier actions to mitigate network effects such as compatibility and bundling do not invalidate the general findings in tellis yin and niraj s article rather they may help explain how and why network effects can be overcome

delay in multilateral bargaining under complete information abstract this paper analyzes a complete information infinite horizon multilateral bargaining model in which one player bargains with each of the other players one at a time and binding cash offer contracts are used to govern transactions under a weak stationarity condition on equilibrium strategies we characterize the set of equilibria for the game we show that when players are sufficiently patient significant delay in reaching agreements may emerge and this delay can become longer quickly as the number of involved parties rises indeed when the number of bargainers is large perpetual disagreement can occur in equilibrium journal of economic literature classification numbers c78 d23 d62

a non cooperative bargaining model with strategically timed offers abstract rubinstein s alternating offers bargaining model is enriched by allowing players to choose when and whether or not to make an offer time is continuous and players make offers whenever they wish it is assumed that upon making an offer players must wait a fixed amount of time before making another it is shown that if players can react arbitrarily quickly to their opponent s offers then all subgame perfect equilibrium outcomes are rubinstein like in particular efficient however if it takes time to react then some delay can be supported this potential delay becomes arbitrarily large as reaction times increase journal of economic literature classification numbers c78 c72

quantifying the wasde announcement effect this article uses a two stage gls model to quantify the world agricultural supply and demand estimates wasde announcement effect for cotton soybeans and hard winter wheat controlling for important factors associated with commodity price volatility the information presented by the overlapping nature of futures contracts is exploited to estimate conditional effects by month inventory conditions and delivery horizon results in this article show that the wasde announcement effect persists across contract positions is not limited to months that include nass crop survey data is amplified during low carryover periods for soybeans and wheat and is rapidly incorporated into futures prices

indexing product quality issues theory and results jn the concept of quality and the efficiency of markets for consumer products hjorth andersen 1984 strongly condemns the use of overall productquality rankings such as those published by consumer reports as a basis for scientific research his primary criticism is that creating an index of quality as a weighted average of subscores is usually misleading he claims that this averaging process is unjustified except for brands that occupy approximately the same rank position on each attribute this article reviews hjorth andersen s arguments and identifies several important related questions on the use of published quality ratings in academic research statistical theory is developed to demonstrate that hjorth andersen s conclusions are limited and to examine the precise conditions under which his conclusions hold empirical evidence is presented that reveals the statistical frequency in real markets of the logical conditions deduced using our theory our conclusions differ significantly from those drawn by hjorthandersen a debate about the efficacy of quality indices is relevant not only to academic research but also to consumer welfare and strategic marketing planning consumer welfare and choice is affected by published quality ratings archibald haulman and moody 1983 beales et al 1981 thorelli and thorelli 1977 commercial importance is evident from the widespread distribution of magazines like consumer reports the consumer testing movement started in 1927 by chase and schlink has spread to agencies in more than 50 nations these agencies are members of the international organization of consumers unions iocu and the combined circulation of their magazines is in the millions published quality ratings also influence academic research our literature review identified more than 30 studies that use objective quality ratings as data from which to draw inferences about price versus quality tradeoffs advertising versus quality interactions price versus quality changes over product life cycles brand switching market efficiency and rational consumer judgments since this review concentrated on the marketing and economics literature it is likely that the role of published quality ratings in academic research has been underestimated in any case academic researchers can and should assist product testing agencies in understanding sources of potential error in their quality scales strategic research such as that conducted by the strategic planning institute at harvard university has focused management attention on the influence of product quality on market performance measures like market share and rate of return on investment for example phillips chang and buzzell 1983 indicate that product quality influences a firm s market share directly and its rate of return on investment indirectly through market share see also day 1986 farris and reibstein 1979 urban et al 1984 it is important that future research define coherently and measure accurately the construct of quality

striking for a bargain between two completely informed agents this paper models the wage contract negotiation procedure between a union and a firm as a sequential bargaining process in which the union must decide in each period whether or not to strike for the duration of that period we show that there exist subgame perfect equilibria in which the union engages in several periods of strikes prior to reaching a final agreement although both parties are completely rational and fully informed this has implications for other inefficient phenomena such as tariff wars debt negotiations and wars in general we characterize the set of equilibria show that strikes can occur in real time and discuss extensions of the model such as lockouts and the possibility of multiple recontracting opportunities copyright 1991 by american economic association

the real product market impact of mergers i document sources of value creation in mergers by analyzing novel data on the quality and price of goods sold by merging firms when two competitors in a product market merge their products converge in quality and prices fall relative to the competition these effects take two to three years to be fully realized and are stronger in mature industries prices do not fall however when the acquirer is diversifying into a new product market this direct evidence of real changes induced by merger activity is consistent with consolidation by related merging firms to achieve operational efficiencies and lower costs

transparency complementarity and holdout this paper characterizes the conditions under which holdout i e bargaining inefficiency may or may not be significant in a two sided one buyer many seller model with complementarity we address this problem in a very general setup with a bargaining protocol that is symmetric and allows for both publicly observable as well as secret offers and a technology that allows for variable degrees of complementarity the central insight is that the transparency of the bargaining protocol formalized by whether offers are publicly observable or secret as well as the extent of complementarity play a critical role in generating efficiency even with perfect complementarity holdout seems to be largely resolved whenever the bargaining protocol is public but not if it is secret further irrespective of the bargaining protocol holdout is resolved if the marginal contribution of the last seller is not too large

an investigation of the effect of monetary factors on agriculture abstract this paper uses an econometric model to assess some of the effects of macro monetary factors on u s agricultural markets attention is focused on impacts of decreasing increasing the level of domestic credit on agricultural trade prices inventory accumulation and domestic disappearance results show that tight monetary policy lowers prices and increase demand for domestic agriculture however the upward pressure on the exchange rate seriously deteriorates the position of u s exports in international markets

asymmetric information bargaining problems with many agents a yes or no decision must be made about some issue all agents must agree the coase theorem asserts that the efficient outcome will always result suppose the value positive or negative that an individual attaches to an affirmative decision is privately known to that individual it is proved under very mild conditions that with independent types as the number of agents increases the probability of an affirmative efficient decision goes to zero an example in which it is common knowledge that an affirmative decision is efficient and yet the probability of such a decision goes to zero is given

the impact of public and semi public information on cotton futures market abstractthis study estimated the impact of all major public and semi public reports on the cotton futures market from 1995 through 2012 the estimation was based on the event study approach with the events measured by the release of five major reports export sales crop progress world agricultural supply and demand estimates wasde and prospective plantings public reports from us department of agriculture and cotton this month semi public report from international cotton advisory committee the best fitting igarch 1 1 t model that accounted for the day of week seasonality and stock levels was used to measure the report effects on daily nearby cotton close to close futures returns prospective plantings and wasde reports appeared to be the most important sources of information in the cotton markets moving the conditional standard deviation of returns by an average of 14 4 and 9 6 percentage points respectively however significant market reaction was not found for the other three reports our an

negotiations in multi issue committees abstract we propose a non cooperative bargaining approach to the problem of collective decision making in committees by modelling this process as a sequential bargaining game the main objective of the paper is to discuss the formation of the agenda in multi issue committees and its relation to the importance of the issues we start by asserting that in the case of a single issue the set of all equilibrium outcomes of our game coincides with the set of coalitional stable outcomes we then consider multi issue committees to discuss the problem of forming agendas we argue that from the point of view of efficiency and stability the most important issues should be put first on the agenda we conclude with a sufficient condition on players preferences which guarantees the efficiency and stability of the bargaining outcomes for every possible agenda

does it pay to change your company s name a stock market perspective a company s name is commonly considered to be an integral part of its image just like the quality of its products or the quality of its technical services changing a company s name is a major policy decision contemplated by many firms and actually implemented by some each year this paper attempts to examine albeit indirectly whether a name change can improve the profit performance of a firm and what type of firm is more likely to succeed in doing so we use the event study methodology developed in finance to examine the above questions with respect to 58 corporations that changed their names in 1981 1985 our findings are that for most of the firms name changes are associated with improved performance and that the greatest improvement tends to occur in firms that produce industrial goods and whose performance prior to the change was relatively poor evidence that industrial good producers are also heavy users of corporate advertising lends further credence to this finding our findings do not support however the contention that the new name per se will enhance demand for the firm s products rather it seems that the act of a name change serves as a signal that other measures to improve performance such as changes in product offerings and organizational changes will be seriously and successfully undertaken the rationale behind why such a signal is sent and why it is believed is discussed

psychic distance and performance of mncs during marketing crises when multinational corporations face foreign marketing crises the psychic distance between the home and host country represents a distinct challenge this paper examines the curvilinear relationship between psychic distance and firm performance during marketing crises and the moderating role of marketing capabilities we test our hypotheses using an event study on a panel dataset of 217 firms based in 19 countries facing crises in 41 host countries the results show that 1 marketing crises are most harmful when the host country is either very close or far away and 2 firms can mitigate this effect with marketing capabilities

strategic delay in bargaining this paper analyses a bargaining model with incomplete information in which the time between offers is an endogenous strategic variable we find equilibria involving a delay to agreement that is due to the use of strategic time delay by bargainers to signal their relative strength under some specifications of the parameters delay is present in the unique sequential equilibrium whose beliefs satisfy one intuitive restriction this delay does not vanish as the minimal time between offers becomes small

optimizing multi stage negotiations abstract we consider procedures where issues of varying importance and risk are negotiated in stages negotiation at any stage requires an agreement at each previous stage if negotiation terminates players realize the benefits from all earlier agreements we formalize this process by a strategic n stage negotiation game the expected subgame perfect equilibrium outcome is characterized by an intuitive compact formula which aggregates all the structural elements of the multi stage process we describe the optimal negotiation agenda for a given decomposition of the bargaining problem and we derive intuitive prescriptions for an optimal decomposition