production lot sizing and carbon emissions under cap and trade and carbon tax regulations cap and trade and carbon tax are two emission regulations widely used to curb the carbon emissions generated from firms based on economic order quantity eoq model this paper examines the production lot sizing issues of a firm under these two regulations respectively the optimal lot size and emissions under the two regulations are achieved we then investigate the impacts of production and regulation parameters on the optimal lot size and emissions furthermore we compare the firm s optimal carbon emissions under the two regulations it is found that under the cap and trade regulation the firm s decisions of the optimal emissions as well as permits trading depend on the differentiated permits trading prices if setup incurs the same cost as holding incurs per unit of generated emissions both regulations always lead to the same optimal emissions which is also equal to that without emission regulation otherwise neither regulation always leads to lower emissions than the other does

a two echelon sustainable supply chain coordination under cap and trade regulation this paper analyses the decision behaviour and coordination mechanisms for a two echelon sustainable supply chain under a cap and trade regulation in a make to order setting carbon emissions are generated primarily by the downstream manufacturing process and the market demand of the supply chain is affected by two decision variables the sustainability level and the selling price the impact of the unit emissions trading price on the optimal decision variables in both centralized and decentralized systems is revealed the comparison of decentralized and centralized systems shows that the increase in total profit in centralized system is at most 1 3 that in decentralized system to achieve the same profit as the centralized system we consider two contracts to coordinate the sustainable supply chain revenue sharing and two part tariff contracts by analysing the conditions for a win win outcome we prove that only the two part tariff contract can lead to perfect coordination finally sensitivity analysis of the key parameters is undertaken as part of a numerical example illustrating the theoretical results

an analysis of the impact of negative csr forced labour parameter on the profitability of supply chain contracts abstract this paper provides a mathematical model to analyse the impact of a negative corporate social responsibility csr parameter that for forced labour on supply chain profitability based on coordination contracts four types of supply chain coordination contract are developed and benchmarked against set performance indices employing sensitivity analysis and non linear optimization techniques nash static and stackelberg dynamic models are employed to represent the gameplay between the manufacturer and retailer in a supply chain the key inputs are average demand and forced labour ratios whereas key performance indicators are advertising inventory and pricing costs our results indicate that by reducing the proportion of forced labour for both members of the supply chain the overall profitability increases in a nash static gaming context however the contractual relationships in a stackelberg dynamic situation provide a different picture here if the retailer assumes the leadership role cost sharing contracts increase the profitability for both partners however if the manufacturer assumes the leader the profit sharing contract leads to the highest overall profit furthermore sensitivity analysis confirms that an ideal situation is one in which the forced labour ratio approaches zero where the profitability of the retailer is usually higher than that of the manufacturer previous researchers have used survey based methods to develop proportional or mediating relationships to measure the impact of csr on supply chain profitability this paper addresses the associated gap by providing a game theoretic based non linear mathematical model to assess the direct impact of negative csr on supply chain profitability and benchmarks the performance of different supply chain contracts

direct and indirect intervention schemas of government in the competition between green and non green supply chains abstract this study investigates equilibrium between green and non green product types under different government intervention schemas to this end we establish production competition models of a set of green and non green supply chains gscs and ngscs respectively gscs and ngscs are two echelon supply chains scs that present green and non green types of a product to a market respectively we consider two schemas of governmental intervention direct tariffs dts and tradable permits tps both with and without baselines this research seeks to evaluate how the gscs and ngscs respond to the dt or tp schemas to establish the best sc response strategies we formulate three level non linear programming problems for four possible governmental intervention scenarios we find that this problem is multidimensional with different system stakeholders including the government scs consumers and the environment in fact different schemas result in different satisfaction levels of stakeholders thus an appropriate schema can be selected by considering corresponding effects on the stakeholders the comprehensive evaluation of a case study on residential building construction scs yields significant managerial insights

financial intermediary coalitions abstract in this article an environment in which the investment opportunities of agents are private information is studied and it is shown that financial intermediaries arise endogenously within that environment it is established that financial intermediaries are part of an efficient arrangement in the sense that they are needed to support the authors private information core allocations these intermediaries which are coalitions of agents exhibit the following characteristics in equilibrium they borrow from and lend to large groups of agents they produce information about investment projects and they issue claims that have different state contingent payoffs than claims issued by ultimate borrowers

reverse channel design the case of competing retailers the economical and environmental benefits of product remanufacturing have been widely recognized in the literature and in practice in this paper we focus on the interaction between a manufacturers reverse channel choice to collect postconsumer goods and the strategic product pricing decisions in the forward channel when retailing is competitive to this end we model a direct product collection system in which the manufacturer collects used products directly from the consumers e g print and copy cartridges and an indirect product collection system in which the retailers act as product return points e g single use cameras cellular phones we first examine how the allocation of product collection to retailers impacts their strategic behavior in the product market and we discuss the economic trade offs the manufacturer faces while choosing an optimal reverse channel structure when a direct collection system is used channel profits are driven by the impact of scale of returns on collection effort whereas in the indirect reverse channel supply chain profits are driven by the competitive interaction between the retailers subsequently we show that the buy back payments transfered to the retailers for postconsumer goods provide a wholesale pricing flexibility that can be used to price discriminate between retailers of different profitability

exchange rate pass through exchange rate volatility and exchange rate disconnect abstract this paper explores the hypothesis that high volatility of real and nominal exchange rates may be due to the fact that local currency pricing eliminates the pass through from changes in exchange rates to consumer prices exchange rates may be highly volatile because in a sense they have little effect on macroeconomic variables the paper shows the ingredients necessary to construct such an explanation for exchange rate volatility in addition to the presence of local currency pricing we need a incomplete international financial markets b a structure of international pricing and product distribution such that wealth effects of exchange rate changes are minimized and c stochastic deviations from uncovered interest rate parity together it is shown that these elements can produce exchange rate volatility that is much higher than shocks to economic fundamentals and disconnected from the rest of the economy in the sense that the volatility of all other macroeconomic aggregates are of the same order as that of fundamentals

comparisons of initial carbon allowance allocation rules in an o2o retail supply chain with the cap and trade regulation abstract this paper focuses on an o2o retail supply chain in the context of low carbon environment the decision models are constructed under three cases without cap and trade regulation cap and trade regulation based on grandfathering mechanism and cap and trade regulation based on benchmarking mechanism the emission reduction strategies of the supply chain members in the three cases are then discussed the paper compares the effects of the grandfathering and benchmarking mechanisms on the firm s decisions profits and social welfare firstly the results show that the unit carbon quota plays a decisive role in firm s decisions compared with the grandfathering methodology the benchmarking one can more effectively push manufacturers to produce low carbon products and motivate retailers to promote low carbon products secondly it is profitable for the retailer to cooperate with a manufacturer who has lower emission reduction cost simultaneously the retailer will prefer the benchmarking mechanism to the grandfathering mechanism thirdly for the government it is beneficial to use grandfathering mechanism for low carbon emission firms and use benchmarking mechanism for high carbon emission firms also the paper provides government and firms with conditions where the benchmarking allocation method is more suitable for sustainable development the government s decision on benchmarks is a critical factor in maximizing the social welfare

a new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the business cycle abstract this paper introduces a general procedure for decomposition of non stationary time series into a permanent and transitory component allowing both components to be stochastic the permanent component is shown to be a random walk with drift and the transitory or cyclical component is a stationary process with mean zero the decomposition methodology which depends only on past data and therefore is computable in real time is applied to the problem of measuring and dating business cycles in the portwar u s economy we find that measured expansions and contractions are of roughly equivalent duration and that our dating of cyclical episodes tends to lead the traditional nber dating and to a lesser extent the growth cycle chronology of zarnowitz and boschan 1977

precise and efficient computation of the beveridge nelson decomposition of economic time series abstract this note shows how the beveridge nelson decomposition of economic time series can be precisely computed without the necessity for truncating infinite sums the algorithm includes those of beveridge and nelson 1981 and miller 1988 as special cases for particular models correcting an error in the latter

strategic decentralization in channels the purpose of this paper is to understand the effect of strategic interaction on a manufacturer s channel structure decision in the model i analyze if there were no strategic interaction then the manufacturer would prefer vertical integration to decentralization with strategic interaction however decentralization can be a nash equilibrium strategy as mcguire and staein mcguire timothy richard staelin 1983a an industry equilibrium analysis of downstream vertical integration marketing sci 2spring 161 192 showed so the question arises what is it about strategic interaction that makes decentralization a nash equilibrium strategy the answer i give is that strategic interaction makes it possible for a manufacturer s retail demand curve to rise when he decentralizes i show that this raising of the demand curve on decentralization can happen only if one of the following mutually exclusive conditions is satisfied 1 the manufacturers products are demand substitutes at the retail level and strategic complements at the manufacturer or retailer levels 2 the manufacturer s products are demand complements at the retail level and strategic substitutes at the manufacturer or retailer levels strategic complementarity at the retailer manufacturer level means that if one retailer manufacturer raises his price then the other retailer manufacturer would raise his price as well strategic substitutability is just the opposite these results show that what is important for decentralization to occur is not how demand substitutable the two manufacturers products are as one might have thought from earlier works in the literature but rather the nature of coupling between demand dependence and strategic dependence

bargaining in competing supply chains with uncertainty abstract substantial literature has been devoted to supply chain coordination the majority of this literature ignores competition between supply chains moreover a significant part of this literature focuses on coordination that induce the supply chain members to follow strategies that produce the equilibria chosen by a vertically integrated supply chain this paper investigates the equilibrium behavior of two competing supply chains in the presence of demand uncertainty we consider joint pricing and quantity decisions and competition under three possible supply chain strategies vertical integration vi manufacturer s stackelberg ms and bargaining on the wholesale price bw is the bargaining parameter over a single or infinitely many periods we show that in contrast to earlier literature using vivi vi in both chains is the unique nash equilibrium over one period decision while using msms or bw bw may be nash equilibrium over infinitely many periods

competing manufacturers in a retail supply chain on contractual form and coordination it is common for a retailer to sell products from competing manufacturers how then should the firms manage their contract negotiations the supply chain coordination literature focuses either on a single manufacturer selling to a single retailer or one manufacturer selling to many possibly competing retailers we find that some key conclusions from those market structures do not apply in our setting where multiple manufacturers sell through a single retailer we allow the manufacturers to compete for the retailer s business using one of three types of contracts a wholesale price contract a quantity discount contract or a two part tariff it is well known that the latter two more sophisticated contracts enable the manufacturer to coordinate the supply chain thereby maximizing the profits available to the firms more importantly they allow the manufacturer to extract rents from the retailer in theory allowing the manufacturer to leave the retailer with only her reservation profit however we show that in our market structure these two sophisticated contracts force the manufacturers to compete more aggressively relative to when they only offer wholesale price contracts and this may leave them worse off and the retailer substantially better off in other words although in a serial supply chain a retailer may have just cause to fear quantity discounts and two part tariffs a retailer may actually prefer those contracts when offered by competing manufacturers we conclude that the properties a contractual form exhibits in a one manufacturer supply chain may not carry over to the realistic setting in which multiple manufacturers must compete to sell their goods through the same retailer

was it real the exchange rate interest differential relation over the modern floating rate period in this paper we explore the relationship between real exchange rates and real interest rate differentials in the united states germany japan and the united kingdom contrary to theories based on the joint hypothesis that domestic prices are sticky and monetary disturbances are predominant we find little evidence of a stable relationship between real interest rates and real exchange rates we consider both in sample and out of sample tests one hypothesis that is consistent with our findings is that real disturbances such as productivity shocks may be a major source of exchange rate volatility this paper investigates the empirical relationship between major currency real exchange rates and real interest rates over the modern post march 1973 flexible rate experience the exchange rates examined here include the dollar mark dollar yen and dollar pound rates our two major findings are as follows first the data do not indicate a strong correspondence between real interest rate differentials short term or long term and real exchange rates this finding appears to conflict with the predictions of most monetary and portfolio balance models of exchange rate determination though the conflict can be substantially reconciled if aggregate disturbances are primarily real in nature i e changes in productivity tastes etc it is true that in many cases the sign of the estimated exchange rate interest rate differential relationship is consistent with the possible predominance of financial market disturbances but the relationship is not stable enough to be statistically significant second although one does find some evidence of a unit root in both real exchange rates and long term but not shortterm real interest differentials these two series do not appear to be linearly cointegrated hence the nonstationarity or near nonstationarity in the two series cannot be attributed to the same factor in section i we briefly describe a class of small scale monetary models of exchange rate determination the importance of this class of models for empirical work derives from its strong predictions about how the exchange rate will move

signalling and the pricing of new issues this paper develops a signalling model with two signals two attributes and a continuum of signal levels and attribute types to explain new issue underpricing both the fraction of the new issue retained by the issuer and its offering price convey to investors the unobservable intrinsic value of the firm and the variance of its cash flows many of the model s comparative statics results are novel empirically testable and consistent with the existing empirical evidence on new issues in particular the degree of underpricing which can be inferred from observable variables is positively related to the firm s post issue share price

optimal production planning with emissions trading emissions trading is a market based mechanism for curbing emissions and it has been implemented in europe north america and several other parts of the world to study its impact on production planning we develop a dynamic production model where a manufacturer produces a single product to satisfy random market demands the manufacturer has access to both a green and a regular production technology of which the former is more costly but yields fewer emissions to comply with the emissions regulations the manufacturer can buy or sell the allowances in each period via forward contracts in an outside market with stochastic trading prices while needing to keep a nonnegative allowance account balance at the end of the planning horizon we first derive several important structural properties of the model and based upon them we characterize the optimal emissions trading and production policies that minimize the manufacturer s expected total discounted cost in particular the optimal emissions trading pol

revenue sharing coordination in reverse logistics a reverse supply chain as a post consumption activity aims at extracting value from products at the end of their life cycle it could be comprised of reusing refurbishing remanufacturing and recycling activities in this paper we revisit the issue of revenue sharing in reverse supply chains to formulate the decision problems of coordinating parties manufacturer and retailer the coordination is formed in a dynamic setting where a feedback relationship exists between the return incentive policy of the retailer and the revenue sharing incentive strategy of the manufacturer to model this process we have adopted the use of a system dynamics sd approach sd is well suited for studying the behavior of complex systems over time and where internal feedbacks and delays exist we first identify pareto optimal solutions for individual players and from environmental perspectives of landfill diversion and carbon offset we then focus on revenue sharing as a widely practiced coordination scheme in reverse supply chains it resembles a leader follower stackelberg strategic decision making game with an equilibrium solution that yields lower performance for environmental criteria in this context we investigate if how a revenue sharing mechanism can be coordinated to achieve a higher environmental performance

accelerating the transition towards sustainability dynamics into supply chain relationship management and governance structures abstract stakeholders and competitive priorities drive profit and non profit organizations towards the implementation of sustainability related measures in their internal operations and in their supply chains planning it is believed by some that investments in sustainability may help them to attain more successful futures by maintaining a healthy balance among economic environmental and social resources dimensions consequently some organizations have begun to integrate these dimensions in recent years researchers and practitioners are also working to accelerate the transition for more equitable sustainable post fossil carbon societies by working with all relevant stakeholders this special volume of journal of cleaner production is focused upon on diverse types of supply chain relationships governance mechanisms and innovations which can foster effective and efficient sustainable supply chain management this volume is comprised of twenty seven articles and a book review fifteen of the articles address the supply chain relationships domain while five focus primarily upon governance five upon innovation and two on relationships and governance however there is a huge potential to further explore the opportunities towards achieving sustainability by implementing proper governance mechanisms and eco innovation strategies research from low income countries dealing with sustainability issues are also urgently needed

the pricing of best efforts new issues this paper offers an explanation for the underpricing of best efforts new issues and demonstrates that best efforts contracts allow issuers to use information from the market if investors obtain information which indicates that a project will not be profitable their demand will be low and the offering will be withdrawn if this information is costly investors will have to be compensated for its purchase through a lower offering price which means that issuers will have to underprice this result is consistent with the empirical observation that underpricing is considerably greater for best efforts than for firm commitment contracts the apparent underpricing of new issues is a long established puzzle which has recently received much attention most of this attention has been on the more common usually larger firm commitment offerings with far less focus on the other type of initial public offering ipo best efforts best efforts offerings account for about 1 3 of all ipos in the u s and they have some interesting characteristics one of these is that a best efforts offering may fail firms using this type of offering know that even after going through a long expensive registration process and revealing considerable amounts of information their offering may be cancelled 2 another interesting feature is that the degree of underpricing seems greater for best efforts than for firm commitment offerings the average initial return the percentage difference between the offering price and the first market price from 1977 1982 was 15 for firm commitment offerings and 48 for best efforts ritter 1987b the possibility that a best efforts offering may fail has typically been considered a disadvantage to the issuer but it may be an advantage the offering fails if the number of shares ordered does not reach the minimum level chosen by the issuer within a certain amount of time this essentially

ipos with buy and sell side information production the dark side of open sales the proposed model by incorporating both 1 banker screening of new issues and 2 costly evaluation by investors is the first to admit endogenous double sided information production it demonstrates a nontrivial link between these two sides the banker wishes to structure a sale conducive to investor research because selling to an uninformed pool would result in his own shirking one application of this paradigm indicates that contrary to the findings of most ipo models larger investor pools are not always better this result resolves the participation restriction puzzle of why bankers do not open sales to all bidders even when doing so would maximize competition and reduce underpricing copyright 2005 oxford university press

including sustainability criteria into inventory models research on sustainability performance has considerably enriched operations management literature in recent years however work with quantitative models is still scarce this paper contributes by revisiting classical inventory methods taking sustainability concerns into account we believe that reducing all aspects of sustainable development to a single objective is not desirable we thus reformulate the classical economic order quantity model as a multiobjective problem we refer to this model as the sustainable order quantity model then a multi echelon extension of the sustainable order quantity model is studied for both models the set of efficient solutions pareto optimal solutions is analytically characterized these results are used to provide some insights about the effectiveness of different regulatory policies to control carbon emissions we also use an interactive procedure that allows the decision maker to quickly identify the best option among these solutions the proposed interactive procedure is a new combination of multi criteria decision analysis techniques

anatomy of initial public offerings of common stock initial public offerings of common stocks ipos are typically underpriced in this paper the author develops and tests the hypothesis that underpricing serves as a form of insurance against legal liability and the associated damages to the reputations of investment bankers the empirical results based on samples of ipos that were brought to the market before and after the securities act of 1933 provide considerable support for the implicit insurance hypothesis specifically gross underpricing and market segmentation between prestigious and fringe investment bankers in originating unseasoned new issues appear to be peculiar to the post 1933 era a number of studies have documented that unseasoned common stocks typically garner large positive abnormal returns during a short period following the initial offering in his recent review of the empirical evidence on the initial returns of common stock offerings smith 36 concluded that the returns from offer price to after market price have exceeded fifteen percent his calculations did not include some of the earlier results obtained by mcdonald and fisher 23 and logue 20 when their samples are combined with those in smith s review the initial returns of unseasoned equity offerings appear even larger over seventeen percent these results imply that underwriters consistently offer the securities at substantial discounts from their values that are set in the after market in other words initial public offerings ipos appear to be underpriced what is even more puzzling is the fact that in some time periods underpricing appears to be systematically larger than in other periods ibbotson and jaffe 15 and ritter 29 have documented that during the postwar era there have been a number of periods in which the initial returns of common stocks have been extremely high ritter for example reported that the average return from the offer price to the first after market price was over forty eight percent for ipos in 1980 and 1981 1 similarly the initial returns of unseasoned issues of common stock brought to the market in 1950 1951 1961 and 1968 were unusually large these periods in which ipos were grossly underpriced are referred to as the hotissue markets why do investment bankers underprice ipos why do issuers

managing carbon footprints in inventory management abstract there is a broad consensus that mankind must reduce carbon emissions to mitigate global warming it is generally accepted that carbon emission trading is one of the most effective market based mechanisms to curb the amount of carbon emissions this paper investigates how firms manage carbon footprints in inventory management under the carbon emission trading mechanism we derive the optimal order quantity and analytically and numerically examine the impacts of carbon trade carbon price and carbon cap on order decisions carbon emissions and total cost we make interesting observations from the numerical examples and provide managerial insights from the analytical results

an industry equilibrium analysis of downstream vertical integration this paper investigates the effect of product substitutability on nash equilibrium distribution structures in a duopoly where each manufacturer distributes its goods through a single exclusive retailer which may be either a franchised outlet or a factory store static linear demand and cost functions are assumed and a number of rules about players expectations of competitors behavior are examined it is found that for most specifications product substitutability does influence the equilibrium distribution structure for low degrees of substitutability each manufacturer will distribute its product through a company store for more highly competitive goods manufacturers will be more likely to use a decentralized distribution system this article was originally published in marketing science volume 2 issue 2 pages 161 191 in 1983

how complex do movie channel contracts need to be the motion picture industry is characterized by a dynamic market environment limited shelf space and product category management and consequently complex channel contracts specifying the split of box office revenue between distributors and exhibitors although such a contracting practice creates a considerable administrative effort and channel conflict it is not clear whether such complexity is necessary for superior channel performance this study investigates this question by analyzing the impact of movie contract structure on movie scheduling and channel member profitability we develop and analyze a game theoretic model using the genetic algorithm approach and a decision support system silverscreener to capture strategic behaviors of channel members in a complex market environment we find that simpler two part tariff or 50 50 split contracts perform as well as the current contracts thus the complexity of the market environment need not be reflected in the complexity of the channel contracts channel contract structure has significant impact on channel member profitability and the exhibitor s movie scheduling behavior in particular our results indicate that the flat rate contract structure represents an attractive alternative to the current practice for distributors

the effects of emission trading on production and inventories in the arrow karlin model abstract the paper deals with the effect of introduction of tradable permits on the production inventory strategy of a firm it is assumed that the firm will minimize its costs the cost function consists of linear holding and convex production costs after introducing emission trading the cost function will contain a linear emission procurement selling cost we will compare the optimal production inventory strategy before tradable permits and thereafter the mathematical investigation is based on the well known dynamic arrow karlin model

signalling by underpricing in the ipo market abstract empirical evidence suggests the existence of hot issue markets for initial public offerings in certain periods and in certain industries new issues are underpriced and rationing occurs this paper develops a model consistent with this observation which assumes the firm itself best knows its prospects in certain circumstances firms with the most favorable prospects find it optimal to signal their type by underpricing their initial issue of shares and investors know that only the best can recoup the cost of this signal from subsequent issues

chain to chain competition on product sustainability this paper studies the game model of two sustainable supply chains under competition in product sustainability derives the equilibrium structures of the two chain system and generates the managerial insights when the supplier and manufacturer within the reverse supply chain are competitive the sustainability degrees demands and profits under three structures of this two chain system are analyzed it is found that although vertical integration is always a nash equilibrium it is pareto optimal only when the competition degree is low on the other hand a more generalized case for the former model is investigated when the supplier and manufacturer are cooperative in bargaining the wholesale price and the effects of bargaining power to the sustainability degrees demands and chain member profits are studied it is further shown that the structure of vertical integration channels is not an equilibrium unless the two sustainable supply chains are independent

competition and cooperation between supply chains in multi objective petroleum green supply chain a game theoretic approach petroleum supply chain is one of the most important and sophisticated managing missions in both developing and developed countries nowadays environmental pollution is another critical factor in designing the petroleum supply chain this importance encourages the governments to minimize the amount of environmental pollution and maximize their obtained profit simultaneously by enacting required legislations on the transportation modes and the refineries considering maximizing the job creation and each stakeholder s profit and minimizing the emission of co2 and other greenhouse gases at the same time is called sustainable petroleum supply chain which has been paid little attention despite its significance therefore the modelling of petroleum supply chain considering sustainability and pricing issues is investigated for the first time in this work and a sustainable competitive petroleum supply chain scpsc model is developed to minimize pollution while maximizing the profits and job creation this problem is a two level model the first level in scpsc is the competition between the supply chains of the government and the private sectors which is modelled by the game theory approach including nash and stackelberg equilibria the optimal price and demand for each supply chain determined in the first level are considered as the second level parameters in the second level the optimal values of the decisions in designing the petroleum supply chain will be obtained by solving mixed integer linear programming milp under the mentioned three objective functions finally the proposed model is applied to a real world case in the national iranian oil company nioc based on the results of the stackelberg equilibrium the government profits increase by 11 12 while that of the private sector decreases by 25 4 and 28 11 increasing in the government profit is due to increased demand provided by government the results show that the whole profit of the petroleum supply chain in nash equilibrium is 9 8 more than that in the stackelberg equilibrium

investing in reduced setups in the eoq model this paper is motivated by the observation that the japanese have devoted much time and energy to decreasing setup costs in their manufacturing processes and that there has been little in the way of a formal framework available to use to think about such efforts the object of this paper is to begin to provide such a framework the framework developed identifies only one aspect of the advantages of reducing setups namely reduced inventory related operating costs the other advantages such as improved quality control flexibility and increased effective capacity are not accounted for in this paper nevertheless substantial reductions in setups may be warranted based solely on the benefits identified in this paper the approach taken here introduces an investment cost associated with changing the current setup level and adds a per unit time amortization of this cost to the other costs identified in the standard eoq model the general problem becomes that of minimizing the sum of a convex and a concave function in two special cases the minimization can be carried out explicitly in one of these cases numerous interpretations of the results are made including comparisons of japanese and american practices for example holding other parameters constant there is a critical sales level such that investment is made in reducing setups if and only if the sales rate is above that level when such investment is made the optimal lot size is independent of the sales rate the paper also addresses the joint selection of the setup cost and the sales rate selection of the sales rate is seen as incorporating explicit production and holding costs into the classical monopolist s pricing problem an explicit solution is obtained for the model postulated

real exchange rates and real interest differentials implications of nonlinear adjustment in real exchange rates abstract this paper investigates the relationship between real exchange rates and real interest differentials while sticky price exchange rate theories predict a relationship empirical evidence on the hypothesized link has proved elusive our conjecture is that the empirical difficulty is due to a failure to recognize nonlinearity in real exchange rate adjustment when we introduce threshold nonlinearity into a traditional model to take account of a transaction cost induced band of inaction for price adjustment only outside the band will the real exchange rate exhibit mean reversion and bear an association with real interest differentials our estimated nonlinear models provide evidence supporting this view

the real exchange rate and real interest differentials the role of the trend cycle decomposition we propose an alternative model and method to reconcile the puzzling feature in the relationship between the real exchange rate and real interest rate differentials our simple two country model with preset prices along with firms misperception about the future exchange rate implies that the real exchange rate follows an arima 0 1 p process this allows us to compute the exact beveridge nelson decomposition which is a model consistent decomposition in accordance with our model unit roots in the real exchange rates are found and statistical inference is partially found to be affirmative regarding the link between the real exchange rate detrended by the beveridge nelson decomposition and corresponding real interest differentials

the costs of going public abstract this paper presents evidence regarding the two quantifiable components of the costs of going public direct expenses and underpricing together these costs average 21 22 of the realized market value of the securities issued for firm commitment offers and 31 87 for best efforts offers for a given size offer the direct expenses are of the same order of magnitude for both contract types but the underpricing is greater for best efforts offers an explanation of why some firms choose to use best efforts offers in spite of their apparent higher total costs is given

the pricing of initial public offerings a dynamic model with information production this paper presents an information theoretic model of ipo pricing in which insiders sell stock in both the ipo and the secondary market have private information about their firm s prospects and outsiders may engage in costly information production about the firm high value firms knowing they are going to pool with low value firms induce outsiders to engage in information production by underpricing which compensates outsiders for the cost of producing information the information is reflected in the secondary market price of equity giving a higher expected stock price for high value firms

competition and cooperation in marketing channel choice theory and application this paper discusses the problem of choosing a vertical marketing channel in a product differentiated duopolistic market firms choose product price and the form of the marketing channel to maximize profits it is shown that integration of the marketing function results in greater price competition and lower prices than does the use of independent marketing middlemen the profitability of reducing price competition by using such middlemen is investigated two hypotheses that integration is negatively associated with the products substitutability and that symmetric channel structures are stable are tested in a preliminary way and supported with survey data from the international semiconductor industry