occupational choice and the process of development this paper models economic development as a process of institutional transformation by focusing on the interplay between agents occupational decisions and the distribution of wealth because of capital market imperfections poor agents choose working for a wage over self employment and wealthy agents become entrepreneurs who monitor workers only with sufficient inequality however will there be employment contracts otherwise there is either subsistence or self employment thus in static equilibrium the occupational structure depends on distribution since the latter is itself endogenous we demonstrate the robustness of this result by extending the model dynamically and studying examples in which initial wealth distributions have long run effects in one case the economy develops either widespread cottage industry self employment or factory production employment contracts depending on the initial distribution in the other example it develops into prosperity or stagnation

the spatial and temporal diffusion of house prices in the uk abstract this paper provides a method for the analysis of the spatial and temporal diffusion of shocks in a dynamic system we use changes in real house prices within the uk economy at the level of regions to illustrate its use adjustment to shocks involves both a region specific and a spatial effect shocks to a dominant region london are propagated contemporaneously and spatially to other regions they in turn impact on other regions with a delay we allow for lagged effects to echo back to the dominant region london in turn is influenced by international developments through its link to new york and other financial centers it is shown that new york house prices have a direct effect on london house prices we analyse the effect of shocks using generalised spatio temporal impulse responses these highlight the diffusion of shocks both over time as with the conventional impulse responses and over space

product differentiation in a bertrand edgeworth duopoly abstract in a bertrand edgeworth model with homogeneous goods an equilibrium in pure strategies does not exist non existence of a pure strategy equilibrium is not solely due to the homogeneous goods assumption in this paper i consider a bertrand edgeworth model with product differentiation and i parametrize when an equilibrium exists journal of economic literatureclassification numbers d4 l1

judo economics in markets with asymmetric firms abstract i study a market entry game with price competition and perfectly substitutable products limiting the initial capacity judo economics is a plausible entry strategy i show that under asymmetry in production cost or product quality capacity limitation can become obsolete

volatility spread and stock market response to earnings announcements abstract using a broad sample of earnings announcements we find a monotonic increase in the spread between call and put implied volatilities as it gets closer to the earnings announcement date the steady build up of volatility spread in the days leading up to the announcement date coupled with the predictive power of cumulative abnormal implied volatility spread on subsequent announcement returns suggests that informed traders are the driving force behind the option market activities prior to earnings announcements such informed trading as proxied by the abnormal implied volatility spread increases rather than decreases the stock market response to earnings announcements after controlling for an array of firm and announcement characteristics this effect is most pronounced when the pre earnings option trading volume is heightened overall our findings lend strong support to the notion that informed options trading immediately before earnings announcements helps alleviate the stock market under reaction to earnings announcements and make it closer to a complete response

prices and price dispersion on the web evidence from the online book industry using data collected between august 1999 and january 2000 covering 399 books we examine pricing by thirty two online united states based bookstores at the aggregate level we find that both advertising and competitive structure had the predicted effects more competition led to lower prices and to lower price dispersion holding competitive structure constant more widely advertised items also had lower prices at the firm level we observe considerable heterogeneity in behavior firms had differentiated or attempted to differentiate on dimensions such as brand price and selection

retail strategies on the web price and non price competition in the online book industry two conflicting predictions have emerged regarding the effect of low cost information on price the first states that all internet retailers will charge the same low price for mass produced goods the second states that internet retailers will differentiate to avoid intense price competition using data collected in april 1999 on the prices of 107 books in thirteen online and two physical bookstores we find similar average prices online and in physical stores and substantial price dispersion online analysis of product differentiation yields no clear results the substantial premium charged by amazon provides indirect evidence of product differentiation

facilitating practices the effects of advance notice and best price policies even if firms in a market choose discount prices noncooperatively the use of most favored customer and meet or release contracts enables those firms to adopt quantity choice strategies consequently there can be a range of list prices that are impervious to unilateral nonselective discounts but this range does not include prices above the level determined in a cournot equilibrium the practice of advance public notification of list price increases can facilitate the establishment of such supracompetitive list prices as was argued in the recent ftc ethyl case the possibility of offering discounts selectively results in a much more competitive situation

long run competition in capacity short run competition in price and the cournot model in this article we investigate the nature of equilibrium in markets in which firms choose the scale of operation before they make pricing decisions we analyze a duopoly model in which firms choose their capacities before engaging in bertrand like price competition we demonstrate that the cournot outcome is unlikely to emerge in such markets and that the equilibrium tends to be more competitive than the cournot model would predict in addition our results indicate a tendency toward asymmetric firm sizes and price dispersion that results from the mixed strategies firms use in equilibrium

endogenous insecurity and economic development abstract we explore the implications of endogenous credit market imperfections for the endogenous relationship between investment insecurity and the process of economic development in the initial stages of development the fraction of agents engaged in nonproductive diversionary activities e g rent seeking grows as the opportunities to gain from diversionary activities expand in later stages however diversion falls as capital market imperfections are overcome and productive activities become more secure and more profitable we detail the forces that determine whether the insecurity generated by an economy s early development will choke off the growth process we also compare the cost effectiveness of alternative policies designed to prevent diversion

the convergence of regional house prices in the uk the ripple effect hypothesis implies a long run convergence of regional uk house prices however despite many authors believing in the existence of such an underlying constancy statistical evidence has yet to be presented supporting this implication in this paper an alternative approach is proposed to analyse regional house price ratios in contrast to the findings of previous studies application of this new procedure results in the detection of widespread convergence of house prices in a number of regions of the uk the results suggest that the failure of previous analyses to uncover convergence is due to an underlying asymmetry in the adjustment process being ignored interestingly the form of asymmetry detected varies between regions while regions in the south east experience faster convergence following downswings in prices other regions exhibit more rapid convergence following increases in prices

entrepreneurship developing countries and development economics new approaches and insights this paper provides an introduction to this special issue of small business economics dealing with the long postponed integration of entrepreneurship into the discipline of development economics and casting a formal light on the role of entrepreneurship in developing countries the paper departs from the premise that with more than a billion people living in absolute poverty it is of great practical importance to understand if and when entrepreneurship is a binding constraint on economic development and catching up in developing countries this in turn requires at least a deeper theoretical modeling of the entrepreneur in development economics this special edition contains a number of contributions emanating from the unu wider project on promoting entrepreneurial capacity which integrates the disciplines of entrepreneurship and development economics these contributions model and explore the role of the entrepreneur in key areas of concern for development economics such as structural change and economic growth income and wealth inequalities welfare poverty traps and market failures this introduction discusses and contextualizes these various contributions and their implications for further theoretical and empirical work

reward structures and the allocation of talent as relative rewards that different professions receive are a key factor in the allocation of talent what determines the reward structure of a society is an important question this paper develops an equilibrium model of the allocation of talent between productive and unproductive activities such as rent seeking the existence of rent seeking creates a negative externality on productive agents and implies that relative rewards are endogenously determined the same externality can also lead to the existence of multiple equilibria each with different reward structures in a dynamic setting allocations of past generations as well as expectations of future allocations influence current rewards and the society may get trapped in a rent seeking steady state equilibrium the paper also discusses how the non pecuniary reward structure can be influenced by equilibrium selection and a historical example that suggests the presence of a causal link from the allocation of talent to non pecuniary rewards

endogenous timing in duopoly games stackelberg or cournot equilibria abstract simultaneous versus sequential play is studied in an extended game in a preplay stage players decide whether to select actions in the basic game at the first opportunity or to wait until observing their rivals first period actions in one extended game players first decide when to select actions without committing to actions in the basic game the equilibrium has a simultaneous play subgame unless payoffs in a sequential play subgame pareto dominate those payoffs in another extended game deciding to select at the first turn requires committing to an action both sequential play outcomes are the equilibria only in undominated strategies

predisclosure information firm capitalization and security price behavior around earnings announcements several studies on the relationship between earnings reports and security price behavior provide evidence suggesting that a significant portion of the information revealed through earnings reports is reflected in security prices prior to the report month e g ball and brown 1968 and brown and kennelly 1972 this has been attributed at least partly to the existence of other more timely sources of information which allow market agents to forecast earnings prior to their release the evidence above reflects an average finding across all firms one question of interest is whether there are significant systematic crosssectional differences in the security price reactions to earnings announcements of firms which are associated with specific firm characteristics that lead to differential amounts of predisclosure information this study focuses on firm size capitalization as one such characteristic a firm

commitment robust equilibria and endogenous timing abstract this paper investigates which equilibria of a game are still viable when players have the opportunity to commit themselves to that end we study a model of endogenous timing in which players face the trade off between committing early and moving late it is shown that mixed resp pure equilibria of the original game are subgame perfect resp persistent in the timing game only when no player has an incentive to move first consequently mixed equilibria are viable only if no player has an incentive to move first one needs strong evolutionary solution concepts to draw that conclusion for pure equilibria journal of economic literature classification number c72

price setting firms and the oligopolistic foundations of perfect competition theory fails to explain how prices are formed these observations lead us to study the theory of monopolistically competitive markets in which firms choose prices rather than quantities and then to ask whether such large markets approximate perfect competition price setting oligopolies can provide economists with a price formation story prices arise from the profit maximizing decisions of individual firms thus we are able to obtain a theory in which prices are picked by those economic actors who do so in reality although this is a matter of taste we believe that the use of prices instead of quantities as the strategic variables of firms can yield a better simple descriptive model of oligopoly that captures the essential features of many markets this motivation then leads to the question of which price setting model should be used for the study of the oligopolistic foundations of perfect competition in the original model formulated by joseph bertrand 1883 firms have constant marginal and average costs so that any one firm can supply the whole market this assumption leads to the conclusion that the presence of two or more price setting firms suffices to yield perfectly competitive outcomes be

housing bubble contagion from city centre to suburbs most previous studies have reported that housing prices diffuse from the city centre to surrounding areas however these studies have overlooked the fact that housing prices comprise fundamental and bubble prices we investigated whether bubble prices also diffuse from the city centre to suburbs and whether fundamental or bubble prices promote housing price diffusion we focused on the movement of housing bubbles from the city centre to the suburbs using data for the taipei metropolitan area from 1973 to 2014 for empirical analysis our state space model estimates statistically significant fundamental and bubble prices in taipei city city centre and new taipei city suburbs engle granger cointegration test results reveal that the housing and bubble prices of the two cities are cointegrated however fundamental prices are not f statistics reveal that the granger causality of bubble prices the central city granger causing changes in the suburbs is more significant and powerful than that of the fun

bubbles in us regional house prices evidence from house price income ratios at the state level we investigate the presence of bubbles in the us house price income ratio at the state level by applying the recent time series based econometric test to data from january 1975 to december 2014 we

the rise in house prices in china bubbles or fundamentals the dramatic rise of house prices in many cities of china has brought huge attention from both the governmental and academic circles there is a huge debate on whether the increasing house prices are driven by market fundamentals or just by speculation like levin and wright 1997a 1997b we decompose house prices in china into fundamental and non fundamental components we also consider potential nonlinear feedback from the historical growth rate of house prices on the current house prices and propose a semiparametric approach to estimate the speculative components in the model we demonstrate that the non fundamental part contributes a relatively small proportion of the rise of house prices in china su and jin thank the nsfc for research support under grant no 70501001 citation hu jianying liangjun su sainan jin and wanjun jiang 2006 the rise in house prices in china bubbles or fundamentals economics bulletin vol 3 no 7 pp 1 8 submitted march 20 2006 accepted march 28 2006 url http www economicsbulletin com 2006 volume3 eb 06c20006a pdf

price dispersion in the lab and on the internet theory and evidence price dispersion is ubiquitous in settings that closely approximate textbook bertrand competition we show that only a little bounded rationality among sellers is needed to rationalize such dispersion a variety of statistical tests based on datasets from two independent laboratory experiments and structural estimates of the parameters of our models suggest that bounded rationality based theories of price dispersion organize the data remarkably well evidence is also presented to suggest that the models are consistent with data from a leading internet price comparison site

speculative bubbles in u k house prices some new evidence in this article we test the view widely held among both academics and practitioners that speculative bubbles have characterized the time series behavior of u k house prices in recent times we motivate our empirical analysis using a stylized overlapping generations model which generates a housing demand function of the form assumed by a large literature illustrating how rational bubbles may arise as a solution to the house price determination equation employing two recently developed econometric techniques specifically designed to test for rational bubbles we then provide empirical evidence for the existence of bubbles in u k house prices over the sample period 1983 2002 a widely held view among academics and practitioners is that the time series behavior of house prices of several major industrialized countries may have been characterized by explosive bubbles which are not present in the underlying fundamentals and which therefore may drive an explosive wedge between house prices and their fundamental determinants in particular with regard to the united kingdom a large empirical literature has studied the determinants of the two booms experienced by house prices in the early 1970s and late 1980s providing some tentative evidence in support of the view that speculation on expected future house prices might have been an important force driving actual house prices see inter alia hendry 1984 muellbauer and murphy 1997 renaud 1997 teraisvirta 1998 more recently concerns of an ongoing house price bubble in the united kingdom have been repeatedly raised by the press and policymakers these concerns are well summarized in the following quote it will be different this time those are the most dangerous words in investment and in economic policy the u k is yet again in an unbalanced expansion behind it lies explosive household

historical legacies a model linking africa s past to its current underdevelopment abstract recent studies have found evidence linking africa s current under development to colonial rule and the slave trade given that these events ended long ago why do they continue to matter today i develop a model exhibiting path dependence which provides one explanation for why these past events may have lasting impacts the model has multiple equilibria one equilibrium with secure property rights and a high level of production and others with insecure property rights and low levels of production i show that external extraction when severe enough causes a society initially in the high production equilibrium to move to a low production equilibrium because of the stability of low production equilibria the society remains trapped in this suboptimal equilibrium even after the period of external extraction ends the model provides one explanation why africa s past events continue to matter today

protection of property rights and growth as political equilibria abstract this paper presents a survey of the literature on property rights and economic growth different theoretical mechanisms that relate property rights to economic development are discussed lack of protection of property rights can result in slow economic growth through different channels expropriation of private wealth corruption of civil servants excessive taxation and barriers to adoption of new technologies the origins of property rights are also considered different theories are illustrated but more attention is paid to the social conflict view and its success and limitations the second part of the paper illustrates relevant empirical works on property rights and growth

rationing rules and bertrand edgeworth equilibria in large markets abstract in a market with concave downward sloping demand and symmetric firms which compete in prices with constant marginal costs and capacity limits it is shown that the supports of the symmetric mixed strategy nash equilibria converge to the unique competitive price provided that unsatisfied demand is allocated according to the surplus maximizing rationing rule

option listing and the stock price response to earnings announcements abstract we examine the effect of option listing on the immediate stock price response to earnings announcements contrary to prior studies using earlier data we find firms initiating option trading after 1986 fail to exhibit a significant decline in earnings response we then examine 420 firms initiating option trading during 1973 1993 in a series of tests controlling for market wide effects and changing firm size we find some evidence that option listing may actually increase the stock price response to earnings but no evidence listing reduces the response both longitudinal and cross sectional tests produce similar results

seasonality and cointegration of regional house prices in the uk the data generation process underlying regional house prices in the uk is investigated using new statistical tests it is found that causal flows tend to be northwards the south east rather than greater london acts as an exogenous price determinator of the other regions in the south the midland regions have a great influence on prices in the north and flows through the east midlands are characterised by bi directional causality these results are largely independent of assumptions made about the data generation process and tests of these assumptions have low power in any case there are also similarities between this causality and migration patterns particularly in the south of england

spatial dynamics of the housing market an interurban perspective a major unproven hypothesis in housing economics is that regional ripple effects are caused by household migration between regions this paper examines household migration and price ripples at the level of local housing markets driven partly by the fact that such migration linkages are likely to be more pronounced between local rather than regional housing markets following a review of regional housing market studies several hypotheses linking the existence of lead lag relationships and cointegration with the scale of migratory linkages between local housing market areas lhmas are proposed using private housing transactions data for strathclyde a sub region of scotland the paper identifies two clusters of lhmas that differ in terms of their migratory linkages with glasgow the hypothesised leading housing market of the sub region tests for lead lag relationships and cointegration confirm the link between migration and house price changes

speculative bubble spillovers across regional housing markets in this paper we determine whether speculative bubbles in one region in the united states can lead bubbles to form in others we first apply a regime switching model to determine whether speculative bubbles existed in the u s regional residential real estate markets our findings suggest that the housing markets in five of the nine census divisions investigated were characterized by speculative bubbles we then examine the extent to which bubbles spill over between neighboring and more distant regions finding that the transmission of speculative bubbles and nonfundamentals between regions is multidirectional and does not depend on contiguity or distance

approximate bertrand equilibria in a replicated industry this paper considers the existence and properties of approximate bertrand equilibria in a replicated industry price setting firms produce a homogeneous product with weakly convex costs the main results are that a given e 0 an e equilibrium exists if the industry is large enough b if the e is small enough and the industry large enough any e equilibrium is approximately competitive these results depend on how contingent demand is specified

are housing bubbles contagious a case study of las vegas and los angeles home prices this paper asks whether speculative house price pressure in an economic center can spill into related housing markets in other words are bubbles contagious i develop a theoretical model that allows for speculative price appreciation to spread from one market to another i estimate an error correction model using quarterly housing data for las vegas and los angeles and fundamental market variables from 1978 quarter 2 through 2008 quarter 1 las vegas prices show significant persistence and adjust slowly to disequilibrium contagious price and income growth from the los angeles market sustained by naive expectations contributed to the bubble that formed in las vegas

are there rational bubbles in foreign exchange markets evidence from an alternative test abstract this paper employs the kalman filter technique to estimate and test for stochastic bubbles for exchange rates between the us dollar and the british pound the japanese yen and the deutsche mark i find no significant evidence of bubbles my results are in sharp contrast with previous findings on exchange rate bubble testing and cast some doubt on those claims that the dollar exchange rates were driven by speculative bubbles in the post bretton woods period

natural resources rent seeking and welfare abstract a new and very simple mechanism to explain why natural resource abundance may lower income and welfare is developed in a model with rent seeking a greater amount of natural resources increases the number of entrepreneurs engaged in rent seeking and reduces the number of entrepreneurs running productive firms with a demand externality it is shown that the drop in income as a result of this is higher than the increase in income from the natural resource more natural resources thus lead to lower welfare

the rise and decline of nations economic growth stagflation and social rigidities the years since world war ii have seen rapid shifts in the relative positions of different countries and regions leading political economist mancur olson offers a new and compelling theory to explain these shifts in fortune and then tests his theory against evidence from many periods of history and many parts of the world

judo economics reconsidered capacity limitation entry and collusion abstract the capacity investment by a new firm into an established market is explored in a repeated price game if the entrant expects collusion to prevail upon entry it may not practice judo economics but instead choose to install enough capacity to serve the entire market this occurs when collusion involves optimal punishment paths if instead collusion is based upon the static nash equilibrium punishment and the incumbent has excess capacity and the entrant is at a cost disadvantage the entrant will strategically limit its capacity so as to restrain the incumbent s price response to entry

the existence of equilibrium in discontinuous economic games i theory the article presents information about the existence of equilibrium in discontinuous economic games in this paper and its sequel presents study the existence of nash equilibrium in games where agents payoff functions are discontinuous the enquiry is motivated by a number of recent studies that have uncovered serious existence problems in seemingly innocuous economic games in the sequel to this paper authors have explained the utility function in the economic games referred to earlier are neither continuous nor quasi concave however they demonstrate that the payoff functions in mildly modified versions of these constructs exhibit two weaker forms of continuity which together with the requirement of quasi concavity suffice for the existence of an equilibrium from this one may conclude that at least in the modified versions of these models discontinuities in the payoff functions are not the real source of the problem rather it is the failure of the payoff functions to the quasi concave which is responsible for the non existence of equilibrium these observations bear on the existence of nash equilibrium in pure strategies

a new approach to estimating value income ratios with income growth and time varying yields abstract value income ratios such as dividend yields in finance and price rent ratios in housing and real estate markets impact society in a variety of ways this paper proposes a new type of the present value model that features income growth with time varying yields it offers a new risk perspective which may alleviate timid investor behavior in market downturns while cooling down the market in seemingly booming times a binding relationship the value income ratio adjusted by yields of the asset and growth in income is revealed this has notable implications for empirical research which examines value income ratios time and again incorrectly perceived market behavior distorts the formation of investor behavior and vice versa which has serious consequences to the functioning of the market and beyond

on the strategic importance of prices versus quantities in this article i investigate three single shot models of differentiated products oligopoly in each model firms choose both output and price the demand cost and spillover demand specifications are quite general and there are three main results first with simultaneous choice there is no pure strategy noncooperative equilibrium second with output chosen first and announced to all firms before the choice of price equilibrium sometimes exists and when it does it is the same as in a quantity only model third with price chosen and announced first equilibrium always exists and is the same as in a price only model

monopolistic competition and the effects of aggregate demand how important is monopolistic competition to an understanding of the effects of aggregate demand on output we ask the question at three levels can monopolistic competition by itself explain why aggregate demand movements affect output can it together with other imperfections generate effects of aggregate demand in a way that perfect competition cannot if so can it give an accurate account of the response of the economy to aggregate demand movements the answers are no yes and yes

social norms savings behavior and growth we argue that many goods and decisions are not allocated or made through markets we interpret an agent s status as a ranking device that determines how well he or she fares in the nonmarket sector the existence of a nonmarket sector can endogenously generate a concern for relative position in for example the income distribution so that higher income implies higher status moreover it can naturally yield multiple equilibria it is thus possible to explain differences in growth rates across countries without recourse to differences in underlying preferences technologies or endowments different social organizations lead to different reduced form preferences which lead to different growth rates

list pricing and discounting in a bertrand edgeworth duopoly list or retail pricing is a widely used trading institution where firms announce a price that may be discounted at a later stage competition authorities view list pricing and discounting as a procompetitive practice we modify the standard bertrand edgeworth duopoly model to include list pricing and a subsequent discounting stage both firms first simultaneously choose a maximum list price and then decide whether to discount or not in a subsequent stage we show that list pricing works as a credible commitment device that induces a pure strategy outcome this is true for a general class of rationing rules further unlike the dominant firm interpretation of a price leader the low capacity firm may have incentives to commit to a low price and in this sense assume the role of a leader

iterated elimination of dominated strategies in a bertrand edgeworth model we consider a bertrand edgeworth model of price competition firms have identical and constant marginal costs and finite exogeneous capacities firms choose prices our interest is in the set of those prices which are left over after the iterated elimination of dominated strategies we show that in two circumstances this set will be close to the set containing only the marketclearing walrasian price i if any n 1 out of n firms assumed to be in the market have sufficient capacity to cover demand at marginal costs ii if any given total capacity is owned by a very large number of very small firms

property rights corruption and the allocation of talent a general equilibrium approach we consider an economy where contracts are necessary to encourage investments contract enforcement requires that a fraction of the agents work in the public sector and do not accept bribes we find that 1 it may be optimal to allow some corruption and not enforce property rights fully 2 less developed economies may choose lower levels of property right enforcement and more corruption 3 there may exist a free lunch such that over a certain range it is possible simultaneously to reduce corruption increase investment and achieve a better allocation of talent bureaucratic corruption is widespread in many societies casual empiricism and case studies suggest that corruption distorts the allocation of resources and discourages investment and the creation of new firms e g mydral 1968 desoto 1989 cross country studies also find that countries with high corruption or long bureaucratic delays suffer lower growth e g mauro 1996 sartre 1997 it is therefore tempting to conclude that government policies and bureaucratic corruption are at least partly responsible for the lack of development or slow growth of many economies e g shleifer and vishny 1993 nevertheless governments and bureaucracies do not exist only to seek rents they perform a number of useful functions including provision of public goods correction of market failures and redistribution without understanding why the state exists it is difficult to assess why corruption arises what its consequences are and whether and how it should be prevented in this paper we analyse how the employees of the state bureaucrats can misuse their power to enforce property rights the protection of property rights is commonly viewed as one of the most important roles of the state by political philosophers as diverse as david hume karl marx and robert nozick while a number of social scientists including north and thomas 1973 and rosenberg and bridzell 1989 emphasise the importance of secure property rights in the development of western societies for the state to have a role in enforcing property rights some contractual problems must exist between private parties in our economy these contractual problems are between entrepreneurs in particular production requires two agents and one of the entrepreneurs needs to undertake an investment but the returns accrue to the other one this can be thought as a partnership with the first agent as an upstream supplier providing an input of variable

relationship between differential amounts of prior information and security return variability this study investigates the relation between stock return variability at annual earnings announcements and the amount of prior information available about a firm which is measured by both the number of security analysts annual earnings forecasts and firm size market value of common equity we find that each of these information measures is inversely related to return variability at annual earnings announcements after controlling for differences in the other this result suggests that number of security analysts earnings forecasts and firm size measure dimensions of the amount of prior information available about a firm that are not subsumed by one another the study also provides evidence using empirically generated distributions that test statistics derived from squared standardized market model prediction errors have larger means and variances for firms with few analysts forecasts or for small firms than for firms with many analysts forecasts or for large firms this result implies that the probability of obtaining large values of those test statistics is greater for firms with few analysts forecasts or for small firms therefore the probability of concluding there is increased return variability at annual earnings announcements is greater for those firms consistent with marais 1984

intra industry information transfers associated with earnings releases abstract the impact that a firm s earnings releases have on the stock prices of other firms in its industry is examined for an identifiable sub set of firms the results are consistent with a significant information transfer occurring between the earnings release firm and the other firms in its industry this subset is identified by examining the impact of the release on the stock price of the announcing firm the magnitude of this impact is more significant for a sample of firms which have a larger percentage of their revenues in the same line of business as the earnings release firm vis a vis a sample with a lower percentage of their revenues from the same line of business alternative interpretations of the empirical results are also discussed the research findings have implications for information content and market efficiency research and for research on policy issues associated with disclosure regulation

earnings announcements and competing information abstract we investigate whether competing information primarily analyst reports reduces the usefulness of earnings announcements inconsistent with the view that information in analyst reports substitutes for earnings announcements we find a positive relation between absolute abnormal returns to the two types of disclosures this positive relation also characterizes subsequent period analyst reports relative to current period earnings announcements we also find that aggregate absolute reactions to both types of disclosures increased over 1986 1995 as a whole these results provide little support for the view that the informativeness of earnings announcements is eroded by competing information in the form of analyst reports

synchronisation and commonalities in metropolitan housing market cycles this paper examines the degree of commonalities present in the cyclical behaviour of the eight largest metropolitan housing markets in australia using two techniques originally proposed in the business cycle literature we firstly consider the degree of synchronisation present and secondly decompose the series into their permanent and cyclical components both empirical approaches reveal similar results sydney and melbourne are closely related to each other and are relatively segmented from the smaller metropolitan areas in contrast there is substantial evidence of commonalities in the cyclical behaviour of the remaining cities especially those on the eastern and southern coasts of australia

bertrand edgeworth oligopoly in large markets the relation between perfectly competitive and monopolistically competitive equilibria is analysed for a bertrand edgeworth model of a single market in which capacity constrained firms choose prices as strategies the market always has a nash equilibrium in pure or mixed strategies as the number of firms increases the corresponding equilibria converge in distribution to a perfectly competitive price this result provides a justification for perfect competition that is based on an explicit account of price formation however monopoly prices persist with a positive but vanishing probability regularity or well defined inverse demand functions are not required

capitalism and socialism a review of kornai s dynamism rivalry and the surplus economy understanding the nature of capitalism has been a central theme of economics the collapse of the eastern bloc and the global financial crisis spurred the reemergence of the political economy as a new frontier and the revival of interest in the nature of capitalism janos kornai s book dynamism rivalry and the surplus economy two essays on the nature of capitalism fills an important intellectual gap in understanding the dynamic nature of capitalism by comparing it with its mirror image socialism to further develop the themes contained in the book serious challenges are posed theoretically and empirically as well as in subjects such as hybrid capitalism