optimal pricing shipment and payment policy for an integrated supplier buyer inventory model with two part trade credit abstract in this article we develop an integrated supplier buyer inventory model with the assumption that the market demand is sensitive to the retail price and the supplier adopts a trade credit policy the trade credit policy discussed in this paper is a two part strategy cash discount and delayed payment that is if the buyer pays within m1 the buyer receives a cash discount otherwise the full purchasing price must be paid before m2 where m 2 m 1 0 the objective of this research is to determine the optimal pricing ordering shipping and payment policy to maximize the joint expected total profit per unit time an iterative algorithm is established to obtain the optimal strategy furthermore numerical examples and sensitivity analysis are presented to illustrate the results of the proposed model and to draw 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

channel coordination and quantity discounts this paper presents a model for analyzing the impact of joint decision policies on channel coordination in a system consisting of a supplier and a group of homogeneous buyers the joint decision policy characterized by the unit selling price and the order quantity is coordinated through quantity discounts and franchise fees both the annual demand rate and the operating cost including the purchase ordering and inventory holding costs depend on the joint decision policy employed this paper contributes by integrating work addressing quantity discounts on inventory and ordering policies and work focusing on the control mechanism provided by quantity discounts in channel coordination it is shown that the optimal all unit quantity discount policy is equivalent to the optimal incremental quantity discount policy in achieving channel coordination furthermore it is shown that quantity discounts alone are not sufficient to guarantee joint profit maximization the analyses of the general models are illustrated by specific analytical results obtained for a given demand function

banking efficiency and competition in low income countries the case of uganda there is a concern that the state dominated inefficient and fragile banking systems in many low income countries especially sub saharan africa are a major hindrance to economic growth in this context this article systematically analyses the impact of the far reaching banking sector reforms undertaken in uganda on banking sector competition and efficiency using models of banking competition and efficiency that have been predominantly estimated in industrial countries we find that the level of competition has significantly increased and has been associated with a rise in efficiency of the sector moreover on average larger banks and foreign owned banks are more efficient than others while smaller banks have fallen back in efficiency with the increase in competitive pressures

reply on comments on a quantity discount pricing model to increase vendor profits professor joglekar is to be thanked for his generally insightful comments 1988 concerning my paper monahan monahan j p 1984 a quantity discount pricing model to increase vendor points management sci 306 june 720 726 he has in my view correctly assessed the limitations of two important production assumptions i made assumptions which need to be rethought in any quantity discount pricing models of the future yet although i find myself in general agreement with joglekar s comments i wish to clarify some points concerning the model and its potential applicability

bouncing out of the banking system an empirical analysis of involuntary bank account closures using a new database we document the determinants of involuntary consumer bank account closures during 2001 2005 approximately 30 million debit accounts were involuntarily closed for excessive overdrafting we focus on multiple factors to explain this phenomenon household economics and financial decision making ability social capital bank policies and the alternative financial services sector involuntary closures are more frequent in us counties with a larger fraction of single mothers lower education levels lower wealth and higher unemployment closures are higher in communities with high property crime rates and low electoral participation bank policies have an independent relation to closures with counties having more competitive banking markets and more multi market banks experiencing higher closure rates bank structure also seems to affect the speed at which banks adjust their policies to changes in household income finally using both national data and a state level shift in regulation we find evidence that access to payday lending leads to higher rates of involuntary account closure

eliciting welfare preferences from behavioural data sets an individual displays various preference orderings in different payoff irrelevant circumstances it is assumed that the variation in the observed preference orderings is the outcome of some cognitive process that distorts the underlying preferences of the individual we introduce a framework for eliciting the individual s underlying preferences in such cases and then demonstrate it for two cognitive processes satisficing and small assessment errors

banking deregulation allocational consequences of relaxing entry barriers abstract we present an equilibrium analysis to predict the long run allocational consequences and risk implications of banking deregulation loan demand and deposit supply functions are derived from primitive assumptions about the preferences of individuals and banks are viewed as differentiated competitors in a spatial context we find that a relaxation of entry barriers into banking improves the welfare of borrowers and savers at the expense of bank stockholders equilibrium loan interest rates fall and equilibrium deposit interest rates rise as banking becomes more competitive despite this the equilibrium debt equity ratios of banks increase as entry barriers are relaxed we also examine the implications of capital standards and find that an increase in the minimum capital requirement benefits borrowers but hurts depositors

optimal strategy for an integrated system with variable production rate when the freight rate and trade credit are both linked to the order quantity abstract this paper presents an integrated inventory model with variable production rate and price sensitive demand rate the buyer s purchases trade credit linked to the order quantity offered by the supplier in addition the buyer pays the freight charge according to a weight schedule this paper attempts to offer a best policy that aims at maximizing the joint total profit while the trade credit and freight rate are simultaneously linked to the order quantity the same policy also incorporates considerations on the optimal retail price order quantity and delivery decision we provide possible solutions for the buyer and the supplier to collaboratively agree on inventory control warehouse management transportation logistics delivery and billing our study demonstrates that significant profit increase for the entire supply chain can be achieved by linking both trade credit policy and freight rate policy to order quantities an algorithm is furnished to determine the optimal solution in addition numerical examples and sensitivity analysis are presented to illustrate the theoretical results

a classification of literature on determining the lot size under quantity discounts abstract determining a lot size in the presence of either all units or incremental discounts has represented one of major interests of materials managers it is a common practice that the suppliers offer quantity discount to entice the buyers to purchase more and to achieve economies of scale for transportation and processing costs this paper will classify the literature on lot sizing determination under several types of discount schemes and discuss some of the significant literature in this area over two decades also some future research areas have been identified

integrated pricing and lot sizing decision in a two echelon supply chain with a finite production rate abstract in this paper we consider a supply chain consisting of a supplier and a retailer selling the product manufactured by the supplier in a market in which the demand for the product is decreasing in the price set by the retailer previous research on coordinating the supply chain with price sensitive demand often assumes that either the supplier purchases the product or the supplier has an infinitely large production rate we consider explicitly the supplier s finite production rate in the pricing and lot sizing decision which causes the problem much more challenging we first investigate the optimization problem in the decentralized scenario to find the optimal order quantity and selling price for the retailer as well as the optimal wholesale price and lot size multiplier for the supplier we then solve the joint optimization problem in the centralized supply chain to find the optimal order quantity the selling price and the optimal lot size multiplier we provide two sequential algorithms to solve the joint optimization problem computational experiments show that the algorithms are effective all 448 tested problems are solved optimally and efficient it only takes a few iterations to converge for each tested problem the supply chain coordination mechanism is then designed through an all unit quantity discount policy and a franchise fee

deregulation market power and risk behaviour in spanish banks abstract this paper provides empirical evidence on the effects of regulatory changes in the market power of spanish banks it also analyses the response of banks in terms of risk taking behaviour as a result of a reduction in economic profits we find that liberalisation measures have increased competition and eroded banks market power we observe that banks with lower charter values tend to have lower equity assets ratios lower solvency and to experience higher credit risk the last evidence is new in the literature and calls for strengthening regulatory concerns about credit risk management by banks in situations of increased competition

information reliability and a theory of financial intermediation this paper is an analysis of when it will be beneficial for agents engaged in the production of information to form coalitions the model is cast in a financial market framework thus leading to an identification of conditions sufficient for the existence of financial intermediaries intermediation is shown to improve welfare if informational asymmetries are present and the information generated to rectify these asymmetries is potentially unreliable the usual appeal to transactions costs to explain intermediation is not needed

an incentive approach to banking regulation we examine the optimal design of a risk adjusted deposit insurance scheme when the regulator has less information than the bank about the inherent risk of the bank s assets adverse selection and when the regulator is unable to monitor the extent to which bank resources are being directed away from normal operations toward activities that lower asset quality moral hazard under a socially optimal insurance scheme 1 asset quality is below the first best level 2 higher quality banks have larger asset bases and face lower capital adequacy requirements than lower quality banks and 3 the probability of failure is equated across banks perihaps t he most troubling aspect of the current deposit insurance system is the distortions caused by the pervasive use of an insurance premium that is independent of risk the undesirable incentives that result when such a system is employed in a world with imperfect information have long been recognized in the literature of particular concern is the incentive banks have to increase the risk of their portfolio in order to maximize the value of the deposit insurance provided in some respects this problem is similar to the incentives generated by corporate debt however the solution to this problem may be different in a banking context because the creditors include the deposit insurer who has the power to regulate the banks conceivably regulation may be able to mitigate the informational problem at hand in this paper we examine some of the tradeoffs that arise in the design of a regulatory system for banks

an approach for developing an optimal discount pricing policy this paper addresses the problem of why and how a seller should develop a discount pricing structure even if such a pricing structure does not alter ultimate demand the situation modeled is most appropriate where the seller s product does not represent a major component of the buyer s final product where the demand for the product is derived or where the price is only one of many factors considered in making a purchase decision a model of buyer reaction to any given pricing scheme is developed to show that there exists a unified pricing policy which motivates the buyer to increase its ordering quantity per order thereby reducing the joint buyer and seller ordering and holding costs as a result the seller is able to reduce its costs while leaving the buyer no worse off and often better off the model is extended to handle variable ordering and shipping costs and situations where the seller faces numerous groups of buyers each having different ordering policies finally a case study is presented explicitly showing how the proposed pricing policy can be applied to the situation of a large seller selling to a number of different buyer groups

a bargaining model with asymmetric information for a single supplier single buyer problem abstract banerjee s joint economic lot size jels model represents one approach to minimizing the joint total relevant cost of a buyer and a supplier by using a joint optimal order and production policy the implementation of a jointly optimal policy requires coordination and cooperation should the buyer have the market power to implement his own optimal policy as that one to be used in the exchange process no incentive exists for him to choose a joint optimal policy a joint policy can therefore only be the result of a bargaining process between the parties involved the supplier may make some sort of concession such as a price discount or a side payment in order to influence the buyer s order policy a critical assumption made throughout in supply chain literature is that the supplier has complete knowledge about the buyer s cost structure clearly this assumption will seldom be fulfilled in practice the research presented in this paper provides a bargaining model with asymmetric information about the buyer s cost structure assuming that the buyer has the power to impose its individual optimal policy

a quantity discount approach to supply chain coordination abstract quantity discounts provide a practical foundation for inventory coordination in supply chains however typical supply chain participants may encounter difficulties in implementing the coordination policy simply because 1 specified lot size adjustments may deviate from the economic lot sizes and 2 the buying firm may face amplified overstocking risks related to increased order quantities the main objective of this study is to develop a quantity discount model that resolves the practical challenges associated with implementing quantity discount policies for supply chain coordination between a supplier and a buyer the proposed buyer s risk adjustment b ra model allows the supplier to offer discounts that capitalize on the original economic lot sizes and share the buyer s risk of temporary overstocking under uncertain demand the analytical results suggest that the proposed b ra discount approach is a feasible alternative for supply chain coordination under uncertain demand conditions

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

note comments on a quantity discount pricing model to increase vendor profits monahan monahan j p 1984 a quantity discount pricing model to increase vendor profits management sci june 720 726 adapted the quantity discount model of inventory theory to the problem of determining an optimal quantity discount schedule from a vendor s point of view and opened up an important direction of research however his one item one customer one vendor model is based on several implicit assumptions that must be judged unreasonable monahan must account for the vendor s inventory carrying charges and redefine his variable s2 it is shown that a rational vendor s manufacturing frequency would not be identical to the buyer s ordering frequency if the vendor s manufacturing setup costs are substantially larger than the buyer s ordering costs a numerical example presented in this note also questions the practical usefulness of monahan s model even after its theoretical inaccuracies axe corrected monahan s model may explain discounts that are a fraction of 1 of the price of an item but it fails to explain commonly observed magnitudes of quantity discounts such as 10 of the unit price

discount pricing decisions in distribution channels with price sensitive demand abstract in this paper we evaluate the effectiveness of quantity discounts and volume discounts as coordination mechanisms in distribution channels with demand that is price sensitive we consider a single vendor single retailer distribution channel demand for the product arises only at the retailer the demand faced by the retailer is assumed to be deterministic but price elastic the retailer in turn buys the product from the vendor the vendor and the retailer act independently and rationally each maximizing their own respective profit the equilibrium point that specifies the vendor s and buyer s inventory and pricing policy is determined by the solution to a stackelberg game we consider the cases when quantity discount and volume discount respectively are offered we develop methods to determine the optimal discount policy for these cases we then consider the case where both volume and quantity discounts are offered simultaneously and develop a method to determine the optimal simultaneous discount offer the relative performance of the alternative discount schemes is then evaluated through a numerical study the results of the study demonstrate that the effectiveness of volume discount as a coordination mechanism is higher when the sensitivity of demand to price changes is higher the effectiveness of quantity discount on the other hand is higher with lower price sensitivity of demand finally the results also demonstrate that perfect coordination is achieved when volume and quantity discounts are offered simultaneously

transactions costs inflation and the variety of intermediation services a general equilibrium model with fixed costs of financial intermediation and costs of transacting with intermediaries is constructed this model is used to show that ignoring fixed costs of in termediation is not innocuous in tobin baumol type transactions cost models of money demand deflation is optimal in spite of the fact that an increase in inflation reduces nominal interest rates and may increase the transactions costs incurred by all groups of economic agents changes in reserve requirements have ambiguous effects the authors obtain novel results due to the fact that the variety of intermediation services is affected by government intervention copyright 1987 by ohio state university press

bank competition and firm creation we investigate the effects of competition in the financial sector on the creation of firms in the nonfinancial sector explicitly allowing for heterogeneous effects across borrowers characterized by different degrees of asymmetric information we find evidence of a bell shaped relationship between bank competition and firm creation in addition consistently with theories arguing that competition may reduce the availability of credit to informationally opaque firms we find that bank competition results less favorable to the emergence of new firms in industrial sectors where informational asymmetries are more important

imperfect competition risk taking and regulation in banking abstract we asses the welfare implications of banking competition under various deposit insurance regimes in a model of imperfect competition with social failure costs and where banks are subject to limited liability we study the links between competition for deposits and risk taking incentives and conclude that the welfare performance of the market and the appropriateness of alternative regulatory measures depend on the degree of rivalry and the deposit insurance regime specifically when competition is intense and the social failure costs high deposit rates are excessive both in a free market and with risk based insurance if insurance premiums are insensitive to risk then the same is true even if there is no social cost of failure we find also that in an uninsured market with nonobservable portfolio risk or with flat premium deposit insurance deposit regulation rate regulation or deposit limits and direct asset restrictions are complementary tools to improve welfare in an uninsured market with observable portfolio risk or with risk based insurance deposit regulation may be a sufficient instrument to improve welfare

moral hazard and information sharing a model of financial information gathering agencies we propose a theory of information gathering agencies in a world of informational asymmetries and moral hazard in a setting in which true firm values are certified by screening agents whose payoffs depend on noisy ex post monitors of information quality the formation of information gathering agencies groups of screening agents is justified on two grounds first it enables screening agents to diversify their risky payoffs second it allows information sharing the first effect itself is insufficient despite the risk aversion of screening agents and the stochastic independence of the monitors used to compensate them this paper develops a model that explains the formation of financial institutions which acquire and process information for the purpose of certifying asset qualities but do not get involved in funding the model makes two basic assumptions the first is that there is an informational asymmetry in the capital market involving insiders possessing more accurate information about the true economic values of their firms than outsiders and the second is that those engaged in the production of information to rectify this asymmetry can gain from sharing their information examples of the information gathering agencies iga s we study are creditrating agencies financial newsletters standard and poor s value line investment counselors credit bureaus etc iga s are distinct from funding financial intermediaries ffi s like banks and credit unions that in addition to acquiring and processing information also issue claims against themselves fund their customers needs and transform asset characteristics from a modeling standpoint a key distinction between iga s and ffi s is that in the case of the latter outsiders depositors for instance do not necessarily have to assess the quality of the intermediary s information since the intermediary can be made accountable for this quality through the positions it takes in the screened assets thus models that explain ffi s focus on how the contracts offered by the intermediary ensure information reliability without reliance on explicit monitoring on the other hand because of the absence of loan and deposit type contracts to dissipate informational problems a model explaining iga s must rely on monitoring related mechanisms

integrated vendor buyer cooperative inventory models with variant permissible delay in payments abstract the integrated inventory models usually have the advantage of reducing total cost however the way to allocate the cost savings from the integration to the buyer and vendor is critical to the success of the joint relationship between both sides to deal with this problem this paper develops the integrated models with the permissible delay in payments for determining the optimal replenishment time interval and replenishment frequency applying the models and considering the coefficient of negotiation and the maximum delay payment period a simple solution algorithm is presented to resolve the allocation of cost savings in the integration model the coefficient of negotiation is adopted to determine the compromise between the buyer s and vendor s cost savings a numerical example is used to demonstrate the feasibility of the proposed integration models a sensitivity analysis is also conducted to demonstrate some properties using the information from the proposed models the buyer and vendor can achieve an acceptable compromise solution for both sides in the supply chain management

models for multi plant coordination abstract this paper addresses coordination of production planning among multiple plants in a vertically integrated firm currently there is no unified body of literature that deals with this issue we identify important issues that managers and researchers must address so that production and inventory decisions can be determined for all plants in a manner optimal for the organization as a whole

modeling quantity discounts under general price sensitive demand functions optimal policies and relationships this paper presents models for determining optimal all unit and incremental quantity discount policies and investigates the effect of quantity discounts on increasing demand and ensuring pareto efficient transactions under general price sensitive demand functions the paper develops optimal quantity discount policies investigates their interrelationships and their benefits to both the supplier and the buyer and gains managerial insights for the scenarios of maximizing the supplier s profit and the joint profit we develop simple and efficient solution approaches for determining the all unit and the incremental optimal decision policies for general price sensitive demand functions we have three main findings first with price sensitive demand there are two incentives in offering quantity discounts increasing demand and ensuring pareto efficient transactions in most cases increasing demand dominates in justifying the offering of quantity discounts second using a single lot size associated with all efficient transactions as with the constant demand case does not hold with the price sensitive demand case third the optimal all unit quantity discount policy is equivalent to the optimal incremental quantity discount policy in benefiting both the supplier and the buyer

an exact policy for enhancing buyer supplier linkage in supply chain system abstract kim s l and ha d 2003 a jit lot splitting model for supply chain management enhancing buyer supplier linkage international journal of production economics 86 1 10 proposed a novel cooperative method for synchronizing supply with actual customer demand in a just in time scenario however all decision variables obtained using their model may not be integers making it difficult to be implemented in fixed cycle applications i e a planning horizon of one time period in addition their model can only be used to solve joint optimization for single buyer and single supplier furthermore problems arise when resource constraints are added to their model because traditional inventory models do not allow constraints to be added by the decision maker arbitrarily to improve the practical utility of the model of kim and ha 2003 we derive a mixed integer optimization approach which not only can be applied to the joint optimization for the multi buyer and single supplier but also all decision variables obtained are executable integers for the planning horizon of one time period to suit real world situations infinite planning horizon scenario is also considered in this study in addition illustrative examples are included to demonstrate the usefulness of the proposed models in which the integrated purchase policy being superior to independent optimization can be clearly seen moreover the analytical superiority of the proposed models in terms of execution time can be seen through a computational experiment conduced on a set of logical number of buyers in the multi buyer and single supplier problem finally the performance of various approaches i e proposed models and genetic algorithm is also examined to provide valuable insight into the practical problem

simultaneous determination of multiproduct batch and full truckload shipment schedules abstract a fundamental premise of the well known economic lot scheduling problem elsp is that the finished products are consumed at continuous rates i e their respective cycle inventories are depleted on the basis of unit transactions in today s supply chains however employing complex distribution networks finished goods inventories from manufacturing plants are usually shipped in bulk to succeeding stages along the distribution process moreover existing transport economies often tend to favor full truckload tl rather that partial or less than truckload ltl shipments for economical movement of such goods the scenario examined here however involves a set of products for which individual tl shipments are uneconomical as a remedy we construct a model for taking advantage of tl rates by combining ltl quantities of the items into a full load we adopt the common cycle approach for the elsp in conjunction with a common replenishment cycle as a coordination mechanism that is simple to analyze and implement this is integrated with a periodic full truckload shipping schedule such effective coordination of production and shipment schedules is likely to result in a more streamlined supply chain the concepts developed are illustrated through a simple numerical example

aspects of monetary and banking theory and moral hazard we consider two problems in monetary and banking theory in this paper the first of these deals with differences between monetary and tax transfer resolutions of risk sharing problems in overlapping generations 12 15 models of fiat money under uncertainty our second contribution the scenario for which is also motivated in part by interventions needed for risk sharing reasons is an attempt to provide a rationale for interest rate controls on the liabilities of intermediaries that invest in risky assets both models consider environments in which uncertainty exists private markets are incomplete and most importantly some material payoff relevant actions are not perfectly observable the goal of this research is to provide further momentum to theoretical developments that serve to integrate information based models of investment and intermediation with theories of unbacked fiat money and the control of monetary institutions in recent years there has been a great deal of research interest in explicating the micro economic foundations of fiat money i e valued government created assets which are unbacked by payoffs from productive investments or taxes and the uniqueness and criteria for regulation of depository intermediary firms important contributions have been among others the works of bryant 3 the papers in kareken and wallace 7 fama 6 merton 10 and diamond and dybvig 5 asymmetric information based foundations of intermediary functioning have been provided by the papers of leland and pyle 9 followed by diamond 4 in most of this work there has usually been a dichotomy between models that focus on providing and analyzing a role for fiat money and those which analyze the rationale regulation and pricing of capital market intermediaries and their contracts regrettably we persist in having this dichotomy in our work some recent work like fama 6 does merge these two aspects however by emphasizing perfect information complete market environments in which the financial structure irrelevance theorems of modigliani and miller 10 apply models of unbacked fiat money many different types of which are to be found in kareken and wallace 7 can be usefully dichotomized as being of two types in the first fiat money serves the function of opening up or expanding trading opportunities among contemporaneously living agents who have endowment

depositors welfare deposit insurance and deregulation we develop an analytical model to address the question of optimal deposit insurance policy and to examine the impact of deregulation on depositors welfare and the soundness of the insurance system we find that the optimal level of regulation depends critically on the functional relationship between risk and return we show that in general deregulation of bank activities and or of deposit rate ceilings will involve tradeoff between depositors welfare and the soundness of the insurance system our analysis also indicates that risk sensitive premium and capital requirement schedules may not be efficient in managing the risk of banks the reform of the deposit insurance system and the deregulation of the banking industry have recently received considerable attention from the finance and economics professions prompted by the imminent deregulation of deposit rate ceilings and the prospective relaxation of banking restrictions discussions have been focused on the needed reforms of the deposit insurance system in particular how banks should if at all be regulated the purpose of this paper is to add to these discussions by formally analyzing the connections between depositors welfare deregulation and the soundness of the insurance system according to conventional wisdom the prevailing fixed insurance premium structure necessitates bank regulation without regulation banks will take excessive risk and may thereby bankrupt the insurance system see e g kareken and wallace 12 and edwards and scott 6 therefore restrictions on bank activities were imposed to reduce risk taking one wonders then about the real reasons for the current clamor for deregulation is it because the existing insurance system with its rather rigid policy is inherently inefficient is it because the welfare of

interest margins and bank regulation in central america and the caribbean abstract this paper examines empirically the determinants of bank interest margins in central america and the caribbean over the period 1998 2014 a particular focus is set on the impact of differences in the regulatory environment and market structure across countries in explaining the interest margins of individual banks our results suggest that bank market power operating costs credit risk and liquid asset holdings increase the margin between loan and deposit rates while increased income diversification and gdp growth are associated with lower loan deposit spreads when considering information on banking regulation we find strong evidence to support our main hypothesis that improvements in market quality and liberalization have a significant effect on interest margins more specifically reductions in entry requirements to banking higher involvement of foreign banks and increased financial statement transparency are associated with significant reductions in interest margins

collateral and rationing sorting equilibria in monopolistic and competitive credit markets the authors examine how market structure affects credit allocation under universal risk neutrality and asymmetric information about borrowers they consider both monopolistic and perf ectly competitive banks and examine the role of collateral in each ca se when a bank is a monopolist on the loan side they find collatera l is never used and asymmetric information results in reduced bank le nding under perfect competition collateral has a useful sorting rol e moreover rationing is possible even with collateral availability and perfectly elastic deposit supply in this setting the authors sh ow co signers are valuable social welfare properties of the monopoly and competitive equilibria are also compared copyright 1987 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

on the implications of market power in banking evidence from developing countries abstract this paper investigates how different degrees of market power affect bank efficiency and stability in the context of developing economies it sheds light on the competition stability nexus by documenting and analyzing the complex interactions between a tripod of variables that are central for regulators the degree of market power bank cost and profit efficiency and overall firm stability the results show that an increase in the degree of market power leads to greater bank stability and enhanced profit efficiency despite significant cost efficiency losses the findings lend empirical justification to the traditional view that increased competition may undermine bank stability and may bear significant implications for stressed banking systems in developing economies

production lot sizing with work in process considerations in response to periodic demand abstract this paper develops two separate models for simultaneous determination of a product s manufacturing batch size and the order quantities of the input items that are used in the production process in response to periodic fixed purchase orders from a single customer the effects of work in process inventories resulting from a finite rate of production on the producer s cost function is explicitly taken into consideration in the model development process the first of these models assumes that all input items are procured lot for lot based on the production schedule of the output item this assumption is relaxed in the second model where multiple procurement lots for any input during a production cycle are allowed while an optimization procedure is outlined for solving the first model for the more generalized case an iterative heuristic solution algorithm is proposed due to the associated computational burden particularly for a large number of input items these concepts are illustrated through a numerical example

financial opening deposit insurance and risk in a model of banking competition abstract we study the impact of competition on banks risk taking behavior under different assumptions about deposit insurance and the dissemination of information while financial opening increases banks riskiness a risk based deposit insurance or alternatively the public disclosure of financial information are likely to mitigate this effect moreover the limiting cases of uninsured but fully informed depositors and risk based full deposit insurance yield the same equilibrium risk level although the welfare consequences of increased competition depend on its impact on risk financial opening unambiguously improves welfare as we approach the limiting cases

is fairly priced deposit insurance possible we analyze risk sensitive incentive compatible deposit insurance in the presence of private information and moral hazard without deposit linked subsidies it is impossible to implement risk sensitive incentive compatible deposit insurance pricing in a competitive deregulated environment except when the deposit insurer is the least risk averse agent in the economy we establish this formally in the context of an insurance scheme in which privately informed depository institutions are offered deposit insurance premia contingent on reported capital the result holds for alternative sorting instruments as well this suggests a contradiction between deregulation and fairly priced risk sensitive deposit insurance this paper exposes a conflict between a deregulated competitive financial services industry on the one hand and fairly priced risk sensitive deposit insurance on the other we show that if depository institutions dis are perfectly competitive i e each makes zero profits on average then it is impossible to implement incentive compatible risk sensitive deposit insurance pricing recent distress among dis has fueled debate about reform of the existing deposit insurance system many believe that the prevailing risk insensitive premium structure encourages dis to choose excessively risky assets and that it should be replaced by deposit insurance premia linked to the dis choices of risk 2 risk sensitive deposit insurance pricing however imposes greater informational demands on the deposit insurer and runs afoul of both

adapting inventory models for handling various payment structures using net present value equivalence analysis beullens patrick univ southampton southampton so17 1bj hants england janssens gerrit k univ southampton southampton sch management southampton so17 1bj hants england janssens gerrit k hasselt univ res grp logist b 3590 diepenbeek belgium

lead time reduction strategies in a single vendor single buyer integrated inventory model with lot size dependent lead times and stochastic demand this paper studies alternative methods for reducing lead time and their impact on the safety stock and the expected total costs of a q s continuous review inventory control system we focus on a single vendor single buyer integrated inventory model with stochastic demand and variable lot size dependent lead time and assume that lead time consists of production and setup and transportation time as a consequence lead time may be reduced by crashing setup and transportation time by increasing the production rate or by reducing the lot size we illustrate the benefits of reducing lead time in numerical examples and show that lead time reduction is especially beneficial in case of high demand uncertainty further our studies indicate that a mixture of setup time and production time reduction is appropriate to lower expected total costs

regulations market structure institutions and the cost of financial intermediation this paper examines the impact of bank regulations market structure and national institutions on bank net interest margins and overhead costs using data on over 1400 banks across 72 countries while controlling for bankspecific characteristics the data indicate that tighter regulations on bank entry and bank activities boost the cost of financial intermediation inflation also exerts a robust positive impact on bank margins and overhead costs while concentration is positively associated with net interest margins this relationship breaksdownwhencontrolling for regulatory impediments to competition and inflation furthermore bank regulations become insignificant when controlling for national indicators of economic freedom or property rights protection while these institutional indicators robustly explain cross bank net interest margins and overhead expenditures thus bank regulations cannot be viewed in isolation they reflect broad national approaches to private property and competition

an optimal banking structure from the perspective of enterprise technological innovation empirical evidence from chinese industrial enterprises this paper applies the incomplete contracts model to study an optimal banking structure corresponding to different levels of technological development from the perspective of technological innovati

optimal capacity in the banking sector and economic growth the paper investigates from the welfare and growth point of view the determination of the optimal capacity of the banking system for that purpose we consider an overlapping generation model with endogenous growth there is horizontal differentiation and imperfect competition in the banking sector macroeconomic shocks affect the return on capital and together with the expectations of depositors condition the stability of the banking sector we specify to what extent deposit insurance may reduce instability and increase the number of deposits welfare and growth we also characterize the conditions under which excess banking capacities may appear and how their reduction may improve welfare

loan market equilibrium with difference of opinion and imperfect competition abstract difference of opinion between banks and borrowers influences the competitiveness of loan markets the more optimistic the borrowers the more elastic the demand for loans this reduces lending rates decreases the expected profits of banks and discourages entry by banks

supplier pricing and lot sizing when demand is price sensitive abstract the problem of co ordination between a vendor and a buyer is formulated as a two person fixed threat bargaining game the vendor decides on his lot size and the price schedule he is to offer to the buyer the buyer decides upon his lot size and the selling price in the market we have characterized pareto efficient solutions and the nash bargaining solution for the problem we have also proposed two pricing schedules for the vendor who is supplying to a large population of buyers the first one is based upon profit sharing the second one resembles the classical all unit quantity discount schedule we have thus provided for the supplier a procedure for setting all unit quantity discount schedule

banking regulation and competition with product differentiation abstract the main motivation for prudential regulation is to increase the solvency of the banking sector however it is usually understood that tighter regulation also leads to more concentration and higher spreads thus these prudential measures are seen as implying a trade off between solvency and competition in this paper we argue that this trade off does not necessarily exist we present a model in which tighter capital requirements lead banks to choose a lower degree of product differentiation potentially inducing more intense competition and lower spreads the model is motivated by the recent evolution of the argentine banking sector

foundations of the structure conduct performance paradigm in banking this paper employs an explicit model of the banking firm to derive formally and thereby assess critically the most commonly tested relationships implied by the structure conduct performance paradigm as it applies to the banking industry these include the relationship between loan rates and market concentration deposit rates and market concentration and bank profitability and market concentration the necessary assumptions and simplifications implicit in past empirical studies are outlined and suggestions for future empirical implementation of the underlying model are presented copyright 1991 by ohio state university press

market based supply chain coordination by matching suppliers cost structures with buyers order profiles we study competitive marketplaces with multiple suppliers and multiple buyers dealing with a single product a buyer chooses the supplier who offers the best price for his order profile as described by his order size and delivery frequency a supplier s offering price reflects her logistic cost structure as captured by relevant economies of scale in a setup cost component and storage and distribution related costs in a holding cost per unit component we argue that the matching of buyers order profiles to suppliers cost structures is the main source of supply chain coordination benefit in this many to many supply chain such cost effective matching can be achieved naturally through price competition among suppliers we identify the segment of the buyer s order space that each supplier can win and perform market share sensitivity analysis when a supplier s cost structure changes the winning supplier at the equilibrium of price competition offers the lowest price of her closest competitor inste