the complex evolution of a simple traffic convention the functions and implications of habit this chapter presents an agent based simulation of the emergence of a traffic convention concerning whether to drive on the left or the right of the road the interaction between agents and structures involves causal influences in two directions showing how agents constitute institutions and how institutions can have reconstitutive causal effects on individuals

a comparison of managers perceptions of short termism in sweden and the u s u s and u k firms have been thought to invest in a more short term manner than japanese and german firms this article uses a questionnaire and interviews to compare u s and swedish top executiv

investigating diesel market integration in france evidence from micro data abstract we use station level daily price observations collected over a period of eight years to study the extent of diesel market integration in france the empirical analysis starts off by examining the time series properties of diesel price ratios and then assesses how geographical separation and petrol station characteristics affect the speed of adjustment of prices to exogenous shocks our findings reveal that the great majority of diesel price ratios maintain stable long run relationships we also find that while price ratios take longer to adjust for pairs of petrol stations that are farther apart adjustment is quicker when pairs of petrol stations provide the same range of services and when they belong to the same owner

the hidden persuaders institutions and individuals in economic theory in his classic book the hidden persuaders vance packard claimed that large corporations manipulated consumers using advertising techniques john kenneth galbraith and others have repeated a similar view against this gary becker and george stigler have claimed that advertising is essentially informative rather than manipulative in contrast it is argued here that both of these opposed accounts of human agency neglect the more subtle and undesigned processes by which institutions bear upon and mould individuals this paper proposes a concept of reconstitutive downward causation in which institutions act upon individual habits and dispositions the mechanisms involved do not fall foul of past critiques of holism or methodological collectivism this argument involves a rehabilitation of the concept of habit in social science with far reaching implications

price asymmetry in the dutch retail gasoline market abstract this article analyses the retail price adjustments in the dutch gasoline market we estimate an asymmetric error correction model on weekly price changes for the years 1996 2001 we construct five datasets one for each working day the conclusions on asymmetric pricing are shown to differ over these datasets suggesting that the choice of the day for which the prices are observed matters more than commonly believed in our view the insufficient robustness of the outcomes might explain the mixed conclusions found in the literature using these two approaches we also show that the effect of asymmetry on the dutch consumer costs is negligible

testing for asymmetric pricing in the canadian retail gasoline market abstract this paper applies a threshold regression model to test for asymmetric pricing in the retail gasoline market in canada using weekly data for the period january 1990 to december 1996 we present results for 13 canadian cities for both premium and regular gasoline within the context of an error correction model we test for the presence of asymmetric price behaviour using average changes in crude prices as well as various lags for the change in crude as possible thresholds we are unable to find any evidence to support this view

stimulating different types of eco innovation in the uk government policies and firm motivations in this paper we adopt a recent oecd framework and examine the role of external policy tools and internal firm specific factors for stimulating three different types of eco innovations that range on a spectrum of lower to higher technological and environmental impacts end of pipeline pollution control technologies integrated cleaner production technologies and environmental r d using a novel firm level dataset from a defra survey we estimate a tobit model which provides empirical evidence showing that these eco innovations are motivated by different external policy tools and internal firm specific factors our findings indicate that end of pipeline technologies and integrated cleaner production technologies are mainly driven by equipment upgrade motives with a view of improving efficiency while environmental regulations are effective in stimulating the end of pipeline technologies and environmental r d interestingly alongside government induced regulations we find that market factors mainly motivated by cost savings are effective in driving environmental r d finally iso14001 certification is effective in strengthening the positive impact of environmental management systems on both end of pipeline technologies and environmental r d while csr policies have no significant impact on motivating any of the eco innovations

why market valuation indifferent indexing works using market values for indexing gives more portfolio weight to the stocks with positive price errors and less portfolio weight to the stocks with negative price errors market valuation indifferent indexing such as equal weighting or weighting by number of employees number of customers or sales relies on averaging over hundreds of stocks to give equal weight to the two groups

rockets and feathers the asymmetric speed of adjustment of uk retail gasoline prices to cost changes abstract the paper develops a quadratic quantity adjustment model to test the hypothesis put forward in the recent monopolies and mergers commission report that the speed of adjustment of uk retail gasoline prices to cost changes is more rapid when costs rise than when they fall and that the adjustment path is more concentrated around the mean value on the upswing using data from 1982 to 1989 evidence of faster and more concentrated responses to cost increases were found

resource allocation in a few industries determinants and trends when the major corporations divisionalised their organisation after the second world war they devised a performance measurement system to monitor the development of their business units and a capital budgeting system to control the direction of investments the appraisal of investments was decentralised and capital budgeting became a bottom up process standardised through written routines and supervised via a pre approval control system since then investments in training rd indeed it rarely exists in professional service groups notwithstanding the industry does not invest less but concentrates on intangible types of investments the purpose of this article is to describe and identify the factors which dictate the design of the resource allocation system in a few industries and thereby perceive the direction in which the development is heading the analysis identifies five factors which determine the design of the resource allocation system and shows how this affects the resource allocation system in six industries it also discusses different means of control and the future trends and explains why the capital budgeting system becomes less important as industry becomes more knowledge intensive

why do manufacturing facilities introduce environmental management systems improving and or signaling performance abstract in this paper we explore the motivation for the introduction of environmental management systems and their certification a distinction is drawn between their role in bringing about better compliance or improved performance and as external indicators of good environmental practices to both other market participants and regulatory authorities drawing upon a database of approximately 4000 facilities in seven oecd countries empirical evidence is found for the role that both factors play in encouraging the adoption and certification of ems s but that the relative importance of different factors varies according to facility size

can neoclassical economics handle complexity the fallacy of the oil spot dynamic abstract this paper is essentially a rebuttal of the view that neoclassical economics can handle complexity i have coined the locution oil spot dynamic to denote the neoclassical ability to subsume each and every new perspective the main part of the paper is devoted to showing why the oil spot dynamic cannot work with the complexity approach which is seen as a coherent stand alone research program that stems from the sfi economics program and manifests itself with different nuances the fallacy of the oil spot dynamic is relevant in this period in which economists are beginning to realize that the neoclassical samuelsonian paradigm no longer represents the common language of their profession the spread of the complexity approach and the dissolving notion of mainstream are here interpreted as indicative of a changing economics a short foray into the features of the process of change completes my arguments by showing that the shift from one paradigm to another has many interrelated dimensions and that there may be rigidities internalizing changes

assessing social capital small and medium sized enterprises in germany and the u k social capital can be considered to be the product of co operationbetween various institutions networks and business partners it haspotential as a useful tool for business ethics in this article weidentify categories pertinent to the measurement of social capital insmall and medium sized enterprises smes by drawing on three differentsectors one business to business service one business to customerservice and one manufacturing we have enabled the consideration ofsectoral differences we find sector to play an important part inrelation to business practices and social capital our inclusion of smesfrom germany and the united kingdom has called attention to cultural institutional and economic aspects of two regions of europe and how theycan influence sme social capital social capital is found to beinfluenced by context and in particular institutional arrangements inanalysing the data we note particular areas of interest from the pointof view of smes and social capital as being formal engagement networking within sectors networking across sectors volunteerism andgiving to charity and finally a focus on why people engage we concludethat there is a considerable amount of further research needed on socialcapital sme s and business ethics

spatial differentiation and vertical mergers in retail markets for gasoline this paper studies an empirical model of spatial competition applied to gasoline markets the main feature is to specify commuting paths as the locations of consumers in a hotelling style model as a result spatial differentiation depends in an intuitive way on the structure of the road network and the direction of traffic flows the model is estimated using panel data on the quebec city gasoline market and used to evaluate the consequences of a recent vertical merger difference in difference and counterfactual simulation methods are compared and the results to a large extent validate the assumptions of the demand model jel g34 l13 l42 l81 q41 r41

localized competition heterogeneous firms and vertical relations this paper investigates the link between firms geographic configuration and market power in imperfect markets we consider two related setups the first illustrates the relevant characteristics of the pricing equilibrium a main implication is that the equilibrium price vector changes in accordance with the firms spatial configuration the second where firms operate as downstream retailers affiliated to rival upstream wholesalers shows that upstream market power is strongly affected by an index of geographic concentration which reflects the spatial configuration of retailers finally our analysis provides several insights for market delineation as well as merger evaluation and remedies

retail price cycles and response asymmetry weekly retail gasoline prices in windsor ontario from 1989 to 1994 appear to respond faster to wholesale price increases than to decreases but exhibit a cyclic pattern inconsistent with a common explanation of response asymmetry i reconcile these observations through a model of price cycles prices on the downward portion of the cycle appear insensitive to costs compared with price increases supporting the theory that price decreases result from battles over market share this pattern resembles a faster response to cost increases than to decreases and the conclusion that asymmetry indicates a role for competition policy may be inappropriate jel classification l13 l71 cycles des prix de detail et reponse asymetrique les prix de detail hebdomadaires de la gazoline a windsor ont entre 1989 et 1994 semblent reagir plus vite aux accroissements qu aux chutes des prix de gros mais suivent un pattern cyclique qui ne semble pas consistant avec l explication traditionnelle en termes de reponse asymetrique l auteur reconcilie ces observations a l aide d un modele de cycle de prix les prix dans la portion descendante du cycle semblent insensibles aux variations de couts par comparaison avec les accroissements de prix ce qui supporte la theorie que les chutes de prix resultent de luttes pour les parts de marche le pattern ressemble a celui declenche par une reponse plus rapide aux augmentations qu aux chutes de couts et la conclusion qui voudrait qu on puisse attribuer le tout a l asymetrie des reponses et que donc une intervention de la politique de la concurrence s impose peut etre inappropriee

sticky prices inventories and market power in wholesale gasoline markets a model with costly adjustment of production and costly inventories implies that wholesale gasoline prices will respond with a lag to crude oil cost shocks unlike explanations that rely upon menu costs imperfect information or long term buyer seller relationships this model predicts that futures prices for gasoline will adjust incompletely to crude oil price shocks that occur close to the expiration date of the futures contract we test and confirm this implication examining wholesale price responses in 188 gasoline markets we also find that firms with market power adjust prices more slowly than do competitive firms consistent with the model

corporate ownership and managerial short termism results from a finnish study of management perceptions abstract increased media exposure to layoffs and corporate quarterly financial reporting have created arguable a common perception especially favored by the media itself that the companies have been forced to improve their financial performance from quarter to quarter academically the relevant question is whether companies themselves feel that they are exposed to short term pressure to perform even if it means that they have to compromise company s long term future this paper studies this issue using results from a survey conducted among the 500 largest companies in finland the results indicate that companies in general feel moderate short term pressure with reasonable dispersion across firms there seems to be a link between the degree of pressure felt and the firm s ownership structure i e we find some support for the existence of potentially short term versus long term owners we also find significant ownership related differences in line with expectations in how such short term pressure is reflected in actual decision variables such as the investment criteria used

towards sustainable consumption and production competitive pricing of modular products for green consumers abstract concern for unsustainable development has peaked and promoting and devising sustainable production and consumption is vital therefore via an analytical model we examine the impact of modularity and consumer sensitivity to sustainability on the pricing decisions of two competing firms consider an environmentally conscious green consumer who will buy one of two available horizontally differentiated products a modular product m manufactured by firm m or a standard product s manufactured by firm s firm m can take advantage of its modular production technology and product return policy for such a consumer driven demand setting we develop a model and solve to optimality a single stage non cooperative game where both firms simultaneously set their competitive prices in addition to analytical expressions for the optimal prices and the profits for both firms we provide structural results and numerical examples to render practical insights the refund rate has a strong impact on profits sensitivity of product greenness can be increased by conscientious advertising and the reusability of modular parts encourages lower pricing and higher market share we assert that modularity is a strong concept and practice in developing sustainable products and thereby in production which in turn may enhance sustainable consumption this study s findings have direct implications for reverse supply chain management and firms should take these findings into account early in the product design phase

corporate capital expenditure decisions and the market value of the firm abstract this paper is an event time study of the common stock prices of a sample of 658 corporations around the dates on which they publicly announced their future capital expenditure plans for industrial firms announcements of increases decreases in planned capital expenditures are associated with significant positive negative excess stock returns for public utility firm neither increases nor decreases in planned capital expenditures are associated with significant excess stock returns we interpret the evidence as being consistent with the hypothesis that managers seek to maximize the market value of the firm in making their corporate capital expenditure decisions

dynamic pricing in retail gasoline markets supergame models of tacit collusion show that supportable price cost margins increase with expected future collusive profits ceteris paribus as a result collusive margins will be larger when demand is expected to increase or marginal costs are expected to decline using panel data on sales volume and gasoline prices in 43 cities over 72 months we find behavior consistent with tacit collusion in retail gasoline markets controlling for current demand and cost current margins increase with expected next month demand and decrease with expected next month cost the results are not consistent with intertemporal l inkages due to inventory behavior or customer loyalty

the effect of ownership structure on prices in geographically differentiated industries i analyze how ownership structure and market geography jointly influence fast food prices i estimate a model of demand and supply that accounts for the market geography and run counterfactual experiments that demonstrate how mergers affect prices i find that the impact of mergers can be large that this impact decreases as the merging outlets are farther apart that mergers among market leaders generally increase prices more than mergers among weaker firms and that mergers can increase prices even if the outlets are so far apart that neither outleti s presence affects prices at the other before the merger

a theory of dynamic oligopoly ii price competition kinked demand curves and edgeworth cycles we provide game theoretic foundations for the classic kinked demand curve equilibrium and edgeworth cycle we analyze a model in which firms take turns choosing prices the model is intended to capture the idea of reactions based on short run commitment in a markov perfect equilibrium mpe a firm s move in any period depends only on the other firm s current price there are multiple mpe s consisting of both kinked demand curve equilibria and edgeworth cycles in any mpe profit is bounded away from the bertrand equilibrium level we show that a kinked demand curve at the monopoly price is the unique symmetric renegotiation proof equilibrium when there is little discounting we then endogenize the timing by allowing firms to move at any time subject to short run commitments we find that firms end up alternating thus vindicating the ad hoc timing assumption of our simpler model we also discuss how the model can be enriched to provide explanations for excess capacity and market sharing keiiwords tacit collusion markov perfect equilibrium kinked demand curve edgeworth cycle excess capacity market sharing endogenous timing

investments and investment processes in professional service groups this article describes and analyses the size and character of investments the investment criteria and the investment processes in some professional service groups the focus is on means of control used by the corporate level to influence the volume and direction of investments in groups of companies comparisons are made with standardized service and manufacturing groups professional service groups are of special interest because theirs is a growth industry moreover many manufacturing groups have become more knowledge intensive and have adopted project based structures similar to those found in professional service groups the article shows that professional service groups invest just as heavily as do manufacturing firms but concentrate their investments on training and the development of new knowledge the principles of investment planning and control are the same as in manufacturing groups but the means and the weight attached to them differ investment requests are initiated on the business unit level and major investment requests are channelled through the executive team system for approval however there is no system of defining requesting and reviewing intangible investments rather review is by projects and units the focus is on market and social not administrative means of control

corporate social responsibility sustainable water use freshwater scarcity is no longer limited to sub saharan developing countries also in western society access to unlimited amounts of freshwater is not assured at all times it has been argued and laid down in many national legal systems that access to freshwater is a basic human right what if corporate freshwater use threatens to interfere with this human right the main focus of the article is to explore the role of today s companies in relation to freshwater a number of tools have been developed to attend to the necessity to reduce corporate use of freshwater the article discusses specialised water reporting instruments such as the 2007 global water tool and the water footprint calculation method in addition attention is paid to a ceres report 2010 revealing that the majority of the 100 world s leading companies in water intensive industries still has weak management and disclosures of water related risks and opportunities to obtain concrete information about corporate water strategies and practices an explorative analysis was conducted on 20 dutch multinational companies the article highlights various innovative practices in sum it is demonstrated that companies are expected to bear responsibility for their impact on water resources in particular when it influences public access to water in areas with freshwater scarcity and or weak government notwithstanding the critical conclusions of the ceres report it is interesting to see an evolution in corporate research concerning sustainable water use and the development of greener products and greener ways of production

price matching and the domino effect in a retail gasoline market i introduction for many years there have been competition concerns regarding how retail gasoline prices are set in the united states and canada in several u s states including delaware maryland nevada and virginia such concerns gave rise to divorcement legislation under which refiners are not permitted to own or operate gas stations 1 concerns have also been raised in the united states regarding zone pricing a company that owns and operates gasoline stations might define price zones where prices for all its stations in the zone are the same it has been suggested that zone pricing is a form of price discrimination and thus is an indicator of market power it has also been argued that zone pricing can be used in an anticompetitive fashion to coordinate pricing and to deter entry through localized price cutting 2 in canada consumers have complained about the perceived uniformity of retail gas prices in some markets and the perception that retailers raise their prices at the same time consumers have also been troubled by the observation that retail gasoline prices in some markets rise faster than they fall 3 concerns have also been voiced regarding interjurisdictional differences in retail prices that do not appear to be cost based indicating to consumers that retail gasoline markets are not competitive 4 possibly in response to public concerns canada s gasoline industry has advanced a competitive theory of gasoline pricing to explain certain perceived features of gas pricing that lead to allegations of collusion or anticompetitive behavior under this theory it is assumed that gas is a homogeneous good consumers are willing to drive long distances to save small amounts of money on gas and prices are perfectly observable by consumers and nearby competitors based on these assumptions it is argued that intramarket prices tend to uniformity individual stations quickly match price changes by certain competitors and price changes pass through an entire market almost immediately in a domino fashion 5 while many complaints have been made regarding how retail gas prices are set and the gasoline industry has offered explanations there are almost no publicly available studies of how prices actually change in urban retail gasoline markets using complete station specific data on intraday price changes over a long period of time such data are simply not available for most urban markets and can only be collected through personal observation of prices or possibly via subpoena of retailers pricing records in the course of a formal investigation even here price data may not be complete yet without such data there exists no formal evidence that the stylized facts that the competitive theory attempts to explain are indeed facts and that pricing behavior is consistent with a theory of anti or procompetitive conduct the purpose of this article was to use gasoline station price data collected eight times per day for 103 d for 27 gas stations in guelph ontario to evaluate the accuracy of the received wisdom regarding gas prices and the implications advanced by the informal theory of competitive gas pricing while the informal competitive theory seems to have been accepted by governments in many instances some jurisdictions remain unconvinced for example the sense that consumers concerns regarding gasoline pricing were not being addressed led the house of legislative assembly of nova scotia to establish an all party committee to investigate gasoline pricing in that province in its report the committee made a number of strong recommendations such as retail divorcement or price regulation if divorcement is rejected a prohibition of petroleum product sales below acquisition cost and that refiners must charge the same rack price to all customers 6 these recommendations are clearly motivated by anxieties regarding possible anti competitive conduct which may or may not be supported by a detailed analysis of retail gasoline pricing data

mergers brand competition and the price of a pint abstract mergers in the uk brewing industry have reduced the number of national brewers from six to four the number of brands in contrast has remained relatively constant we analyze the effects of mergers on brand competition and pricing brand level demand equations are estimated from a panel of draft beers to model brand substitution possibilities we estimate the matrix of cross price elasticities semiparametrically our structural model is used to assess the strength of brand competition along various dimensions and to evaluate the mergers in particular we compute equilibria of pricing games with different numbers of players

the economics of short term performance obsession in theory discounted cash flows dcfs set prices in well functioning capital markets in practice investment managers attach substantial weight in stock selection to short term performance particularly earnings and tracking error corporate executives blame this behavior for their own obsession with short term earnings are stock prices likely to allocate financial resources efficiently when short term earnings dominate investment decisions can investment managers who identify stocks as mispriced on a dcf basis earn excess returns this article explains why maximizing long term cash flow is the most effective way to create value for shareholders and charts a course for alleviating the obsession with short term performance

price competition short termism and environmental performance this paper studies the relationships between the intensity of price competition time horizon and environmental performance we hypothesize that more intense price competition discourages environmental performance by inducing short termism in companies we test the hypotheses on a sample of 3152 companies from twelve european countries using structural equation modeling test results show that price competition significantly shortens the time horizon that companies apply in strategic decisions and that long time horizon significantly increases their environmental performance however the net negative effect of the intensity of price competition on environmental performance is small in absolute terms the policy implication is that there is no serious dilemma between fostering environmental performance on one hand and increasing consumer surplus by encouraging price competition on the other hand

the pricing behavior of italian gas stations some evidence from the cuneo retail fuel market abstract this paper studies how gas stations adjust their gasoline and diesel prices in response to their neighboring competitors the empirical analysis relies on data collected from january to august 2011 on the daily prices of 20 gas stations located in cuneo italy these data show significant price uniformity especially within the same geographical area of the town approximately one third of gas stations responded within a day to targeted competitors price changes indicating some evidence of price matching behavior in the industry additionally there is some but discontinuous geographical price propagation testifying to the presence of a weak domino effect finally spatial econometric analysis suggests that there is spatial dependence between gas stations up to about 1 1 km

calvin s restrictions on interest guidelines for the credit crisis calvin s view on the legitimacy of interest has had a great impact on the economic development of western society although calvin took a fundamentally positive attitude to interest he also proposed several restrictions on the charging of interest in this article we investigate the relevance of these restrictions to the current credit crisis we find that each of them provides a relevant interpretation of what went wrong in the buildup of the credit crisis and gives directions to improve policies of banks and governments as well

testing for strategic interaction among local governments the case of growth controls this paper helps to fill a gap in the public economics literature by providing empirical evidence on strategic interaction among local governments using the methodology of case et al journal of public economics 52 285 307 1993 the paper focuses on the adoption of growth control measures by cities in california and looks for evidence of policy interdependence in these choices the data are drawn from an elaborate survey of growth control practices in california cities conducted by glickfeld and levine regional growth local reaction lincoln institute of land policy cambridge ma 1992 the survey results are used to compute an index of the stringency of growth controls in each city which serves as the dependent variable for the study

making sense of institutions as a factor shaping economic performance abstract there has recently been a resurgence of interest in how institutions affect economic performance a review of this literature reveals that the concept of an institution means different things to different scholars both within economics and across the social sciences we discuss what factors unify the different definitions of institutions and develop a concept of institutions useful for the analysis of economic performance and economic growth in particular specifically we develop the notion of institutions as standard social technologies economic growth results from the co evolution of physical and social technologies

capital budgeting methods among sweden s largest groups of companies the state of the art and a comparison with earlier studies abstract this study presents a general description of the state of the art of capital budgeting methods used by swedish corporations it is based on a questionnaire sent to 528 companies selected from 500 of the largest swedish corporations and some from the o list of companies the response rate is 24 4 the study shows that the public sector companies are most frequent users of discounted cash flow dcf methods the payback method is the most used in all industries also matters size of company the use of the net present value method has increased over the years although the use of dcf methods is generally unchanged value based management models have been introduced in the listed companies another conclusion is that tradition is an important factor explaining the choice of capital budgeting method large companies within the manufacturing industry use dcf methods more often than other companies in general the companies seem unconcerned with the tax consequences of capital budgeting decisions it would appear as if the public companies have not adopted capital budgeting practices supporting shareholder value increases

vancouver s gasoline price wars an empirical exercise in uncovering supergame strategies this paper uses a unique data set to determine which dynamic model of tacit collusion best describes behaviour in a particular industry the area investigated is a region of the vancouver british columbia retail gasoline market players are service station managers who compete daily firms choose price in each period using strategies that depend on prices chosen in the previous period periodically unanticipated demand shocks precipitate price wars when shocks occur the firms in the market must determine the new demand conditions and adjust their strategies from an econometric point of view slopes of intertemporal reaction functions are latent variables the resulting system of equations with time varying parameters is estimated via the kalman filter different repeated game oligopoly models correspond to different transition matrices for the latent variables the models can thus be assessed in terms of their power to explain firm behaviour in this market

testing for price response asymmetries in the spanish fuel market new evidence from daily data abstract in this work we use daily data to examine pattern asymmetries in the speed of transmission of international wholesale oil prices to spanish retail fuel prices results are robust to two alternative specifications of an asymmetric error correction model for which the presence of autoregressive conditional heteroskedasticity for disturbances is modeled by a garch 1 1 process evidence indicates that the short term transmission of wholesale prices to retail prices is quite symmetric for both gasoline and diesel fuel nevertheless in contrast to some of the results provided for an earlier period we did not find asymmetries in the speed of retail price responses toward long run equilibrium our evidence also suggests that the use of weekly or lower frequency data is one of the possible explanations for some of the seemingly contradictory results concerning this issue

retail gasoline price cycles across spatially dispersed gasoline stations abstract studies of volatility in retail gasoline prices have used either weekly averages of the prices at a small subset of stations in a city or daily observations on prices at a small number of stations this paper uses daily observations on station specific prices within a large canadian metropolitan area to address whether weekly average prices or prices for a small number of stations provide an accurate description of pricing in a market with volatility this paper considers whether researchers using restricted data can draw meaningful conclusions about the appropriate theoretical model and the policy response to allegations of anticompetitive behavior

new evidence on asymmetric gasoline price responses in a 1997 paper borenstein cameron and gilbert bcg claim that gasoline prices rise quickly following an increase in the price of crude oil but fall slowly following a decrease this note estimates an error correction model with daily spot gasoline and crude oil price data over the period 1985 1998 and finds no evidence of asymmetry in wholesale gasoline prices the sources of the difference in results are twofold first we use the standard engle granger two step estimation procedure whereas bcg used a nonstandard estimation methodology second even using bcg s nonstandard specification the use of daily rather than weekly data yields little evidence of price asymmetry

spatial competition with changing market institutions summary competition across space can be fundamentally altered by changes in market institutions we propose a framework that integrates market altering policy changes in the spatial analysis of competitive behavior and incorporates endogenous breaks in explanatory variables for spatial panel datasets this paper fills a gap in the literature between work focusing on spatial price responsiveness of agents and work on changes in market regulations that affect competition we apply the framework to an important current fishery management policy to explore how a change from aggregate to individual fishing quotas affects the spatial price responsiveness of fish processors copyright 2012 john wiley sons ltd

spatial price competition a semiparametric approach we investigate the nature of price competition among firms that produce differentiated products and compete in markets that are limited in extent we propose an instrumental variables series estimator for the matrix of cross price response coefficients demonstrate that our estimator is consistent and derive its asymptotic distribution our semiparametric approach allows us to discriminate among models of global competition in which all products compete with all others and local competition in which products compete only with their neighbors we apply our semiparametric estimator to data from u s wholesale gasoline markets and find that in this market competition is highly localized

testing for short termism in the uk stock market this paper uses data on the stock market valuations of a large sample of uk companies to assess if that market displays short termism tests are undertaken of whether discount rates implicit in market valuations applied to cash flows which accrue in the longer term are too high both absolutely and relative to the rates applied to cash flows in the near term i find prima facie evidence that these longer term discount rates are too high a result consistent with the existence of short termism an alternative interpretation of the results is that risk premia applied to expected cash flows systematically increase with the maturity of those flows whether this interpretation is consistent with asset pricing theories is questionable copyright 1993 by royal economic society

transaction cost economics and the carnegie connection abstract this paper tracks my remarks at the september 1993 conference honoring richard m cyert it begins with some recollections of my years as a graduate student at gsia in the early 1960s i then shift to transaction cost economics and how this project relates to what i learned from dick cyert and others at carnegie

shifting boundaries in economics the institutional cognitive strand and the future of institutional economics this paper aims at contributing to the debate on the future of institutional economics and of the field as a whole by starting from the literature that discusses the relationship between old original institutional economics and new institutional economics it suggests that the process of reunifying oie and nie and evolutionary economics prompted by part of the literature could be improved by the contribution of the cognitive institutional economics the paper follows a two stage pathway first it frames the debate on the relationships between nie and the oie and it concentrates on a subset of the literature that shows that nie s recent developments complicate the distinction between nie and oie and it explores the possibility that nie and oie may merge so that an amalgam of nie oie and evolutionary economics becomes the next economic paradigm secondly the paper argues that a step forward in the direction outlined by the literature has been made by cie which is a research stream that developed from cross fertilization among nie oie and the hayekian contributions to the analysis of institutions in the concluding remarks the possible emergence of a single institutional paradigm is discussed in the light of the literature about change in economics

price leadership and coordination in retail gasoline markets with price cycles abstract this study examines the coordination mechanism used by gasoline stations in the midwestern united states where prices exhibit highly cyclical fluctuations known as edgeworth cycles stations in these markets repeatedly coordinate large marketwide price increases following periods of aggressive price undercutting by studying these periodic price jumps both over time and across cities i find that a particular retail chain in each city acts as a price leader initiating each price restoration the leader signals the new price level to competitors by simultaneously jumping prices at all its stations to a single price competitors follow quickly with a large majority of stations jumping to the exact same price within a 24 hour period the characteristics of the leading firms and the nature of observed price coordination suggest that successful price jumps may be facilitated by the existence of a retailer controlling the prices of a significant number of stations in a city identifying the important role of these firms in the market contributes to a broader understanding of price leadership and coordination and highlights another potential reason why price cycles exist in some in retail gasoline markets and not others

why are prices sticky the dynamics of wholesale gasoline prices the menu cost interpretation of sticky prices implies that the probability of a price change should depend on the past history of prices and fundamentals only through the gap between the current price and the frictionless price we find that this prediction is broadly consistent with the behavior of nine philadelphia gasoline wholesalers nevertheless we reject the menu cost model as a literal description of these firms behavior arguing instead that price stickiness arises from strategic considerations of how customers and competitors will react to price changes

empirical investigation of retail fuel pricing the impact of spatial interaction competition and territorial factors abstract this paper explores the determinants of fuel prices by proposing an empirical framework that integrates three kinds of influencing factors spatial interaction competition and territorial factors for competition we define a general variable the presence of competing stations within a radius and two specific variables the presence of low cost stations and the presence of same brand stations we proceed with a step wise adjustment of the radius by gradually increasing it to evaluate the spatial scope of different competition effects using data on prices of fuel stations in rome italy we estimate spatial econometric models that provide evidence of spatial dependence in price between stations we also find that competition affects prices but the relevance of its impact depends on radius length finally the territorial factors remarkably influence prices if these factors are introduced in the model the magnitude of spatial parameters weakens allowing to accurately assess the intensity of spatial dependence

institutions in economics the old and the new institutionalism 1 definitions and issues 2 formalism and anti formalism 3 individualism and holism 4 rationality and rule following 5 evolution and design 6 efficiency and reform 7 conflicts and complementarities

edgeworth price cycles evidence from the toronto retail gasoline market i exploit a new station level twelve hourly price dataset to examine the strong retail price cycles in the toronto gasoline market the cycles appear similar to theoretical edgeworth cycles strongly asymmetric tall rapid and highly synchronous across stations i test a series of predictions made by the theory about how firm behaviors would differentially evolve over the path of a cycle the evidence is consistent with the existence of edgeworth cycles and inconsistent with competing hypotheses while the cycles are an interesting phenomenon for study in their own right the evidence has important policy and welfare implications

do gasoline prices respond asymmetrically to crude oil price changes the authors test and confirm that retail gasoline prices respond more quickly to increases than to decreases in crude oil prices among the possible sources of this asymmetry are production inventory adjustment lags and market power of some sellers by analyzing price transmission at different points in the distribution chain the authors attempt to shed light on these theories spot prices for generic gasoline show asymmetry in responding to crude oil price changes which may reflect inventory adjustment effects asymmetry also appears in the response of retail prices to wholesale price changes possibly indicating short run market power among retailers

the corporate social performance financial performance link strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management rather than traditional arenas of strategic management using a greatly improved source of data on corporate social performance this paper reports the results of a rigorous study of the empirical linkages between financial and social performance corporate social performance csp is found to be positively associated with prior financial performance supporting the theory that slack resource availability and csp are positively related csp is also found to be positively associated with future financial performance supporting the theory that good management and csp are positively related 1997 by john wiley sons ltd