posterior predictive and utility based approaches to testing the arbitrage pricing theory abstract to provide a framework for judging the economic significance of departures from the arbitrage pricing theory we adopt a utility based metric based on optimal portfolio choices this measure is examined using both predictive and posterior analysis our predictive analysis shows very large and economically significant departures from the model restrictions however the high level of parameter uncertainty suggests that we cannot conclusively either affirm or reject the apt our conclusions differ markedly from other studies which employ traditional significance testing procedures and in many instances fail to reject the apt restrictions

a two stage supply chain coordination mechanism considering price sensitive demand and quantity discounts abstract this paper explores the coordination between a supplier and a buyer within a decentralized supply chain through the use of quantity discounts in a game theoretic model within this model the players face inventory and pricing decisions we propose both cooperative and non cooperative approaches considering that the product traded experiences a price sensitive demand in the first case we study the dynamics of the game from the supplier s side as the leader in the negotiation obtaining a stackelberg equilibrium and then show how the payoff of this player could still improve from this point in the second case a cooperative model is formulated where decisions are taken simultaneously emulating a centralized firm showing the benefits of the cooperation between the players we further formulate a pricing game where the buyer is allowed to set different prices to the final customer as a reaction to the supplier s discount decisions for the latter we investigate the difference between feasibility of implementing a retail discount given a current coordination mechanism and without it finally the implications of transportation costs are analyzed in the quantity discount schedule our findings are illustrated with a numerical example showing the difference in the players payoff in each case and the optimal strategies comparing in each case our results with existing work

a supplier s optimal quantity discount policy under asymmetric information in the supply chain literature an increasing body of work studies how suppliers can use incentive schemes such as quantity discounts to influence buyers ordering behaviour thus reducing the supplier s and the total supply chain s costs various functional forms for such incentive schemes have been proposed but a critical assumption always made is that the supplier has full information about the buyer s cost structure we derive the optimal quantity discount policy under asymmetric information and compare it to the situation where the supplier has full information

the relationship between athletic participation and academic performance evidence from ncaa division iii this paper examines athletes grades and graduation rates at an ncaa division iii institution thirty seven per cent of all college athletes compete in division iii yet this group has received little attention in the literature nontransfer student athletes have higher gpas than nonathletes while transfer student athletes have grades similar to nonathletes graduation rates are higher for athletes thus athletic participation does not impair students academic performance

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

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

evaluating density forecasts with applications to financial risk management density forecasting is increasingly more important and commonplace for example in financial risk management yet little attention has been given to the evaluation of density forecasts the authors develop a simple and operational framework for density forecast evaluation they illustrate the framework with a detailed application to density forecasting of asset returns in environments with time varying volatility finally the authors discuss several extensions copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

a utility based comparison of some models of exchange rate volatility abstract when estimates of variances are used to make asset allocation decisions underestimates of population variances lead to lower expected utility than equivalent overestimates a utility based criterion is asymmetric unlike standard criteria such as mean squared error to illustrate how to estimate a utility based criterion we use five bilateral weekly dollar exchange rates 1973 1989 and the corresponding pair of eurodeposit rates of homoskedastic garch autoregressive and non parametric models for the conditional variance of each exchange rate garch models tend to produce the highest utility on average a mean squared error criterion also favors garch but not as sharply

a generalized quantity discount pricing model to increase supplier s profits in this paper the joint problem of ordering and offering price discount by a supplier to his sole major buyer is analyzed the objective is to induce the buyer to alter his order schedule and size so that the supplier can benefit from lower set up ordering and inventory holding costs we generalize the quantity discount pricing model of monahan monahan j p 1984 a quantity discount pricing model to increase vendor profits management sci 30 6 720 726 to 1 explicitly incorporate constraints imposed on the amount of discount that can be offered and 2 relax the implicit assumption of a lot for lot or order for order policy adopted by the supplier an algorithm is developed to solve the supplier s joint ordering and price discount problem

the specificity of general human capital evidence from college major choice college graduates do not always pursue careers related to their major science majors working in jobs unrelated to their field of study earn approximately 30 lower wages than those working in related jobs we develop a structural model of major choice and labor market outcomes that allows for skill uncertainty and differential accumulation of human capital across major our findings confirm that the average return to obtaining a science degree and working in a related job remains close to 30 we also find that individuals are uncertain about their future productivity at the time of the college major decision

commitment and satisfaction in the classroom and on the field evidence from a division i liberal arts college within higher education there has been a persistent concern that student athlete commitments to their athletic activities are detrimental to their academic studies we collect data on student athl

a stackelberg model of pricing of complementary goods under information asymmetry abstract we consider a duopoly market where two separate firms offer complementary goods in a leader follower type move each firm has private forecast information about the uncertain market demand and decides whether to share it with the other firm we show that information sharing would benefit the leader firm but hurt the follower firm as well as the total system if the follower firm shares information unconditionally we then devise a simple to implement information sharing scheme under which both firms and the total system are better off we also provide several interesting managerial insights and establish the robustness of the model in managing a supply chain through our analytical and simulation results

college selectivity and earnings this article shows that college performance and selectivity have significant effects on earnings it suggests that work that does not include college performance overstates the effect of college se

optimal binary prediction for group decision making we address the problem of optimally forecasting a binary variable for a heterogeneous group of decision makers facing various binary decision problems that are tied together only by the unknown outcome a typical example is a weather forecaster who needs to estimate the probability of rain tomorrow and then report it to the public given a conditional probability model for the outcome of interest e g logit or probit we introduce the idea of maximum welfare estimation and derive conditions under which traditional estimators such as maximum likelihood or nonlinear least squares are asymptotically socially optimal even when the underlying model is misspecified

heterogeneous sports participation and labour market outcomes in england based on a unique composite dataset measuring heterogeneous sports participation labour market outcomes and local facilities provision this article examines for the first time the association between different types of sports participation and employment and earnings in england clear associations between labour market outcomes and sports participation are established through matching estimation while controlling for some important confounding factors the results which are supplemented and supported by a formal sensitivity analysis suggest a link between different types of sports participation to initial access to employment and then higher income opportunities with ageing however these vary between the genders and across sports specifically the results suggest that team sports contribute most to employability but that this varies by age across genders and that outdoor activities contribute most towards higher incomes

asymmetry loss aversion and forecasting conditional volatility models such as garch have been used extensively in financial applications to capture predictable variation in the second moment of asset returns however with recent theoretical literature emphasising the loss averse nature of agents this paper considers models which capture time variation in the second lower partial moment utility based evaluation is carried out on several approaches to modelling the conditional second order lower partial moment or semi variance including distribution and regime based models the findings show that when agents are loss averse

procuring fast delivery sole sourcing with information asymmetry this paper studies a queuing model in which a buyer sources a good or service from a single supplier chosen from a pool of suppliers the buyer seeks to minimize the sum of her procurement and operating costs the latter of which depends on the suppliers lead time the selected supplier can regulate his lead time but faster lead times are costly although the buyer selects the supplier to source from possibly via an auction and dictates the contractual terms the buyers bargaining power is limited by asymmetric information the buyer only has an estimate of the suppliers costs while the suppliers know their costs precisely we identify a procurement mechanism that minimizes the buyers total cost procurement plus operating this mechanism is not simple it is a numerically derived nonlinear menu of contracts therefore we study several simpler mechanisms e g one that charges a late fee and one that specifies a fixed lead time requirement no menus no nonlinear functions we find that simple mechanisms are nearly optimal generally within 1 of optimal because asymmetric information conveys significant protection to the supplier i e the supplier is able to retain most of the benefit of having a lower cost renegotiation is another concern with the optimal mechanism because it does not minimize the supply chains cost the firms can be both better off if they throw away the contract and start over interestingly we find that the potential gain from renegotiation is relatively small with either the optimal or our simple mechanisms we conclude that our simple mechanisms are quite attractive along all relevant dimensions buyers performance supply chain performance simplicity and robustness to renegotiation

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