implications of market structure for elasticity structure though considerable attention has been given to market structure little research has been done on the relationship between market structure and elasticity structure the authors develop and partia

estimating elasticities with pims data methodological issues and substantive implications though the pims data have been used extensively to relate profitability both to specific firm marketing actions and to market conditions no attempt has been made to estimate directly the magnitudes of marketing mix elasticities the authors propose and evaluate a simple cross sectional time series regression method that recovers unbiased estimates of the elasticities despite the presence of firm specific disguise factors in the database though measurement error creates instability for certain variables the recovered elasticities compare favorably with those found in previous research and have predictable relationships with market characteristics

a characterization of erratic dynamics in the overlapping generations model abstract in this paper we characterize and give examples o wide classes of utility functions which generate erratic dynamics in the standard deterministic overlapping generations model erratic dynamics refers to feasible trajectories which are bounded but which do not converge to stationary points or periodic orbits we show that such trajectories are pareto efficient we introduce credit into the model and show how a constant credit expansion rate can result in erratic trajectories in prices and the real value of credit finally we briefly discuss certain technical aspects of the mathematics used and the statistical nature of the dynamics that can arise from deterministic dynamical systems

environment market share and market power in this paper we develop a process model relating market share to firm profits in particular we specify average price and average cost equations as a function of previous year market share position changes in market share environmental conditions and interactions of environmental conditions with the lagged market position and market share change variables we estimate these equations using pims data after controlling for unobservable factors our results suggest that firms with high market shares derive no extra market power benefits except if they operate in environments with little buyer power instead environmental factors and changes in market share most strongly influence price and cost an analysis of the market share associated with maximal firm profits indicates that for the majority of firms in our sample steadily increasing market share does not always associate with increasing profits giving credence to the proposition that more market share is not always better

multiple equilibrium overnight rates in a dynamic interbank market game abstract we analyse a two period model of the interbank market i e the market where banks trade liquidity we assume that banks do not take the interbank interest rate as given but instead negotiate on interest rates and transaction volumes with each other the solution concept applied is the shapley value we show that there are a multiplicity of average equilibrium interest rates of the first period so that the average interest rate in this period does not convey any information on the expected liquidity situation on the interbank market as the banks control not only the transaction volumes but also the interest rates they can leave the interest rates constant and adjust the transaction volumes when for example a liquidity deficit becomes more likely

imperfect competition expectations and the multiple effects of monetary growth in a monetary overlapping generations model with an imperfectly competitive labor market in which output is below its full employment level it is shown that different backward looking rules for forecasting inflation lead to different steady states despite yielding no forecast errors in the steady state and in many cases none in the short or medium run either higher monetary growth raises output in some steady states in others has no effect and in others lowers it this contrasts with ad hoc or competitive macromodels where the absence of forecast errors in the steady state usually defines it and its properties uniquely copyright 1992 by royal economic society

determining the optimal return on investment for an advertising campaign abstract in this this paper we adopt the point of view that advertising is an investment and propose a simple formula for calculating the level of media spending which maximizes the return on investment the information which must be supplied for the calculation is commonly available and we express the optimal expenditure level in terms which are meaningful to media planners we show that when maximizing return on investment not all of the allocated media budget should be spent

game theoretic methods in general equilibrium analysis list of figures list of authors introduction j f mertens a the core and the bargaining set i general equilibrium and cooperative games basic results e allen s sorin ii core convergence in perfectly competitive economies r m anderson iii economies with atoms j f mertens iv bargaining sets r vohra b the value v the shapley value r j aumann vi value of games with a continuum of players a neyman vii the tu value the non differentiable case j f mertens addendum the shapley value of a perfectly competitive market may not exist f lefevre viii the harsanyi value s hart ix value equivalence theorems the tu and ntu cases s hart x economic applications of the shapley value r j aumann c the cooperative approach to large markets and games xi an axiomatic approach to the equivalence phenomenon p dubey a neyman xii large games and economies with effective small groups m h wooders d the non cooperative approach xiii strategic market games a survey of some results p dubey xiv from nash to walras equilibrium e allen h polemarchakis xv correlated and communication equilibria j f mertens xvi notes on correlated equilibrium and sunspot equilibrium j peck xvii implementation with plain conversation s sorin

on competitive cycles in productive economies abstract in a model of overlapping generations with production money and an endogenous labor supply general conditions are given for the existence of two different types of cyclical equilibria the conditions are given in terms of the elasticities of demand for savings and for capital with respect to the interest rate and of the capital consumption ratio at the golden rule steady state examples using ces technologies are also studied

the tax they pay may be your own promotion taxes and labour supply a model of labour supply is formulated in which increased effort results in an increase in the probability of promotion a simple benchmark model is extended in two directions the first emphasizes the link between labour supply and saving decisions the other takes account of the interaction between workers via contests for promotion a general insight that emerges from the analysis is that when studying the effects of wages and taxes on incentives to work it is sometimes the after tax incomes of other workers in particular senior workers who have already been promoted which are of crucial importance

toward a reconciliation of market power and information theories of advertising effects on price elasticity prior work on the economic effects of advertising has presented conflicting views some authors have suggested that advertising creates market power by artificially differentiating brands and thereby lowering price elasticity others have viewed advertising as an efficient source of information about the existence of substitutes arguing that advertising increases price elasticity the present research proposes a unifying theoretical model in which advertising affects price elasticity through its influence on two mediating constructs the size of the consideration set and the relative strength of preference pretests 1 and 2 examine the effects of advertising on these two constructs results from the main experiment show that in accordance with the theoretical framework the same advertisements that increased price elasticity in some decision environments decreased it in others

valuation equilibrium with clubs abstract this paper considers model worlds in which there is a continuum of individuals who form finite sized associations to undertake joint activities we show how through a suitable choice of commodity space restrictions on the composition of feasible groups can be incorporated into the specification of the consumption and production sets of the economy we also show that if there are a finite number of types then the classical results from the competitive analysis of convex finite agent economies can be reinterpreted to apply journal of economic literatureclassification numbers d51 h41

endogenous strategic business cycles this paper examines an overlapping generations version of the shapley shubik market game we show existence of equilibria for the simple one commodity model and analyze the dynamics of the equilibrium trajectories generated in the model because of the non linearities generated by strategic interaction of agents in the model we find that complex and chaotic equilibrium dynamics are possible in this model for a much broader range of preferences than those for which grandmont econometrica53 no 5 1995 995 1045 found complicated dynamics in the perfectly competitive version of this model these results then provide an alternative to the usual technology based explanation for the historical fact that business cycles became an important economic phenomenon only with the onset of industrialization journal of economic literatureclassification numbers c72 c73 d51 l16

deconstructing the pioneer s advantage examining vintage effects and consumer valuations of quality and variety several studies have demonstrated an order of entry effect on market share suggesting that pioneers outperform later entrants however other research has pointed out the limitations of these studies and found evidence that many pioneers fail or have low market share given this background the purpose of this research is to understand the conditions under which pioneers are more likely and also less likely to have an advantage we propose a game theoretic model that includes important sources of pioneer advantages as well as disadvantages specifically we incorporate a pioneer advantage due to preemption in markets with heterogeneous tastes in addition we incorporate a potential pioneer disadvantage due to technology vintage effects where later entrants utilizing improved technology can have lower costs and higher quality the model allows us to evaluate the extent of vintage effects necessary to overcome a pioneer s advantage key relationships are found between the magnitude of the pioneer advantage or disadvantage and consumer valuations of product attributes e g variety and quality we empirically validate the model with vintage effect data in 36 product categories and measures of consumer valuations of product variety and quality for 12 of these 36 categories the results show that pioneers do better in product categories wherevariety is more important and worse in categories where productquality is more important pioneers in categories with high vintage effects are shown to have lower market shares and higher failure rates similar results appear when analyzing persistence of market leadership over time further validating our model s major implications we also present two case studies that illustrate key elements of the model

a look on the cost side market share and the competitive environment in this paper we develop a model relating market share to average costs we start with a theoretical model of the factors that affect the firm s average cost curve partitioning these factors into a measurable firm and competitive environment characteristics and b unobserved factors that are either fixed random or follow a first order autoregressive process we then link this theoretical model to an empirical model in which we specify three average cost equations for the organizational areas of purchasing production and marketing main effects for initial lagged market share position as well as their interactions with factors characterizing the firm s competitive environment represent the variables of key theoretical interest in our equations we estimate these equations using pims data and control for fixed contemporaneous and autoregressive unobservable factors our results suggest that market share can often lead to market power in the form of lower average costs however the firm s operating environment greatly moderates the effect of market share on average cost in particular we find that market share position only leads to lower average costs when the organizational unit operates in a competitive environment that gives it both motivation and ability to realize power from its market share position

markets correlation and regret matching inspired by the existing work on correlated equilibria and regretbased dynamics in games we carry out a first exploration of the links between the leading equilibrium concept for exchange economies walrasian equilibrium and the dynamics specifically regret matching dynamics of trading games that fit the economic structure and have the property that their pure nash equilibria implement the walrasian outcomes interestingly in the case of quasilinear utilities or transferable utility all the concepts essentially coincide and we get simple deterministic dynamics converging to walrasian outcomes connections to sunspot equilibria are also studied

market uncertainty correlated and sunspot equilibria in imperfectly competitive economies first version received june 1988 final version accepted november 1990 eds an imperfectly competitive economy is very prone to market uncertainty including uncertainty about the liquidity or thickness of markets we show in particular that there exist stochastic equilibrium outcomes in nonstochastic market games if and only if the endowments are not pareto optimal we also provide a link between extrinsic uncertainty arising in games e g correlated equilibria and extrinsic uncertainty in market economies e g sunspot equilibria a correlated equilibria to the market game is either a sunspot equilibrium or a non sunspot equilibrium to the related securities games but the converse is not true in general

correlated equilibrium as an expression of bayesian rationality if it is common knowledge that the players in a game are bayesian utility maximizers who treat uncertainty about other players actions like any other uncertainty then the outcome is necessarily a correlated equilibrium random strategies appear as an expression of each player s uncertainty about what the others will do not as the result of willful randomization use is made of the common prior assumption according to which differences in probability assessments by different individuals are due to the different information that they have where information may be interpreted broadly to include experience upbringing and genetic makeup copyright 1987 by the econometric society

irregular growth cycles this paper uses the familiar neoclassical theory of capital accumulation to show how complex behavior can emerge from quite simple economic structures indeed when sufficient nonlinearities and a production lag are present the interaction alone of the propensity to save and the productivity of capital can lead to growth cycles that exhibit a wandering sawtooth pattern not unlike those observed in reality these fluctuations need not converge to a cycle of any regular periodicity so they are not quasi periodic because such chaotic trajectories are unstable errors of estimation in parameters or initial conditions however tiny will accumulate rapidly into substantial errors of forecast moreover periods of erratic cycling can be interspersed with periods of more or less stable growth evidently the future behavior of a model solution cannot be anticipated from its patterns in the past a situation that seems to mimic experience apparent structural change and unpredictability is explained in the present theory by a deterministic single equation model random shocks play no role so the reader can visualize just what it is we are are talking about a noteworthy simulation is presented in figure 1 for gnp in a growth model that is described below in section iii a period of relatively rapid growth is followed by a period of cycles then remarkably for a considerable time about twenty periods apparently steady state growth occurs wandering cycles however emerge another brief period close to the steady state appears again toward the end of the series i establish conditions of savings and productivity that lead to results of this kind this analysis makes use of the mathematical theory of chaos which in the form exploited here originated in the work of edward lorenz a formal definition of chaos and sufficient conditions for chaotic trajectories were provided in a seminal paper by t y li and james yorke a survey of these related contributions is found in yorke and evelyn yorke this theory was introduced into economics by jess benhabib and myself 1981 where we showed that sequences of rational choices can be erratic when preferences depend on experience in a certain way by michael stutzer who provides a detailed analysis of trygve haavelmo s growth model by benhabib and myself 1980 in an application of the overlapping generations model and in my forthcoming study of the classical growth model

inflation capital markets and household saving in the nordic countries household saving ratios in the nordic countries are very low by international standards and have declined markedly during the 1980s aggregate quarterly time series data for the period 1970 89 are used to study the development of household saving behavior over time the evidence suggests that the household saving ratio responds positively to both the inflation rate and real income growth there is also some weak evidence to support the view that the rate of change in real housing prices has a negative effect on household saving ratios copyright 1992 by the editors of the scandinavian journal of economics

monopolistic competition business cycles and the composition of aggregate demand abstract we develop a dynamic general equilibrium model with monopolistically competitive firms and endogenous markups and show the possibility of equilibria with persistent fluctuations driven by self fulfilling revisions of expectations for some parameter values such fluctuations are characterized by time series properties similar to those observed in u s postwar business cycles in contrast with the existing literature our results do not rely on the presence of increasing returns or nominal rigidities a key ingredient of the model is the link between markups and the composition of aggregate demand some econometric evidence on the latter is also reported journal of economic literature classification number d43 d58 e32

correlated equilibrium in stochastic games we study the existence of uniform correlated equilibrium payoffs in stochastic games the correlation devices that we use are either autonomous they base their choice of signal on previous signals but not on previous states or actions or stationary their choice is independent of any data and is drawn according to the same probability distribution at every stage we prove that any n player stochastic game admits an autonomous correlated equilibrium payoff when the game is positive and recursive a stationary correlated equilibrium payoff exists journal of economic literature classification numbers c72 c73

the strategic marshallian cross we prove existence and uniqueness of non autarkic equilibria in bilateral oligopoly assuming only that preferences are binormal and satisfy a weakened version of gross substitutes we permit complete heterogeneity of preferences and our analysis exploits the fact that payoffs depend only on own strategy and two universal aggregates this allows us to define strategic versions of supply and demand curves such that non autarkic nash equilibria are in 1 1 correspondence with intersections of these curves the same approach can be used to establish comparative statics under the assumptions above as examples we focus on adding players and changing endowments this competitive approach also allows us to conclude that much of conventional marshallian analysis is robust to strategic manipulation strategic marshallian cross strategic manipulation imperfect competition

on endogenous competitive business cycles the belief that the long run equilibrium of a competitive monetary economy that does not experience any exogeneous shocks whether originating from the external environment or from policy should be modelled as a state that is stationary or perhaps growing at a constant rate seems to be deeply rooted in the mind of some economists

the relationship between market characteristics and promotional price elasticities many empirical studies in marketing and economics have estimated brand price elasticities for specific products in markets their results indicate that price elasticities seem to differ across brands product categories retail outlets and regions however there has been very little research which examines the factors associated with these observed differences this paper focuses on the promotional price elasticities of established major brands in stable categories it identifies some characteristics of markets which may be associated with differences in price elasticities for frequently purchased nondurables a cross sectional model of the effect of these market characteristics on price elasticities is developed and estimated utilizing own price elasticity estimates for brands at twelve stores the results indicate market characteristics such as brand market share couponing activity display activity and feature activity explain a substantial amount of the variation in promotional price elasticities

work incentives hierarchy and internal labor markets this paper argues that contracts with payment based on a ranking of employee performance can provide performance incentives even under asymmetric information that prevents payment based on individual performance only being enforceable such contracts also fit with five features of labor markets that have aroused considerable interest 1 hierarchical wage structures 2 internal promotion 3 wage rates that rise with seniority and experience more than productivity 4 the variance of earnings increasing with experience and 5 wage rates attached to jobs rather than individuals with differentials set by administrative procedures rather than by reference to external market wages

estimating automotive elasticities from segment elasticities and first choice second choice data of the share lost to one product because of a price change diversion fractions are the fractions of that lost share going to each of the other products this paper expresses product cross elasticities in terms of diversion fractions and a scaling factor since the automotive market includes more than two hundred products time series data are insufficient for estimating all elasticities instead this paper estimates automotive elasticities by specifying the diversion fractions using cross sectional first choice second choice data and estimating the remaining scaling factor and own elasticities using more aggregate elasticities estimated from time series copyright 1993 by mit press

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

imperfectly competitive cycles with keynesian and walrasian features abstract we consider a multi sector overlapping generations model with oligopolistic firms in the output markets and wage setting trade unions in the labour markets a coordination problem between firms creates multiple temporary equilibria which are either walrasian or of the keynesian unemployment type there exist many deterministic and stochastic equilibrium cycles fluctuating between keynesian recession and walrasian boom periods with arbitrarily long phases in each regime the cycles are in accordance with certain empirical regularities money is neutral and superneutral but appropriate countercyclical fiscal policies stabilize the cycles in a textbook keynesian way

non linear endogenous fluctuations with free entry and variable markups abstract the paper explores the effects of markup variability associated with free entry of cournotian firms on the occurrence of local indeterminacy local hopf bifurcations and multiplicity of steady states it uses an overlapping generations model with capital in which differentiated intermediate goods are produced with constant marginal cost plus a positive fixed cost if the markup factor were constant the case of no free entry or the case of zero fixed costs leading to the perfectly competitive outcome no local endogenous fluctuations or multiplicity of steady states can emerge unless factors of production are complementary on the contrary with any positive variable market power indeterminacy and multiplicity of steady states is possible for any value of the elasticity of technological substitution and local hopf bifurcations may also emerge provided variable market power is high enough

endogenous imperfectly competitive business cycles abstract we investigate how imperfect competition affects the occurrence and the properties of endogenous rational expectations business cycles in an overlapping generations model with constant returns to scale in production the model has explicit product and labor markets all characterized by monopolistic competition an implicit assumption of barriers to entry justifies that the number of firms is fixed even when positive profits occur it turns out that both market power of firms on the product markets and market power of unions on the labor markets make the occurrence of cycles more likely in particular imperfect competition on the product markets and the positive profits associated with it may have the effect that there is a cycle even if the labor supply curve is increasing in the real wage rate for competitive cycles is required not only a decreasing labor supply curve but a wage elasticity below 1 2 at stationary equilibrium market power on the labor markets may have the effect that imperfectly competitive cycles are in accordance with certain empirical regularities some well known some reported in the paper concerning fluctuations in output and involuntary unemployment since involuntary unemployment does not occur under perfect competition such regularities are incompatible with competitive cycles

personal selling elasticities a meta analysis abstract this article presents a meta analysis of prior econometric estimates of personal selling elasticity that is the ratio of the percentage change in an objective ratio scaled measure of sales output e g dollar or unit purchases to the corresponding percentage change in an objective ratio scaled measure of personal selling input e g dollar expenditures the authors conduct a meta analysis of 506 personal selling elasticity estimates drawn from analyses of 88 empirical data sets across 75 previous articles they find a mean estimate of current period personal selling elasticity of 34 they also find that elasticity estimates are higher for early life cycle stage offerings higher from studies set in europe than from those set in the united states and smaller in more recent years in addition elasticity estimates are affected significantly by analysts use of relative rather than absolute sales output measures by cross sectional rather than panel data by omission of promotions by lagge

equilibrium cycles in an overlapping generations economy with production abstract perfect foresight equilibrium trajectories of an overlapping generations model with production may include stable or unstable invariant closed curves these orbits are detected using the hopf bifurcation theorem where the parameter of bifurcation is purely technological the paper also proves that there is a stabilization policy that completely eliminates the cycle finally using a c e s production function it is shown that the range of values of the elasticity of substitution between capital and labor for which cycles may exist is bounded above

intertemporal cournot and walras equilibria an illustration in an intertemporal general equilibrium framework we compare a cournot equilibrium to the walras equilibrium the cournot agents trade and invest less than the walras agents this generates an inefficiency that does not vanish as the number of cournot agents tends to infinity a larger number of strategic cournot agents implies that the amount of trade relative to their aggregate consumption increases i e it moves towards the walrasian amount but their investment relative to the stock decreases i e it moves away from the walrasian amount s il y avait 3 4 n producteurs en concurrence la valeur de

choice under uncertainty problems solved and unsolved ffifteen years ago the theory of choice under uncertainty could be considered one of the success stories of economic analysis it rested on solid axiomatic foundations it had seen important breakthroughs in the analytics of risk risk aversion and their applications to economic issues and it stood ready to provide the theoretical underpinnings for the newly emerging information revolution in economics 1 today choice under uncertainty is a field in flux the standard theory is being challenged on several grounds from both within and outside economics the nature of these challenges and of our profession s responses to them is the topic of this paper

a model of imperfect competition with keynesian features the recent literature on the reappraisal of keynes has viewed keynesian equilibria as arising when prices are fixed and effective demands and supplies are equilibrated through the adjustment of quantities one problem with this approach is that it lacks a theory of price determination in particular of why prices are fixed in the present paper we show that a number of keynesian features arise in a model in which prices are fully flexible but where agents have some monopoly power one advantage of this approach is that it provides a theory of the determination of both prices and quantities

chapter 9 econometric and time series market response models publisher summary marketing has seen a rapid expansion in the widespread use of quantitative methods correlation and regression analysis were among the first techniques used as marketing research emerged as a discipline after world war ii in the early 1970s regression analysis became econometrics simultaneous equation systems could be estimated almost as easily as single regression equations while econometrics as a whole continues to flourish as new and more sophisticated estimation techniques and associated computer software have become available simultaneous equation systems have not become widely prevalent the dynamic structure of marketing variables themselves is addressed in the chapter followed by discussions of leads and lags among marketing variables and the assessment of the direction of causality dynamic properties of sales response functions have been discussed in more detail marketing generalizations that have been uncovered as well as empirical evidence on the shape of the sales response function is reported

risk assessment and profit sharing in business networks abstract nowadays network is the preferred governance form to conduct economic transactions network solution allows to reach flexibility maintaining cost and quality level since network concept refers to a great variety of organizational hybrids it is possible to choose the one that fits better market requirements the new trends in inter organization relationships push towards network solutions companies are interested in relationships with partners and customers to overcome resource dependence to enter too risky market or simply differentiate their business portfolio the proposed research focuses on the network concept aiming at highlighting threats and opportunities to investigate the double nature of the risk concept network structures offer flexibility and higher profit as a consequence and business risk sharing opportunity these two aspects profit and risk are strictly related and have to be considered together to depict a complete scenario this implies that risk assessment and management in network environment cannot neglect profit sharing or in other words that profit sharing mechanisms should use risk as driver in this context our research proposes a methodology to measure risk taking into account network peculiarities risk estimation is a basic step to evaluate the opportunity cost of capital needed to compute the network net present value npv that is assumed as base in the profit sharing process the profit sharing process has been tackled using the shapley value approach that is inspired to the fairness principle while the opportunity cost of capital is assessed using the capital asset pricing model capm

sunspots correlation and competition correlated equilibria in strategic market games played simultaneously by overlapping generations of players correspond to sunspot equilibria in the associated competitive economy we provide a necessary and sufficient condition for existence of effective correlation an increase in the number of agents in a given economy may allow for effective correlation

tiebout economies with differential genetic types and endogenously chosen crowding characteristics abstract we consider a tiebout economy with differential crowding and public projects in which agents are distinguished by their tastes and genetic endowments agents choose which crowding characteristic for example a skill they wish to express and this affects their value to other members of their jurisdiction club firm etc an agent s choice is influenced both by his genetic endowment which affects his cost of acquiring crowding characteristics and by his preferences over which crowding characteristic he expresses we show that if small groups are strictly effective the core is equivalent to the set of anonymous competitive equilibrium outcomes but that the core generally contains taste homogeneous jurisdictions journal of economic literature classification numbers h41 h72

effort taxation and unemployment abstract the importance of the design of the income tax system for the incentive to supply effort is considered in a situation where firms set wages a tax reform raising marginal taxes at all income levels and increasing decreasing average taxes at high low income levels may lead to higher wages lower employment and higher unemployment

modeling competitive marketing strategies the impact of marketing mix relationships and industry structure this paper empirically analyzes the formulation of competitive marketing strategies consisting of product quality levels promotional expenditures and prices using a simultaneous equation model we examine the use of prices and promotional spending as signals or indications of product quality the impact of promotional spending on prices and the impact of industry structure on the formulation of the complete marketing mix the structural equations are developed using a theoretical model of optimal competitive marketing mix and are estimated using business level pims data which consists largely of industrial durable goods producers for a cross section of 1 100 of these businesses three results of the estimation are especially interesting price cost margins are high for high quality products suggesting that high prices indicate or signal high quality promotional intensity is unrelated to product quality suggesting that promotional effort provides no reliable signals of quality intensely promoted products earn low price cost margins however indicating that promotional spending is associated with high price sensitivity quality levels promotional intensity and price cost margins vary significantly with competitive and market conditions such as the concentration of competitors and the stability of market shares although these relationships are generally weaker than relationships between quality promotion and price cost margins quality levels are high and margins low in markets with unstable shares or unconcentrated competitors

correlated equilibria and sunspots we examine when sunspots uncertainty that has no influence on endowments preferences or technology can affect equilibrium in a simple two period two commodity two class economy we find that such an effect is possibly only if the signals random variables that different agents observe are imperfectly correlated neither perfectly correlated nor independent and at least one commodity is a giffen good for two special cases we characterize the set of equilibria due to sunspots we conclude by showing the intimate connection between the sunspot equilibria of our finite horizon model and those of the overlapping generations literature

on the effectiveness of economic policy when competition is imperfect and expectations are rational abstract we study the consequences of imperfect competition in a macro model with only one imperfection that of labor market competition otherwise the model is clean agents are optimizers prices are endogenous and expectations are rational we show that although imperfect competition in itself can explain unemployment as is well known it does not in itself give strong support to the use of traditional fiscal policy in fighting unemployment fiscal policy will almost inevitably have real effects but only through a special effect that may be difficult to control in many cases fiscal policy cannot create full employment and it may very well have perverse effects

an empirical pooling approach for estimating marketing mix elasticities with pims data the pims profit impact of marketing strategies data entail sparse time series observations for a large number of strategic business units sbus in order to estimate disaggregate marketing mix elasticities of demand a natural solution is to pool different sbus the traditional a priori approach is to pool together those sbus which one believes in advance to be very similar with respect to their marketing mix elasticities we propose an alternative maximum likelihood latent pooling method for simultaneously pooling estimating and testing linear regression models empirically this method enables the determination of a fuzzy pooling scheme while directly estimating a set of marketing mix elasticities and intertemporal covariances for each pool of sbus our analyses reveal different magnitudes and patterns of marketing mix elasticities for the derived pools pool membership is influenced by demand characteristics business scope and order of market entry