women s work sibling competition and children s school performance this research offers an interpretation of the relationship between fertility child spacing family resources and market work by mothers and the subsequent cognitive skills of grade schoolers as reported by their teachers first an approach to fertility as the outcome of a deliberate choice process is developed and then empirical evidence from a small panel of u s households first interviewed in 1975 76 when they had preschool children is presented in a 1981 82 reinterview a supplementary project was that of obtaining teacher ratings of school performance of individual children large family size as measured by the number of siblings of given age and sex in the household during preschool years in 1975 76 has an important negative impact on the child s subsequent grade school performance boy siblings in nearby age ranges have the most negative impact on performance while teenage siblings of either sex have no systematic adverse effect parental resources as measured by income education child care time and a mother s reduced market time are associated with greater cognitive skills and can offset the apparent disadvantage of having siblings in nearby age intervals there appears to be a significant tradeoff between a market career and a home career for women women who have more children spaced over wider age intervals and who devote more time to child care and less to market work presumably get more benefits from their home career in the form of enhanced child development on the other hand full time market work i e hours in the labor market for pay is important for earnings growth of the mother mary corcoran greg duncan and michael ponza 1983 and family income has a favorable effect on school performance so the apparent choices facing women are more equivocal

shirking or productive schmoozing wages and the allocation of time at work this study uses detailed time diaries from household surveys for 1975 and 1981 to examine how changes in the use of time on the job affect earnings among nonunion workers the marginal minute of break time apparently increases earnings but not as much as does the marginal minute of work time among union workers additional time in unscheduled breaks appears to be associated with significantly higher earnings though other break time is not the author concludes that further growth in on the job leisure would reduce productivity that monitoring workers would yield returns to the firm but that entirely eliminating breaks would be counterproductive

a longitudinal analysis of white women s wages according to human capital theory women s work participation decisions will strongly affect their wages and wage growth we test human capital predictions about how labor force withdrawals both past and prospective part time work experience and working in male rather than in female jobs affect wages and wage growth for white women we do this by estimating a wage change model for the years 1967 1979 for a national sample of white women we find that wages drop immediately following withdrawals but that this is followed by a rapid wage growth so that the net loss in wages from dropping out of the labor force is small we further find that wage growth is not significantly lower in female than in male jobs but that part time work experience does not lead to significant wage growth in either male or female jobs

home alone supervision after school and child behavior as female participation in the labor force continues to grow in the us so too does reliance on non parental child care however the high cost of child care has impeded the ability of many working mothers to find sufficient child care for their children as a result as recently as 1998 over eight million children ages five to 14 spent time without adult supervision on a regular basis in the us i examine the effect of the lack of adult supervision after school on a panel of school age children using ordinary least squares and fixed effect estimation i find that children with adult supervision are less likely to skip school use alcohol or marijuana steal something or hurt someone these findings suggest that expanding after school or child care programs typically geared to preschool age children to accommodate more school age children may have important consequences for their human capital development and labor market outcomes later in life

the rosse panzar statistic and the lerner index in the short run abstract the lerner index or price cost margin is derived in terms of the rosse panzar statistic thereby broadening our understanding of the latter and affording a way of empirically estimating the former

programme evaluation with multiple treatments this paper reviews the main identification and estimation strategies for microeconometric policy evaluation particular emphasis is laid on evaluating policies consisting of multiple programmes which is of high relevance in practice for example active labour market policies may consist of different training programmes employment programmes and wage subsidies similarly sickness rehabilitation policies often offer different vocational as well as non vocational rehabilitation measures first the main identification strategies control for confounding variables difference in difference instrumental variable and regression discontinuity identification are discussed in the multiple programme setting thereafter the different nonparametric matching and weighting estimators of the average treatment effects and their properties are examined download discussion paper pdf 484 kb

does early child care affect children s development we study how early child care ecc affects children s development in a marginal treatment effect framework that allows for rich forms of observed and unobserved effect heterogeneity exploiting a reform in germany that induced school districts to expand ecc at different points in time we find strong but diverging effects on children s motor and socio emotional skills children who were most likely to attend ecc benefit in terms of their motor skill development children who were least likely to attend ecc gain in terms of their socio emotional skill development especially boys and children from disadvantaged families such as those with low education or migration backgrounds simulating expansions of ecc we find that a moderate expansion fosters motor skills for all children and language skills for boys and immigrant children a progressive expansion of ecc improves all children s socio emotional development but neither their motor skills nor their language skills

is universal child care leveling the playing field abstract we assess the case for universal child care programs in the context of a norwegian reform which led to a large scale expansion of subsidized child care we use non linear difference in differences methods to estimate the quantile treatment effects of the reform we find that the effects of the child care expansion were positive in the lower and middle parts of the earnings distribution of exposed children as adults and negative in the uppermost part we complement this analysis with local linear regressions of the child care effects by family income we find that most of the gains in earnings associated with the universal child care program relate to children of low income parents whereas upper class children actually experience a loss in earnings in line with the differential effects by family income we estimate that the universal child care program substantially increased intergenerational income mobility to interpret the estimated heterogeneity in child care effects we examine the mediating role of educational attainment and cognitive test scores and show that our estimates are consistent with a simple model where parents make a tradeoff between current family consumption and investment in children taken together our findings could have important implications for the policy debate over universal child care programs suggesting that the benefits of providing subsidized child care to middle and upper class children are unlikely to exceed the costs our study also points to the importance of universal child care programs in explaining differences in earnings inequality and income mobility across countries and over time

infant health and the labor supply of mothers this study examines the association between maternal employment and infant feeding and the health of children and the role of prices wages and other exogenous factors in influencing the association in the philippines data were obtained from the 1983 86 cebu longitudinal health and nutrition survey of 2868 women who were permanent residents of the sample areas and had given birth to a single live child in metro cebu during 1983 84 analysis is based on the conceptual framework in which infant feeding and labor supply are jointly chosen to maximize the utility subject to time budget and health production function constraints findings indicate that the labor supply of the mother had little direct effect on infant health when prices wages and other exogenous factors are taken into account maternal wage rates and prices of key foods affected labor supply and infant feeding and care women with better wage offers were more likely to work and to have healthier infants maternal labor supply only had statistically significant effects on infant health when occupation was accounted for it is suggested that women in developing countries should not be discouraged from working womens earnings increase their ability to pay for food and breast milk substitutes that contribute to healthy infants the authors suggest that other health outcomes such as infant morbidity and mortality could be examined or substitutions for other feeding patterns and child care options

longer term effects of head start specially collected data on adults in the panel study of income dynamics are used to provide evidence on the longer term effects of head start an early intervention program for poor preschool age children whites who attended head start are relative to their siblings who did not significantly more likely to complete high school attend college and possibly have higher earnings in their early twenties african americans who participated in head start are less likely to have been booked or charged with a crime there is some evidence of positive spillovers from older head start children to their younger siblings language en

evaluating the effects of childcare policies on children s cognitive development and maternal labor supply to explore the role of childcare policies in the development of early cognitive skills this paper jointly estimates a cognitive achievement production function and a dynamic discrete choice model of maternal labor supply and childcare decisions using counter actuals from the model i investigate how the designs of two childcare programs head start and childcare subsidies affect the formation of cognitive skills through maternal work and childcare decisions the results suggest large impacts on cognitive skills from expanding head start to current noneligibles and negligible impacts of subsidies on cognitive skills of current eligibles abstract from author

multidimensional incentive compatibility and mechanism design abstract incentive compatibility conditions are characterized in general for problems in which several goods are to be allocated and agents types are multidimensional two questions of monopoly pricing under multidimensional uncertainty are then analyzed first we find the optimal nonlinear pricing scheme when the monopolist knows only the distribution of an arbitrarily parameterized family of demand curves and second we solve for the optimal bundling policy for a multiproduct monopolist

multiproduct nonlinear pricing with multiple taste characteristics we analyze optimal multiproduct nonlinear prices in the case where consumer tastes are characterized by more than one taste parameter we present conditions under which the optimal nonlinear price schedule can be computed by finding optimal price schedules separately for each market if so they are unbundled if not they are bundled bundling is weakly superior to unbundling and is strictly superior when a condition that we term uniform ordering of demand curves is weakly violated with uniform ordering of demand curves multiproduct nonlinear prices have the same features as single product ones without this condition it is easy to construct examples that contradict some well known results from the standard literature in mechanism design

innis lecture universal early childhood interventions what is the evidence base universality is a hallmark of canadian social policy for very young children the evidence base for these policies is small non experimental and offers mixed results in contrast the evidence base for targeted early childhood interventions is largely experimental and offers strong guidance policy makers and advocates often cite the research on targeted programs in support of universal programs although this is problematic for a number of reasons universal programs require a better understanding of the developmental trajectories of more advantaged children evidence from the nlscy suggests there are some potentially important differences in the association of early and later childhood developmental outcomes by family economic resources l universalite est une caracteristique de la politique sociale canadienne pour la petite enfance les resultats sur lesquels on peut construire ces politiques sont minces et non experimentaux et pas toujours coherents d autre part les resultats pour les interventions ciblees sont largement experimentaux et fournissent des directions claires les definisseurs de politiques ainsi que leurs supporteurs citent souvent les resultats de recherches sur les programmes cibles pour articuler leur support pour des programmes universels meme si c est problematique pour diverses raisons les programmes universels reclament une meilleure comprehension des trajectoires de developpement des enfants plus avantages les resultats de l enquete longitudinale nationale sur les enfants et les jeunes suggerent qu il y a des differences potentiellement importantes dans le developpement des enfants de familles qui ont des ressources economiques differentes

understanding day care enrolment gaps abstract we document gaps in day care enrolment by family background in a country with a universal day care system germany research demonstrates that children of parents with lower educational attainment and children of migrant parents may benefit the most from day care making it important to understand why such enrolment gaps exist we use a unique data set that records both parental demand for day care and actual usage to investigate determinants using complementary decomposition and quasi experimental analyses our decomposition shows that a differences in demand are important but do not fully explain the enrolment gaps b large shares of the gaps are unexplained especially for migrant parents and c the heterogeneous effects of access barriers shortages and fees may explain some of the remaining gaps our quasi experimental design finds that reducing shortages significantly decreases the enrolment gap by parental education but not by parental migrant status similarly using the synthetic control method we show that a reduction of fees reduces only the gap by parental education we discuss implications for policy

competition in banking and the lending channel evidence from bank level data in asia and latin america abstract this paper examines how banking competition affects the transmission of monetary policy through the bank lending channel we apply a two step estimation procedure using bank level panel data for commercial banks in 10 asian and 10 latin american countries during the period from 1996 to 2006 in the first step we measure the degree of banking competition by applying the methodology proposed by panzar and rosse 1987 in the second step we estimate a loan growth equation where the explanatory variables include the panzar rosse measure of banking competition the estimation results provide consistent evidence that increased competition in the banking sector weakens the transmission of monetary policy through the bank lending channel this is especially true for banks in latin american countries and banks of small size low liquidity and low capitalization we also discuss the policy implications of the main findings of this paper

the scandinavian fantasy the sources of intergenerational mobility in denmark and the us this paper examines the sources of differences in social mobility between the us and denmark measured by income mobility denmark is a more mobile society but not when measured by educational mobility there are pronounced non linearities in income and educational mobility in both countries greater danish income mobility is largely a consequence of redistributional tax transfer and wage compression policies while danish social policies for children produce more favorable cognitive test scores for disadvantaged children they do not translate into more favorable educational outcomes partly because of disincentives to acquire education arising from the redistributional policies that increase income mobility

an antitrust analysis of bundled loyalty discounts abstract consider a monopolist in one market that faces competition in a second market bundled loyalty discounts in which customers receive a price break on the monopoly good in exchange for making all purchases from the monopolist have ambiguous welfare effects such discounts should not always be treated as a form of predatory pricing in some settings they act as tie in sales existing tests for whether such discounts violate competition laws do not track changes in consumer surplus or total surplus we apply a new test to an illustrative example based on smithkline that assumes the tied market has homogeneous goods if the tied market is characterized by hotelling competition bundling by the monopolist causes the rival firm to reduce its price in numerical examples we find that this can deter entry or induce exit

monopoly with incomplete information recent theoretical research on principal agent relationships has emphasized incentive problems that arise when the parties involved are constrained by either asymmetric information or their inability to monitor each other s actions here we concentrate on the former constraint and consider the case of a single principal the monopolist the main contribution is to show that under a separability assumption strong conclusions can be drawn about the nature of optimal incentive schemes although the primary focus is on optimal quantity discounts in a monopolized market the results also shed light on related topics such as optimal income taxation and commodity bundling

regulate one service tame the entire market credit cards in turkey abstract in credit card markets banks provide both payment and credit services two regulations were recently enacted in the turkish credit card market one on payment services in 2005 and the other on credit services in 2006 by employing the well known panzar and rosse 1982 panzar and rosse 1987 method and a unique quarterly data set for 21 turkish banks between 2002 and 2008 we investigate the extent of banks market power in the turkish credit card market before and after the regulations unlike most of the existing literature which considers competition and regulation for either credit or payment services and ignores the externalities between them we consider the entire market by taking both services into account fixed effects estimations reveal that banks enjoyed collusive oligopoly power before the regulations although the first regulation did not have much impact the second led to rises in both banks total revenues and competition in the entire market

the panzar rosse revenue test and market power in banking abstract the panzar rosse h statistic is a commonly used measure of market power in banking it is widely believed that h 0 is inconsistent with significant market power this study rigorously disproves that perception instead the possibility of h 0 under conditions of substantial market power turns out robust to the timing of banks actions relative costs choice of strategic variable degree of product differentiation strategy static or dynamic and degree of heterogeneity in banks conduct collusive versus fringe and hence may be common in practice

child care choices and children s cognitive achievement the case of single mothers we evaluate the effect of child care versus maternal time inputs on child cognitive development using single mothers from the nlsy79 to deal with nonrandom selection of children into child care we exploit the exogenous variation in welfare policy rules facing single mothers in particular the 1996 welfare reform and earlier state level policy changes generated substantial increases in their work child care use we construct a comprehensive set of welfare policy variables and use them as instruments to estimate child cognitive ability production functions in our baseline specification we estimate that a year of child care reduces child test scores by 2 1

competition and innovation evidence from financial services abstract this paper presents new evidence on the relationship between competition and innovation by extending previous literature from manufacturing to financial services we introduce a new measure of overall innovation by estimating and enveloping annual minimum cost frontiers to create a global frontier the distance to the global frontier constitutes each bank s technology gap which decreases if the bank manages to innovate our innovation measure enables us to derive and estimate the model of aghion et al 2005b at the firm level for the us banking industry based on individual bank call report data for the period 1984 2004 consistent with theoretical and empirical work by aghion et al we find evidence of an inverted u relationship between competition and innovation that is robust over several different specifications further evidence on major structural changes in the us banking industry indicates that banks moved beyond their optimal innovation level and that interstate banking deregulation resulted in lower bank innovation policy implications to financial reform and prudential regulation are discussed also

dynamic duopolistic competition with sticky prices the authors study duopolistic competition in a homogeneous good through time under the assumption that its current desirability is an exponentially weighted function of accumulated past consumption this implies that the current price of the good does not decline by as much to accommodate any given level of current consumption our an alysis is conducted in terms of a differential game it is found that the equilibrium price corresponding to the open loop nash equilibriu m strategies approaches the static cournot equilibrium price while th e equilibrium price corresponding to the closed loop nash equilibrium strategies which are subgame perfect approaches a price below it copyright 1987 by the econometric society

customized bundle pricing for information goods a nonlinear mixed integer programming approach this paper proposes using nonlinear mixed integer programming to solve the customized bundle pricing problem in which consumers are allowed to choose up to n goods out of a larger pool of j goods prior work has suggested that this mechanism has attractive features for the pricing of information and other low marginal cost goods although closed form solutions exist for this problem for certain cases of consumer preferences many interesting scenarios cannot be easily handled without a numerical solution procedure in this paper we investigate the efficiency gains created by customized bundling over the alternatives of pure bundling or individual sale under different assumptions about customer preferences and firm cost structure as well as the potential loss of efficiency caused by pricing with incomplete information about consumer reservation values our analysis suggests that customized bundling enhances sellers profits and enhances welfare when consumers do not place positive values on all goods and that this consumer characteristic is much more important than the shape of the valuation distribution in determining the optimal pricing scheme we also find that customized bundling outperforms both pure bundling and individual sale in the presence of incomplete information and that customized bundling still outperforms other simpler pricing schemes even when exact consumer valuations are not known ex ante

competition conduct and demand elasticity abstract this paper demonstrates the relationship between the rosse panzar test for competitive conduct and the firm s elasticity of demand and develops a method of increasing the test s discriminating power

enjoying the quiet life under deregulation evidence from adjusted lerner indices for u s banks abstract the quiet life hypothesis posits that firms with market power incur inefficiencies rather than reap monopolistic rents we propose a simple adjustment to lerner indices to account for the possibility of forgone rents to test this hypothesis for a large sample of u s commercial banks we find that adjusted lerner indices are significantly larger than conventional lerner indices and trending upward over time instrumental variable regressions reject the quiet life hypothesis for cost inefficiencies however lerner indices adjusted for profit inefficiencies reveal a quiet life among u s banks

does head start help hispanic children abstract poor educational attainment is a persistent problem among us hispanic children relative to non hispanics many of these children are immigrants and or come from households that use a minority language in the home this paper examines the effects of participation in a government sponsored preschool program called head start on these children we find that large and significant benefits accrue to head start children when we compare them to siblings who did not participate in the program on average head start closes at least 1 4 of the gap in test scores between hispanic children and non hispanic white children and 2 3 of the gap in the probability of grade repetition however we find that the benefits of head start are not evenly distributed across sub groups

competition and risk in south east asian commercial banking this article investigates the effects of competition on bank risk taking behaviour in four south east asian countries indonesia malaysia philippines and vietnam our main finding is that competition does not increase bank risk taking behaviour and the results appear robust to different model specifications estimation approaches and variable construction we also find that concentration is inversely related to bank risk whereas regulatory restrictions positively influence bank risk taking

non cognitive child outcomes and universal high quality child care exploiting a rich panel data child survey merged with administrative records along with a pseudo experiment generating variation in the take up of pre school across municipalities we provide evidence of the effects on non cognitive child outcomes of participating in large scale publicly provided universal pre school programs and family day care vis a vis home care we find that compared to home care being enrolled in pre school at age three does not lead to significant differences in child outcomes at age seven no matter the gender or mother s level of education family day care on the other hand seems to significantly deteriorate outcomes for boys whose mothers have a lower level of education finally increasing hours in family day care from 30 40 hours per week to 40 50 hours per week and hours in pre school from 20 30 hours per week to 30 40 hours per week leads to significantly poorer child outcomes

economic value competition and financial distress in the european banking system abstract in this paper we examine the impact of a large number of factors at the bank level liquidity and credit risks asset size income diversification and market power at the industry level banking concentration and macro level real gdp growth on bank financial distress using an unbalanced panel of 308 european commercial banks between 1996 and 2009 the observations falling below a given threshold of the empirical distribution of the shareholder value ratio proxy bank financial distress we employ a panel probit regression and given the presence of overlapping data giving rise to residual autocorrelation we use the bertschek and lechner 1998 robust estimator of the covariance matrix of parameters we show that credit risk liquidity risk and bank market power are the most influential determinants of distressed shareholder value ratio finally we evaluate the model out sample forecasting performance over the 2008 2009 crisis period

a fresh look at the rotten kid theorem and other household mysteries gary becker s rotten kid theorem asserts that if all family members receive gifts of money income from a benevolent household member then even if the household head does not precommit to an incentive plan for family members it will be in the interest of selfish family members to maximize total family income i show by examples that the rotten kid theorem is not true without assuming transferable utility i find a simple condition on utility functions that is necessary and sufficient for there to be the kind of transferable utility needed for a rotten kid theorem while restrictive these conditions still allow one to apply the strong conclusions of the rotten kid theorem in an interesting class of examples

inter generational effect of parental time and its policy implications abstract motivated by the empirical fact that parents with more human capital spend more time teaching and taking care of their children we develop and estimate a theoretical model in which altruistic parents pass their human capital on in two ways goods investment and time investment based on the estimated model we quantitatively assess how the two types of investment affect wage inequality and inter generational mobility using the model to study the impacts of a public policy that taxes income to finance public schooling we find significantly different policy effects in our model than in a model where time investment does not respond endogenously to the policy

universal pre school education the case of public funding with private provision this article studies the effect of free pre school education on child outcomes in primary school we exploit the staggered implementation of free part time pre school for three year olds across local education authorities in england in the early 2000s the policy led to small improvements in attainment at age 5 with no apparent benefits by age 11 we argue that this is because the expansion of free places largely crowded out privately paid care with small changes in total participation and was achieved through an increase in private provision where quality is lower on average than in the public sector

uniform two part tariffs and below marginal cost prices disneyland revisited i introduction since cournot s 1838 classic analysis of a hard nosed sole proprietor of a spring pricing water to maximize his profit the simple theory of monopoly has concluded that a monopolist will produce the level of output at which marginal revenue is equal to marginal cost and sell this output at the market clearing price hicks 1935 with a negatively sloped demand curve this results in the monopoly equilibrium price exceeding marginal cost and in less output than would be demanded if price is equal to marginal cost in a seminal contribution to the analysis of twopart tariffs oi 1971 elicited some surprise when he pointed out that a profit maximizing monopolist might under some conditions choose a marginal price that is less than the marginal cost 1 later work by schmalensee 1981 described a specific set of conditions in which pricing below marginal cost would be observed despite these demonstrations the subsequent literature on uniform two part tariffs for the most part considers below marginal cost pricing a thoroughly atypical outcome 2 however as an empirical matter pricing below marginal cost is easily found disneyland like recreation ski resorts buffet service of food and the ubiquitous presence of open bowls of peanuts in bars are but a few examples srinagesh 1991 has argued convincingly that the practice of setting marginal prices below marginal cost is so common in telecommunications offerings that it can justifiably be labeled a stylized fact this paper fills the theoretical void by answering the following questions about pricing below marginal cost using two part tariffs in oi s model with demand heterogeneity is the set of demand and cost parameters that induce such pricing small or large when it occurs will the price typically be slightly or substantially less than marginal cost how large of an effect can such pricing have on profits and does it typically have a small or large effect we consider the class of all linear demand models with two types of consumers and a monopolist with constant marginal costs who charges a profit maximizing uniform two part tariff we first show that two conditions are necessary for below marginal cost pricing to occur 1 the consumer demand curves intersect at a strictly positive price and quantity 2 the marginal cost is less than the demand curve intersection price it is shown that pricing below marginal cost arises when consumers have sufficiently different demand elasticities so that the revenue losses arising from the high usage of the elastic consumer are more than offset by revenue gains obtained from the large entrance fee charged to the inelastic consumer 3 next we determine how the monopolist sets prices to maximize profits given parameter values of the model we then describe the behavior of p c the ratio of the optimal marginal price to marginal cost over the parameter space this provides the basis for determining regions in the parameter space in which p less than c i e where p c less than 1 to indicate quantitatively the potential significance of pricing below marginal cost we find that sampling uniformly over the parameter space satisfying the two necessary conditions induces below marginal cost pricing 40 of the time furthermore conditional on price being less than marginal cost the mean ratio of p c with uniform sampling is 55 what relevance do these calculations with such a simple and austere model have for understanding nonlinear pricing in the real world in an important recent paper sibley and srinagesh 1997 study nonlinear pricing in multiproduct markets they show that a critical assumption for below marginal cost pricing to occur is a uniform ordering of demand curves condition which is the generic equivalent of the non crossing of demands condition in the analysis of nonlinear pricing of a single product they demonstrate that violation of the uniform ordering condition is necessary for below marginal cost pricing to occur when demand cross elasticities are zero that such pricing easily arises when the condition is violated and indicate how extremely restrictive the condition is

multiproduct nonlinear pricing typically work on mechanism design has assumed that all private information can be captured in a single scalar variable this paper explores one way in which this assumption can be relaxed in the context of the multiproduct nonlinear pricing problem it is shown that the firm will choose to exclude some low value consumers from all markets a class of cases that allow explicit solution is derived by making use of a multivariate form of integration by parts in such cases the optimal tariff is cost based

step by step the benefits of stage based r d licensing contracts we examine how a licensor can optimally design licensing contracts for multi phase r d projects when he does not know the licensee s project valuation leading to adverse selection and cannot enforce the licensee s effort level resulting in moral hazard we focus on the effect of the phased nature typical of such projects and compare single phase and multi phase contracts we determine the optimal values for the upfront payment milestone payments and royalties and the optimal timing for outlicensing including multiple milestones and accompanying payments can be an effective way of discriminating between licensees holding different valuations without having to manipulate the royalty rate which induces licensees to invest less resulting in lower project values and socially suboptimal solutions interestingly we also find that multiple milestone payments are beneficial even when the licensor is risk averse contrary to standard contract theory results which recommend that only an upfront payment should be used in terms of licensing timing we show that the optimal time depends on the licensor s risk aversion the characteristics of the licensee and the project value

assessing competition with the panzar rosse model the role of scale costs and equilibrium the panzar rosse test has been widely applied to assess competitive conduct often in specifications controlling for firm scale or using a price equation we show that neither a price equation nor a scaled revenue function yields a valid measure for competitive conduct moreover even an unscaled revenue function generally requires additional information about costs and market equilibrium to infer the degree of competition our theoretical findings are confirmed by an empirical analysis of competition in banking using a sample containing more than 100 000 bank year observations on more than 17 000 banks in 63 countries during the years 1994 2004

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

measuring multi product banks market power using the lerner index abstract the aggregate lerner index is a popular composite measure of multi product banks market power based on total assets as the single aggregate output factor we show that the aggregate lerner index only qualifies as a consistently aggregated lerner index if three conditions hold under these conditions the aggregate lerner index reduces to a weighted average of the product specific lerner indices we test the three conditions for a sample of u s banks covering the years 2011 2017 all three conditions are rejected and we show that they may cause an economically relevant bias to the aggregate lerner index depending on the economic context as a general solution we propose using the always consistently aggregated weighted average lerner index whenever a composite lerner index is needed

market power in cee banking sectors and the impact of the global financial crisis the aim of this study is to undertake an up to date assessment of market power in central and eastern european banking markets and explore how the global financial crisis has affected market power and what has been the impact of foreign ownership three main results emerge first while there is some convergence in country level market power during the pre crisis period the onset of the global crisis has put an end to this process second bank level market power appears to vary significantly with respect to ownership characteristics third asset quality and capitalization affect differently the margins in the pre crisis and the crisis periods while in the pre crisis period the impacts are similar for all banks regardless of ownership status in the crisis period non performing loans have a negative effect and capitalization a positive effect only for domestically owned banks

the demand for quality in child care we estimate a model of demand for quality related attributes of child care group size staff child ratio and provider training the model is estimated jointly with equations for mode expenditure on and hours of care and the mother s labor supply the results show that a lower price of child care in a particular mode leads to substitution toward that mode and an increase in the use of paid child care a decrease in the price of care causes an increase in hours of care demanded and a decrease in the demand for qualityrelated attributes income effects on demand for quality are small

bank competition and financial stability in asia pacific the impact of bank competition on financial stability has been a focus of academic and policy debate over the last two decades and particularly since the 2007 08 global financial crises beck 2008 oecd 2011 under the traditional competition fragility view banks cannot earn monopoly rents in competitive markets and this results in lower profits capital ratios and charter values this makes banks less able to withstand demand or supply side shocks and encourages excessive risk taking marcus 1984 alternatively the competition stability view suggests that competition leads to greater stability a less competitive banking market may lead to more risk taking if the big banks are deemed too important to fail and as such obtain implicit or explicit subsidies via government safety nets mishkin 1999 in addition banks with more market power tend to charge higher loan rates which may induce borrowers to assume greater risk leading to greater default in competitive banking markets loan rates are lower too big to fail issues and safety net subsidies are smaller and this results in a positive link between bank competition and stability boyd and de nicolo 2005 it could also be the case as noted by martinez miera and repullo 2010 that bank competition and stability are linked in a non linear manner and in a similar vein berger et al 2009 argue that competition and concentration may coexist and can simultaneously induce stability or fragility

competition in fragmented markets new evidence from the german banking industry in the light of the subprime crisis abstract of all of the eu member states germany has the largest banking market however not all german banking institutions necessarily face fierce competition because the industry is highly fragmented strict separation of the three existing banking pillars may impede competition with negative effects on financial stability we assess the competitive stances of 1 888 universal banks from 2001 to 2009 by using the panzar rosse revenue test we find evidence that measuring competition at an average country level does not necessarily generate valid evaluations of fragmented markets in addition we find no clear indication that either the particular objectives of cooperative and savings banks or the legal protection of these institutions impedes competition or discriminates against private banks therefore as long as the relationship between competition and financial stability is dubious the overall effect and the social costs or benefits of political measures that influence the structure of the german banking market are at least questionable

multiproduct pricing in major league baseball a principal components analysis the empirical analysis of multiproduct pricing suffers from a lack of clear theoretical guidance and appropriate data limitations which often render traditional regression based analyses impractical this paper analyzes ticket parking and concession pricing in major league baseball for the period 1991 2003 using a new methodology based on principal components which allows inferences to be formed about the factors underlying price variation without strong theoretical guidance or abundant information about costs and demand while general demand shifts are the most important factor they explain only half of overall price variation also important are price interactions that derive from demand interrelationships between goods and the desire to maximize the capture of consumer surplus in the presence of heterogeneous demand

bundling with customer self selection a simple approach to bundling low marginal cost goods with declining costs of distributing digital products comes renewed interest in strategies for pricing goods with low marginal costs in this paper we evaluate customized bundling a pricing strategy that gives consumers the right to choose up to a quantity m of goods drawn from a larger pool of n different goods for a fixed price we show that the complex mixed bundle problem can be reduced to the customized bundle problem under some commonly used assumptions we also show that for a monopoly seller of low marginal cost goods this strategy outperforms individual selling m 1 and pure bundling m n when goods have a positive marginal cost or when customers have heterogeneous preferences over goods comparative statics results also show that the optimal bundle size for customized bundling decreases in both heterogeneity of consumer preferences over different goods and marginal costs of production we further explore how the customized bundle solution is affected by factors such as the nature of distribution functions in which valuations are drawn the correlations of values across goods and the complementarity or substitutability among products altogether our results suggest that customized bundling has a number of advantages both in theory and practice over other bundling strategies in many relevant settings

assessing competition in the banking industry a multi product approach abstract this paper investigates the competitive aspects of multi product banking operations extending panzar and rosse s 1987 model to the case of a multi product banking firm we show that higher economies of scope in multi product banking are associated with lower panzar rosse measures of competition in the banking sector to test this empirical implication and determine the impact of multi production on market power we use a new dataset on the brazilian banking industry consistent with our theoretical prediction we find that banks that offer classic banking products i e loans and credit cards and other banking products i e brokerage services insurance and capitalization bonds have substantially higher market power than banks that offer only classic products these results suggest a positive bias in the traditional estimates of competition in which multi output actions are not considered

quality distortion by a discriminating monopolist the standard model of monopolistic imperfect quality discrimination involving consumer self selection has shown that no distortion occurs at the highest quality level while all lower quality levels are degraded in order to maintain profitable market segmentation this result flows from the assumption that consumers with a higher total utility of quality also have a higher marginal utility of quality the paper develops a reasonable model in which the standard assumption is not satisfied and this alternative model yields vastly different conclusions regarding the form of quality distortion in particular quality may be enhanced not degraded to maintain profitable market segmentation copyright 1989 by american economic association

the educational and labor market returns to preschool attendance in austria preschool attendance is widely recognized as a key ingredient for later socioeconomic success mothers labor market participation and leveling the playing field for children from disadvantaged backgrounds however the empirical evidence for these claims is still relatively scarce particularly in europe using data from the 2011 austrian european union statistics of income and living conditions eu silc we contribute to this literature by studying the effects of having attended preschool for the adult austrian population we find strong and positive effects of preschool attendance on later educational attainment the probability of working full time hourly wages and the probability that the mother is in the labor market full time workers at the bottom and the top of the distribution benefit less than those in the middle women in particular benefit more in terms of years of schooling and the probability of working full time other disadvantaged groups second generation migrants people with less educated parents also often benefit more in terms of education and work

two part tariffs with quality degradation abstract this paper examines a firm s incentive to sell a service that is of lower quality when the firm offers a menu of two part tariffs each tariff is characterized by a fixed fee together with two screening instruments these being a uniform per unit charge and a quality restriction we find that allocation of quality is monotonic in type while per unit charge might be non monotonic the results thus contradict one of the most established insights in nonlinear pricing that the per unit charge should be monotonically decreasing over the type space we show that this practice increases welfare due to increased consumption efficiency

should day care be subsidized in the presence of distortionary taxes on labor can subsidies on childcare flnanced by a further increase in taxes raise welfare by encouraging women with small children to work we approach this question in two difierent ways first we consider a set of stylized models where we prove analytically that under some conditions the ramsey optimal policy consists in making childcare expenses tax deductible then we construct a calibrated stochastic dynamic life cycle model of household decision making designed to capture some facts about labor supply in germany we flnd that the welfare gains associated with subsidizing childcare are considerable and that the maximum gains are realized when childcare is subsidized to an even greater extent than what tax deductibility implies

early kindergarten maternal labor supply and children s outcomes evidence from italy abstract we analyze a reform that introduced early access to subsidized childcare for 2 year old children in italy exploring the effects on several measures of maternal labor supply and on children s cognitive outcomes our identification strategy exploits discontinuities in the eligibility rules and the staggered implementation of the reform we find that the policy increased mothers participation in the labor market and lowered the reservation wage of the unemployed thus increasing their likelihood of finding a job at the same time the newly introduced childcare arrangement did not affect children s cognitive development irrespective of their family background