frictionless commerce a comparison of internet and conventional retailers there have been many claims that the internet represents a new nearly frictionless market our research empirically analyzes the characteristics of the internet as a channel for two categories of homogeneous products books and cds using a data set of over 8 500 price observations collected over a period of 15 months we compare pricing behavior at 41 internet and conventional retail outlets we find that prices on the internet are 9 16 lower than prices in conventional outlets depending on whether taxes shipping and shopping costs are included in the price additionally we find that internet retailers price adjustments over time are up to 100 times smaller than conventional retailers price adjustments presumably reflecting lower menu costs in internet channels we also find that levels of price dispersion depend importantly on the measures employed when we compare the prices posted by different internet retailers we find substantial dispersion internet retailer prices differ by an average of 33 for books and 25 for cds however when we weight these prices by proxies for market share we find dispersion is lower in internet channels than in conventional channels reflecting the dominance of certain heavily branded retailers we conclude that while there is lower friction in many dimensions of internet competition branding awareness and trust remain important sources of heterogeneity among internet retailers

a panel analysis of job changes and unemployment abstract this paper tests for state dependence in histories of unemployment and job mobility from the first six waves of the german socio economic panel soep transitions between states of employment and unemployment are modelled as outcomes of binomial probit processes which are first and higher order markov the use of simulation estimation allows quite general intertemporal covariance structures in order to capture individual heterogeneity it is investigated how differences in human capital and other personal characteristics and macro or industry determinants such as regional unemployment growth and immigration pressure affect labour mobility

monopolistic competition in the spirit of chamberlin a general model this paper develops a model of large group chamberlinian monopolistic competition in which 1 there are many firms producing differentiated commodities 2 each firm is negligible in that it can ignore its impact on and hence reactions from other firms 3 free entry leads to zero profit of operating firms but 4 each firm faces a downward sloping demand curve the existence of a monopolistically competitive equilibrium is established in a companion paper more particular questions such as whether the market provides too many or too few products are addressed for a special case of the model

product variety informative advertising and price competition abstract in many product categories consumer tastes are diverse and firms use finely targeted advertising to inform consumers about their products this article proposes a model of informative advertising that allows for diverse consumer tastes and multiple competing firms using this framework the authors analyze how diversity in consumers tastes informative advertising and improvements in advertising technology may influence prices first informative advertising can lead to lower prices if consumer valuations are high however if consumer valuations are low informative advertising can lead to higher prices second when consumer valuations are high price increases with greater diversity in tastes though this result reverses if consumer valuations are low third improvements in advertising technology lead to higher levels of advertising when consumer valuation is high but the opposite effect can occur when consumer valuation is low the authors relate these theoretical findings to previous e

the school to work transition a cross national perspective school to work patterns and issues are discussed for seven economies france germany japan the netherlands sweden the united kingdom and the united states the emphasis is placed on differences across countries in the current labor market position of young people and recent trends therein along with the institutions that regulate youth education training and employment the power of public policies including labor market deregulation labor market programs vocationalization of education and apprenticeship to improve youth outcomes is discussed drawing on national evaluation literatures evidence of extensive policy failure points up the need to develop nationally appropriate institutions to improve school to work transitions

pricing prototypical products when we think of colas coca cola first comes to mind products such as cola cola tide laundry detergent and chapstick lip balm are the prototypical products in their respective categories for more than three decades research in consumer psychology has accumulated evidence on how prototypicality influences memory shapes the composition of consideration set and affects purchase decision yet there is no research on how it changes the competitive behavior of firms in a horizontally differentiated market for example some prototypical products are priced lower than other products in their category whereas in certain other categories the prototypical product is priced higher we propose a novel model of spatial competition where the prototypicality of a product influences the probability of the product being included in consumers consideration sets without affecting its valuation using the model we examine theoretically the impact of prototypicality on the pricing decisions of competing firms our analysis shows that when consumer valuations are low the prototypical product is priced lower than a nonprototypical product and earns more profits however when consumer valuations are high the rank order of the prices of the prototypical product and a nonprototypical product is reversed but not the order of profits we subject these predictions to an empirical test the experimental results lend support for the qualitative predictions of the model

unemployment persistence is there evidence for stigma effects we present evidence for a highly significant interaction between state dependence in individual unemployment risk and the business cycle the disadvantage from having been unemployed in the previous period is smaller in times of relatively high unemployment and larger in times of low unemployment this is consistent with the existence of stigma effects in the sense that unemployed individuals face difficulties finding a new job because employers interpret unemployment as a negative signal and do so especially when it is easier to find jobs i e when unemployment is low

time aggregation and state dependence in welfare receipt dynamic discrete choice models are an important tool in studies of state dependence in benefit receipt a common assumption of such models is that benefit receipt sequences follow a conditional markov process this property has implications for how estimated period to period benefit transition probabilities should relate when receipt processes are aggregated over time this paper assesses whether the conditional markov property holds in welfare benefit receipt dynamics in norway using high quality monthly data from administrative records we find that the standard conditional markov model is seriously misspecified estimated state dependence is affected substantially by the chosen time unit of analysis with the average treatment effect of past benefit receipt increasing with the level of aggregation the model can be improved considerably by permitting richer types of benefit dynamics we find strong evidence for both duration and occurrence dependence in benefit receipt allowing for heterogeneity in the entry and persistence processes we find important disparities in the effects of observed and persistent unobserved characteristics based on our preferred model the month to month persistence probability in benefit receipt for a first time entrant is 37 percentage points higher than the entry rate of an individual without previous benefit receipt over a 12 month period this corresponds to an average treatment effect of 5 percentage points

a nonlinear mixed integer multiperiod firm model abstract we formulate and test an advanced multiperiod model for strategic firm planning this has not been previously considered as a mixed integer nonlinear problem minlp our approach is to show the differences between a linear and a nonlinear mixed integer approach the key property of our model is the simplicity and efficiency of generating optimal firm strategies a cornerstone for managerial acceptance our purpose is to maximize the discounted value of net income and return on investment roi our model has been tested on some major finnish firms and it seems to give reliable results with the data of our sample firm for this paper optimal roi and optimal net income presuppose different strategies when optimizing roi the model balances between cash and fixed assets while optimizing net income results in an intensive investment program even if our sample firm is but one case the results are indicative of some fundamental principles governing managerial decision making

research note additional learning and implications on the role of informative advertising observers argue that evidence for the persuasive role of advertising comes from competitive categories where increases in advertising lead to higher average prices conversely others claim that advertising serves a purely informational role here higher levels of advertising lead to better informed consumers and this should increase competition and stimulate lower prices the objective of this study is to neither confirm nor refute either of these perspectives it is rather to show that increases in informative advertisingalone can lead to both higher or lower prices i further show that the direction of this relationship depends on the level of differentiation between competing firms similar to grossman and shapiro 1984 i examine conditions where the differences between competing products are small but i also examine conditions where the differences are significant the role of advertising is to inform consumers about individual products and higher advertising for a product means that more of the potential market knows about it higher levels of advertising increase the relative importance of fully informed consumers compared to partially informed consumers this dynamic is the basis for explaining why informative advertising can push prices either up or down in a uniformly distributed spatial market

finding the most preferred alliance structure between banks and insurance companies in this paper we have studied alternative alliances between banks and insurance companies first we defined six different possible structure models for such alliances and nine criteria used to evaluate the models the models and the criteria were introduced together with bank and insurance experts the experts are representatives of the top management of finnish banks and insurance companies searching for the most preferred alliance model is a multiple criteria decision making mcdm problem to solve the problem we used an expert panel and the analytic hierarchy process ahp based on the evaluations of the panel the alternatives financial conglomerate and cross selling agreement no overlapping service channels are most preferred which one is chosen depends on how risk is emphasized

real wages and unemployment in the big squeeze uk real wage growth has slowed down stagnated and recently turned sharply negative we document the nature of real wage changes across the wage distribution over the last three decades showing that recent patterns represent a distinct break of trend that pre dates the onset of recession we explore whether unemployment has become a stronger moderating influence on real wage growth and report using aggregate economy wide and regional panel data that real wage unemployment sensitivities have become stronger in the period from 2003 onwards finally we offer some assessment of possible drivers of this increased sensitivity of real wages to unemployment

price and variety in the spokes model the spokes model of nonlocalized spatial competition provides a new analytical tool for dierentiated oligopoly and a representation of spatial monopolistic competition an increase in the number of rms leads to lower equilibrium prices when consumers have relatively high product valuations but surprisingly to higher equilibrium prices for in termediate consumer valuations new entry alters consumer and social welfare through price market expansion and matching eects with free entry the market may pro vide too many or too few varieties from a social welfare perspective and the equilibrium price remains above marginal cost even when the number of rms is arbitrarily large

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

do employers use unemployment as a sorting criterion when hiring evidence from a field experiment the stigma associated with long term unemployment spells could create large inefficiencies in labor markets while the existing literature points toward large stigma effects it has proven difficult to estimate causal relationships using data from a field experiment we find that long term unemployment spells in the past do not matter for employers hiring decisions suggesting that subsequent work experience eliminates this negative signal nor do employers treat contemporary short term unemployment spells differently suggesting that they understand that worker firm matching takes time however employers attach a negative value to contemporary unemployment spells lasting at least nine months providing evidence of stigma effects

informative advertising with differentiated products in this paper we study the role of promotional expenditures by sellers in a model of product differentiation advertising conveys full and accurate information about the characteristics of products heterogeneous consumers who have no source of information other than advertisements seek to purchase the products that best fit their needs despite the roles played by advertising in improving the matching of products and consumers and in increasing the elasticity of demand faced by each firm we find that the market determined levels of advertising are excessive given the extent of diversity in the market we derive a promotional equilibrium based on a specific information transmission technology paying explicit attention to the structure of consumer information and its impact on firms demand curves this allows us to study the effects of changes in the advertising technology including an increased ability to target messages to specific groups of consumers on the equilibrium in the product market we find that decreased advertising costs may reduce profits by increasing the severity of price competition

the impact of an early career recession on schooling and lifetime welfare this paper evaluates the lifetime welfare and labor market consequences of experiencing a recession during youth using a directed search equilibrium model with heterogeneous agents and aggregate shocks in particular the model allows for endogenous schooling decisions over the business cycles the counterfactual analysis shows that experiencing the 1981 1982 recession in youth causes a 1 6 to 2 3 loss in lifetime welfare endogenizing the schooling decision avoids overestimation of welfare loss because of the selection effect and the human capital effect i also decompose lifetime wage changes into different channels changes from schooling work experience and job mobility this article is protected by copyright all rights reserved

a dynamic bank portfolio planning model with multiple scenarios multiple goals and changing priorities abstract the paper discusses a practical application of a two stage linear goal programming model to the management of the domestic and foreign currency denominated assets and liabilities of a large bank in finland the planning horizon includes three one year planning periods a number of alternative scenarios are used to describe uncertainty concerning future developments in these periods the scenarios are related to general economic conditions as well as the state of the domestic and foreign financial markets the bank is assumed to have multiple conflicting goals with different and changing priorities the goals deal with expected profits risk liquidity capital adequacy growth customer relationships and several other aspects of the bank s operations

the impact of youth unemployment on adult unemployment in the ncds using the national child development survey this paper looks at cumulated experience of unemployment highlighting how unemployment experience is concentrated on a minority of the workforce over extended periods low educational attainment ability not captured by education financial deprivation and behavioural problems in childhood raise a person s susceptibility to unemployment there is strong evidence of structural dependence induced by early unemployment experience for men but only minor persistence for women attacking low educational achievement and preventing the build up of substantial periods in unemployment as youths may reduce the extent to which a minority of men spend a large part of their working lives unemployed

multiple criteria decision making combined with finance a categorized bibliographic study abstract this paper provides a categorized bibliography on the application of the techniques of multiple criteria decision making mcdm to problems and issues in finance a total of 265 references have been compiled and classified according to the methodological approaches of goal programming multiple objective programming the analytic hierarchy process etc and to the application areas of capital budgeting working capital management portfolio analysis etc the bibliography provides an overview of the literature on mcdm combined with finance shows how contributions to the area have come from all over the world facilitates access to the entirety of this heretofore fragmented literature and underscores the often multiple criterion nature of many problems in finance

an interest rate risk management model for commercial banks abstract this paper develops a goal programming model to assist a commercial bank in managing its exposure to interest rate risk the bank s objective is to immunize its equity position against innovations in interest rates while maximizing its market value to accomplish this task a duration gap framework is developed that does not require interest rate forecasts as decision variables the model includes assets liabilities and off balance sheet derivative securities the focus is on a protective put strategy that uses options on interest rate futures but to provide contrast a short interest rate futures position is examined as well application of the model to an illustrative environment indicates that for larger interest rate changes the option strategy provides better protection against interest rate risk than the short futures position

the effect of implicit contracts on the movement of wages over the business cycle evidence from micro data in this paper we address the question of whether wages are affected by labor market conditions in a manner more consistent with a contract approach than with a standard spot market model from a simple implicit contract model we derive implications about the links between wages and past labor market conditions using individual data from the current population survey and the panel study of income dynamics we find that an implicit contract model with costless mobility describes these links better than either a simple spot market model or an implicit contract model with costly mobility

do business cycle conditions at the time of labor market entry affect future employment prospects abstract labor market conditions at the time and place of potential entry into the labor market are shown to have a substantial and persistent effect on adult employment prospects individuals who face particularly depressed local labor markets when they graduate from secondary education are other things equal subject to relatively high rates of nonemployment during their whole prime age work career building on a unique combination of micro and macro data from norway we show that these effects are robust with respect to model specification and conditioning variables and that they are not limited to individuals with a particularly disadvantaged background

consideration set formation with multiproduct firms the case of within firm and across firm evaluation costs we consider a theoretical setting in which firms carry multiple products and consumers incur evaluation costs not only across firms but also within firms consumers judiciously decide the number of firms to include in their consideration sets as well as how many products from those firms this decision depends on the relative trade offs of evaluating an additional product and whether it is from a firm already included in the consideration set or from an entirely new firm the composition of consumers consideration set affects how firms compete in prices and in the number of products to offer contrary to previous literature we find that firm differentiation can reduce firms product lines and within firm evaluation costs have either a positive or a negative effect on firms prices interestingly we show that within firm evaluation costs and across firm evaluation costs are different constructs the number of products firms offer in equilibrium can exceed the socially optimal level if within firm evalua

a bank asset and liability management model in managing its assets and liabilities in light of uncertainties in cash flows cost of funds and return on investments a bank must determine its optimal trade off between risk return and liquidity in this paper we develop a multiperiod stochastic linear programming model alm that includes the essential institutional legal financial and bank related policy considerations and their uncertainties yet is computationally tractable for realistically sized problems a version of the model was developed for the vancouver city savings credit union for a 5 year planning period the results indicate that alm is theoretically and operationally superior to a corresponding deterministic linear programming model and that the effort required for the implementation of alm and its computational requirements are comparable to those of the deterministic model moreover the qualitative and quantitative characteristics of the solutions are sensitive to the model s stochastic elements such as the asymmetry of cash flow distributions we also compare alm with the stochastic decision tree sdt model developed by s p bradley and d b crane alm is computationally more tractable on realistically sized problems than sdt and simulation results indicate that alm generates superior policies

recent developments in management science in banking banking has been a fertile area for management science applications as is evident from the review provided in this paper the relevant management science models are discussed in terms of the areas of bank management for which they were intended under dynamic balance sheet management i e internal bank financial planning we consider forecasting techniques simulation models and optimization models other areas of banking included are bond portfolio management bank operations corporate services bank marketing and management of the loan portfolio the authors provide an evaluation of the applicability of management science models in practice discuss the extent to which some have been implemented and consider the philosophy of using management science models in banking

the interrelated dynamics of unemployment and low wage employment this paper examines the extent of state dependence in unemployment and the role played in this by intervening low wage employment a range of dynamic random and fixed effects estimators are compared low wage employment is found to have almost as large an adverse effect as unemployment on future prospects and the difference in their effects is found to be insignificant evidence is presented that low wage jobs act as the main conduit for repeat unemployment and considerably increases its probability obtaining a higher wage job reduces the increased risk of repeat unemployment to insignificance

do when and where matter initial labor market conditions and immigrant earnings this article investigates the long term effects on immigrant earnings and employment of labour market conditions encountered upon arrival we find that early earnings assimilation depends crucially on a favourable national labour market exposure to high local unemployment rates also affects individuals for at least ten years to handle the issue of selective migration we compare refugees entering sweden during a severe and unexpected recession to refugees arriving during a preceding economic boom the analysis of effects at the local level exploits a governmental refugee settlement policy to get exogenous variation in local labour market conditions

short term financial planning under uncertainty this paper presents a stochastic linear programming formulation of a firm s short term financial planning problem this framework allows a more realistic representation of the uncertainties fundamental to this problem than previous models in addition using wets s algorithm for linear simple recourse problems this formulation has approximately the same computational complexity as the mean approximation i e the deterministic program obtained by replacing all random elements by their means using this formulation we empirically investigate the effects of differing distributions and penalty costs we conclude that even with symmetric penalty costs and distributions the mean model is significantly inferior to the stochastic linear programming formulation thus we are able to demonstrate that ignoring the stochastic components in linear programming formulations can be very costly without having significant computational savings

using unemployment rates as instruments to estimate returns to schooling i use state unemployment rates during a person s teenage years to estimate the returns to schooling a higher unemployment rate reduces the opportunity costs of attending school using the same 1980 census data set that angrist and krueger 1991 use i also estimate returns to schooling with a modified version of their quarter of birth instrument the estimates from the two stage least squares 2sls model using the unemployment rate and the model using the quarter of birth instruments are almost identical in addition these 2sls estimates are larger than the ordinary least squares ols estimates supporting this counterintuitive yet prevalent result in the literature

reference dependent utility product variety and price competition products such as nike running shoes gillette razors and gatorade sports drink serve as the standard against which consumers evaluate other members of the category empirical evidence suggests that consumers care about not only the consumption utility derived from a product but also the gain loss utility in comparison to the reference product of the category this paper examines how reference dependent utility affects price competition in a horizontally differentiated market where consumers tastes are diverse when consumer valuations are low the reference product is priced lower than a nonreference product in contrast when consumer valuations are high the reference product is priced higher than a nonreference product moreover loss aversion on the price dimension always intensifies competition among low valuation goods whereas loss aversion on the taste dimension softens competition among high valuation goods only if consumer sensitivity to the difference in match quality is above a threshold we also find that an increase in the diversity of consumers tastes reduces equilibrium profits if consumer valuation is low but has the opposite effect if consumer valuation is high we further explore how an increase in the popularity of the reference product affects price competition finally we assess the robustness of the findings by extending the model in different directions the online appendix is available at https doi org 10 1287 mnsc 2017 2834 this paper was accepted by juanjuan zhang marketing

on the robustness and strategic implications of a parsimonious advertising inventory competitive model with extensions to pricing competition abstract using a market share attraction structure of advertising competition this research introduces first a parsimonious inventory advertising model for which competition is limited to two symmetric firms thus obtaining its related comparative statics following a supermodular game approach the derived comparative statics remain robust upon considering non dominant firms each with a market share of less than 50 competing in an asymmetric oligopoly of n rivals where each firm controls the inventory advertising decision variables furthermore changes in model parameters are investigated in terms of their relative impact on equilibrium measures in this regard the findings indicate that for the analyzed model the marketing parameters possess much more influence on the equilibrium measures than the operations parameters the generalization appears applicable to both non dominated oligopolies as well as dominated oligopolies where one firm has a market share equal to or greater than 50 where each firm controls the inventory advertising decision variables in addition to price however changes in shift parameters elicit a response from the dominant firm which will differ from its non dominant rivals for products and services additionally while the literature shows that the non dominant firm will pursue a defensive strategy of decreasing both the equilibrium price and the amount of equilibrium advertising in response to competitive entry our findings show that results for a fixed market potential may not continue to be robust once inclusion of the operations variables of order quantity are considered finally the study explores the implications of the free entry equilibrium for which the number of firms in the industry is determined endogenously

ahp based synergy allocation to the partners in a merger abstract many corporations try to overcome vulnerabilities by external alliances with other corporations this paper concentrates on the merger case in member states of the european community under the premise that synergies are to be expected from such a transaction in this context synergy will be understood as the difference between the capitalized earning power of the merger firm and the sum of the capitalized earning powers the companies could expect when operating alone this article presents a method to allocate the financial effect to the partners in a merger based on the formal procedure of the analytic hierarchy process the method allocates synergy to the partners according to the impact intensities of their performance potentials on this synergistic effect

an application of the ahp to bank strategic planning the mergers and acquisitions process abstract strategic planning is one of the most complex and ill structured tasks faced by banks it usually requires adopting a course of action from a large set of alternatives with uncertain long term outcomes which depend to a large extent on unknown and turbulent environments in deriving these strategies bankers usually try to achieve multiple and sometimes conflicting objectives such as profitability growth liquidity and market share subject to constraints on credit and exchange risks and regulatory requirements moreover specific strategies are normally determined by a board of directors whose members have different backgrounds judgments and personal goals this paper describes the application of the ahp methodology to the evaluation of bank mergers and acquisitions m a strategy the model developed for this important problem was tested with the assistance of the board of directors of a billion dollar bank holding company although it is difficult to generalize from one experiment dealing with a single issue there was nothing unique in the situation where the test was performed hence it is safe to assume that the ahp methodology can be applied to other complex and ill defined strategic issues faced by other banking institutions compared with existing techniques on the one hand and with qualitative managerial judgement on the other hand the ahp provides a useful simple and powerful tool for dealing with strategic planning in banking

active labour market policies a case of evidence based policy making the 1990s was a decade of renewed enthusiasm for active labour market policies however it is not clear that this was the result of an appreciation of the evidence on the effectiveness of different policies relatively simple and cost effective initiatives to improve matching and to enhance job search appear to have a significant impact on employment training programmes generally do not produce better outcomes there is no convincing evidence that work programmes improve employment and recruitment subsidies often suffer from low take up however a strategy appears to be emerging in the uk and the usa by design or by accident of trying to use job search focused programmes to move people into regular employment and then to subsidize households especially with children so that their net incomes can come above the poverty line most of this expenditure could be classified as good old fashioned fiscal redistribution to the poor copyright 2000 by oxford university press

is there less discrimination in occupations where recruitment is difficult the authors empirically test the cross sectional relationship between hiring discrimination and labor market tightness at the level of the occupation to this end they conduct a correspondence tes

new labour and the labour market the recent run of good macroeconomic news masks mounting evidence that worklessness is increasingly concentrated on selected individuals households and socio economic groups and in geographical areas these distributional aspects have been overlooked or ignored over the last 20 years but we believe they now form the most pressing labour market and social problems facing this administration we focus on what we view as the government s selected priorities the concentration of unemployment on certain individuals groups and areas increasing inactivity especially marked among less educated older men low pay persistence of low wages and its relationship with job loss and the distribution of work across households and child poverty many of these problems leave lasting scars on individuals so that successful intervention may beneficially change an individual s life chances we examine the evidence on each of these issues and the current state of policy aimed to reduce their scale or intensity copyright 2000 by oxford university press

a goal programming model for bank assets and liabilities management abstract assets and liabilities management is one of the most important issues in bank strategic planning in the past this problem has often been addressed through conventional mathematical programming i e linear programming however bank management typically involves several conflicting goals such as the maximisation of returns minimisation of risk expansion of deposits and loans etc the complexity of this problem can be captured more adequately by multiobjective mathematical programming this paper discusses the construction and application at the commercial bank of greece of a goal programming model that takes into account the essential institutional financial legal and bank policy considerations

unemployment and subsequent earnings estimating scarring among british men 1984 94 this paper estimates the impact of unemployment on earnings following re employment for a large and representative sample of british men 1984 94 unemployment incidence is found to have only a temporary effect an average earnings setback of 10 on initial re engagement largely eroding over two years the effect of unemployment duration by contrast is permanent a one year spell adding a further penalty of 10 percentage points these wage penalties are least for young men and the low paid those most at risk of unemployment and greatest for prime age and highly paid men

the effects of unemployment and underemployment on employment opportunities results from a correspondence audit of the labor market for college graduates the authors use data from a resume audit to estimate the impact of unemployment and underemployment on the employment prospects of recent college graduates they find no statistical evidence linking unemployment spells of different durations to employment opportunities by contrast college graduates who are underemployed have callback rates that are 30 lower than those of applicants who are adequately employed the null effects associated with unemployment and the adverse effects associated with underemployment are robust across cities with relatively tight and loose labor market conditions internship experience obtained while completing one s degree substantially reduces the negative effects of underemployment the data support the proposition that employers view underemployment as a strong signal of lower expected productivity

monopolistic competition in the spirit of chamberlin special results the idea of large group monopolistic competition was first introduced by chamberlin in i 933 although a large literature has developed on this topic since that time it can be argued that few of the models which have been formulated really capture monopolistic competition in chamberlin s sense in a companion paper to this one hart i 983 a model was presented which it was claimed did satisfy the desiderata of large group monopolistic competition specifically the model had the property that i there were many firms producing differentiated commodities 2 each firm was negligible in the sense that it could ignore its impact on and hence reactions from other firms 3 free entry led to zero profit of operating firms but 4 each firm faced a downward sloping demand curve and hence equilibrium price exceeded marginal cost the model of hart i983 was quite general and only such issues as the existence and limiting properties of equilibrium were considered the purpose of the present paper is to analyse a special case of this model in greater detail and to consider in this context the old question of whether too few or too many brands are produced under monopolistic competition before embarking on the analysis however let me briefly indicate why i believe that there is a need for a new model of monopolistic competition further discussion of this may be found in hart i983 in the last few years a sizeable literature has developed on imperfect competition and product differentiation see for example dixit and stiglitz i977 lancaster i979 salop i979 and spence i976 in much of this literature see for example spence i976 markets of fixed finite size are considered where the entry of firms is limited by the existence of set up costs under these conditions only a finite number of firms can operate and hence firms will not be negligible in the sense of 2 in addition due to the integer problem operating firms will generally make strictly positive profits i e 3 is violated models of

an exogeneity test for a simultaneous equation tobit model with an application to labor supply a test of weak exogeneity in the simultaneous equation tobit model is proposed and illustrated using a female labour supply model estimated using cross section data the test statistic can be simply output from any standard tobit maximum likelihood package and is asymptotically efficient the procedure provides consistent estimators for the simultaneous tobit model whose asymptotic covariance matrix is a simple extension of the usual tobit formula we also provide the lagrange multiplier test of weak exogeneity this abstract was borrowed from another version of this item