outcomes of voting and planning condorcet weber and rawls locations abstract the paper is concerned with the comparison of the locations of a facility resulting from voting and planning procedures it is shown that a voting location exists and coincides with that minimizing the total distance covered by the users to go to the facility when the transportation network contains no cycles for a general network least upper bounds on the ratio of the social values of the voting and planning locations are given in the cases where the total or the maximal travelled distance is minimized

the case for divisia monetary statistics a bayesian time varying approach abstract the zero lower bound and quantitative easing policies have rekindled interest in the link between monetary aggregates and the business cycle this paper argues on the basis of bayesian time varying coefficient var models that use divisia indexes that money is more closely linked to the business cycle as well as forecasting economic activity more accurately than existing literature claims moreover the relationship between money and economic activity is considerably more pronounced during periods of economic distress such as in the great recession

congestion games with player specific payoff functions a class of noncooperative games in which the players share a common set of strategies is described the payoff a player receives for playing a particular strategy depends only on the total number of players playing the

monetary policy in an uncertain world in this article charles bean bank of england chief economist and member of the monetary policy committee reviews and assesses the three types of uncertainty which affect monetary policymakers uncertainty about the data uncertainty about the nature and persistence of shocks and uncertainty about the structure of the economy focusing on uncertainty about the structure of the economy he notes the unusual stability of inflation and output growth in the past decade or so there are a number of possible explanations including plain good luck structural changes in the economy and improved policymaking the author goes on to note that the short run trade off between inflation and activity seems to have flattened as inflation has stabilised at low levels and he attributes this in part to improved monetary policymaking he goes on to consider some of the policy implications of this change

internal pricing and cost allocation in a model of multiproduct competition with finite capacity increments internal prices are used in practice to allocate central resources to a firms profit centers the fixed costs of capacity acquisitions are often included in these prices we examine the interaction between capacity acquisition and competition when capacity is available in fixed increments we find predictably that if the increments are small unit capacity cost is a good approximation for the internal price and if the increments are large the internal price is zero however the relationship between the internal price and the capacity increment for intermediate cases is quite irregular to the extent that it is not possible to approximate the internal price with accounting data the analysis also suggests that full cost allocation overcharges for the opportunity cost of capacity furthermore the right internal price does not act either as a way of recovering fixed costs or as a proxy for externalities such as congestion costs the conclusions are not materially altered in the case where variable costs increase at the margin and where these costs rather than hard capacity constraints are the reason to restrict output

a two player competitive discrete location model with simultaneous decisions in this paper we will describe and study a competitive discrete location problem in which two decision makers players will have to decide where to locate their own facilities and customers will be assigned to the closest open facilities we will consider the situation in which the players must decide simultaneously unsure about the decisions of one another and we will present the problem in a franchising environment most problems described in the literature consider sequential rather than simultaneous decisions in a competitive environment most problems consider that there is a set of known and already located facilities and new facilities will have to be located competing with the existing ones in the presence of more than one decision maker most problems found in the literature belong to the class of stackelberg location problems where one decision maker the leader locates first and then the other decision maker the follower locates second knowing the decisions made by the first these types of problems are sequential and differ significantly from the problem tackled in this paper where we explicitly consider simultaneous non cooperative discrete location decisions we describe the problem and its context propose some mathematical formulations and present an algorithmic approach that was developed to find nash equilibria some computational tests were performed that allowed us to better understand some of the features of the problem and the associated nash equilibria among other results we conclude that worsening the situation of a player tends to benefit the other player and that the inefficiency of nash equilibria tends to increase with the level of competition

democratic elections and centralized decisions condorcet and approval voting compared with median and coverage locations abstract in this study we focus on the quality of condorcet and approval voting winners using median and maximum coverage problems as benchmarks we assess the quality of solutions by democratic processes assuming many dimensions for evaluating candidates we use different norms to map multidimensional preferences into single values we perform extensive numerical experiments the condorcet winner when he she exists may have very high quality measured by the median objective function but poor quality measured by the maximum coverage problem we show that the approval voting winner is optimal when the quality is measured by the maximum coverage objective and fairs well when the median objective is employed the analyses further indicate that the number of voters and the distance norm may increase while the number of candidates and dimensions may decrease the quality of democratic methods

market and locational equilibrium for two competitors we consider a two stage location and allocation game involving two competing firms the firms first select the location of their facility on a network then the firms optimally select the quantities each wishes to supply to the markets which are located at the vertices of the network the criterion for optimality for each firm is maximizing its profit which is the total revenue minus the production and transportation costs under reasonable assumptions regarding the revenue the production cost and the transportation cost functions we show that there is a nash equilibrium for the quantities offered at the markets by each firm furthermore if the quantities supplied at the equilibrium by each firm at each market are positive then there is also a nash locational equilibrium i e no firm finds it advantageous to change its location

fiscal spending and green economic growth evidence from china abstract the green economy is considered as an efficient way for sustainability but the connection between fiscal spending and green economic growth has not been systematically explained this paper attempts to fill this research gap based on the panel data of 282 prefecture level cities from 2005 to 2016 we first construct the green economic growth index by using the non radial direction distance function then by employing the system gmm estimation we further evaluate the effect of fiscal education spending and r d spending on green economic growth finally we explore the potential mechanism and discuss our findings we obtain the following conclusions 1 the green economic growth index fluctuated in the study period we attribute it to the political tournament of local governments 2 the system gmm estimation results confirm the existence of composition effect and technique effect in the full sample but the sub sample analysis suggests that there is a heterogeneous effect in different areas with different resources abundant degree 3 mechanism analysis illustrates that fiscal r d spending and education spending foster the green economic growth through technological activities and human capital intensive activities respectively but they exhibit distinct roles in different areas based on these findings we propose some targeted policy suggestions for promoting green economic growth

strategic multi store opening under financial constraint abstract this paper analyzes strategic store openings in a situation in which firms can open multiple stores depending on the financial constraints of the firm specifically given any upper limit of the number of store openings that two potentially symmetric firms can open they sequentially determine the number of store openings including their locations to maximize their profits as a result of our analysis in a microeconomic framework we show that the equilibrium strategy can be wholly classified into only two following opposite strategies according to the level of their financial constraints involved when firms can afford to invest significant amounts of money in the market the leader chooses segmentation strategy in which a part of the market can be monopolized by opening a chain of multiple stores and deterring the follower s entry in contrast when the leader has a severe financial constraint so that it can only monopolize less than half of the market the leader chooses minimum differentiation strategy where firms open each of their stores at exactly the same point as the rival s under this strategy the leader necessarily captures just half of the market furthermore we show that regardless of potential symmetry between firms both first and second mover advantages in terms of profit can occur in the equilibrium

alternative models of spatial competition the concept of a spatial price equilibrium underlies most studies of spatial movement and competition however this concept is based upon a notion of perfectly competitive markets that is often unrealistic for many markets such as the markets for oil and coal and ignores the existence of local spatial monopolies this paper presents alternative economic models of spatial competition and shows how all of these models can be solved with essentially the same solution algorithm specifically after reformulating the classical spatial price equilibrium model and two extensions of takayama and judge s monopoly model we state and analyze a cournot nash model and discuss solution algorithms we then generalize these models and algorithms to multiple commodities and networks with transshipment nodes we conclude with a brief discussion of possible extensions of this class of models and associated algorithms

economic growth and energy consumption the energy environmental kuznets curve for latin america and the caribbean abstract this paper investigates the relationship between economic growth and energy consumption using the hypothesis postulated for the energy environmental kuznets curve which assumes an inverted u shape relationship between income and energy consumption panel data for 22 latin american and caribbean countries for the period 1990 2011 were used absolute energy consumption was chosen as an environmental pressure indicator because energy consumption is the major contributor of emissions pollutants the results obtained in the estimations show that the hypothesis postulated for the energy environmental kuznets curve is not supported for the region on the contrary the results show an exponential growth as gross value added grows also notable differences are shown between the analyzed economies

risk and macroeconomic activity this article explores the macroeconomic role that risk plays using the baa aaa spread as the measure of risk first it shows that meaningful upward movements in this spread are associated with recessions and their severity second it includes the baa aaa spread in a structural vector autoregression var to identify a shock to risk and finds that it causes a statistically significant and economically important decrease in output as well as increased holdings of real money balances third it uses historical decompositions to show that the shock to risk explains an important part of the declines in output during four post 1970 recessions notably the shock to risk explains almost none of the decline in output during 2001 prior to the september 11 2001 terrorist attacks but does clarify why the recovery was relatively weak afterwards and it explains the bulk of the decline in output during 2008 and 2009

the effects of environmental regulation on china s total factor productivity an empirical study of carbon intensive industries abstract in this paper we first identify china s carbon intensive industries ciis by constructing a carbon intensive index taking both the scale and intensity of co2 emission into account then the strong version of porter hypothesis ph i e the positive effect of environmental regulation on total factor productivity tfp of china s ciis is tested in order to overcome the endogenous issue of model specification two stage least squares 2sls method is employed the results indicate that there is a significant inverted u shape relationship between environmental regulation intensity and the tfp of china s ciis demonstrating the inexistence of strong ph effect in a long run and the impact of environmental regulation on ciis is changing gradually from innovation offsets to compliance costs in addition optimal environmental regulation intensities for different ciis are also studied according to their locations on the inverted u shaped curve the production and supply of electric power and heat power industry has exceeded the optimal environmental regulation intensity while the remaining ciis have not reached their inflection points therefore specific policy proposals should be formulated according to the different stages of environmental regulation in various industries

learning and optimal monetary policy to conduct policy efficiently central banks must use available data to infer or learn the relevant structural relationships in the economy however because a central bank s policy affects economic outcomes the chosen policy may help or hinder its efforts to learn this paper examines whether real time learning allows a central bank to learn the economy s underlying structure and studies the impact that learning has on the performance of optimal policies under a variety of learning environments our main results are as follows first when monetary policy is formulated as an optimal discretionary targeting rule we find that the rational expectations equilibrium and the optimal policy are real time learnable this result is robust to a range of assumptions concerning private sector learning behavior second when policy is set with discretion learning can lead to outcomes that are better than if the model parameters are known finally if the private sector is learning then unannounced changes to the policy regime particularly changes to the inflation target can raise policy loss considerably

plea bargaining with the irs abstract the purpose of this paper is to propose a new evasion counteracting policy and to prove its welfare improving property the new fatota policy allows a target group of businesses to choose between the following two options paying a fixed amount of taxes thus exempting themselves from tax audits or paying only the amount they choose to pay and subject to possible tax audits it is shown that fatota is very similar to the plea bargaining system of the u s criminal proceedings and our results can be treated as an extension of the grossman katz analysis to the crime of tax evasion

real exchange rate monetary policy and the u s economy evidence from a favar model this paper examines the effects of exchange rate depreciation to the u s economy in a factor augmented vector autoregression model using monthly data of 148 variables for the post bretton woods period of 1973 2017 exchange rate shock is identified to reflect exogenous disturbances to the foreign exchange market and movements in exchange rate that are not accounted for by changes in the u s monetary policy we find that depreciation is expansionary and inflationary to the broad u s economy the current account improves over time conforming to the j curve theory and monetary policy is leaning against the wind jel e3 e5 f31 f32 f41

the great moderation of the term structure of uk interest rates abstract the conduct of monetary policy the term structure of interest rates and the structure of the economy in the uk have changed over the post wwii period we model the interaction between the macroeconomy and financial markets using a time varying var augmented with the factors from the yield curve there is evidence of a great moderation in the dynamics of the yield curve with the factors being persistent and volatile before the introduction of inflation targeting in 1992 but becoming stable afterwards the introduction of time variation in the factor augmented var improves the fit of the model and results in expectation hypothesis consistent yields that are close to actual yields even at long maturities monetary policy shocks had a significant impact on the volatility of inflation output and the policy rate over the pre inflation targeting era but their contribution has been negligible under the current regime shocks to the level of the yield curve accounted for a large fraction of inflation variability only before 1992

evolving international inflation dynamics world and country specific factors inflation in the most industrialized economies of the world has an important international common component that accounts for the historical decline in the national rates country specific conditions explain the rise in inflation volatility of the late 1970s and early 1980s and the subsequent fall during the last decade the world contribution to the variance of inflation has become increasingly more important than national contributions monetary policy was a relevant source of country specific fluctuations our conclusions are based on a time varying dynamic factor model applied to a large panel of inflation indicators

ecological total factor energy efficiency of regions in china most existing energy efficiency indices are computed without taking into account undesirable outputs such as co2 and so2 emissions this paper computes the ecological total factor energy efficiency etfee of 30 regions in china for the period 2005 2009 through the slack based model sbm with undesirable outputs we calculate the etfee index by comparing the target energy input obtained from sbm with undesirable outputs to the actual energy input findings show that china s regional etfee still remains a low level of around 0 600 and regional energy efficiency is overestimated by more than 0 100 when not looking at environmental impacts china s regional energy efficiency is extremely unbalanced the east area ranks first with the highest etfee of above 0 700 the northeast and central areas follow and the west area has the lowest etfee of less than 0 500 a monotone increasing relation exists between the area s etfee and china s per capita gdp the truncated regression model shows that the ratio of r d expenditure to gdp and the degree of foreign dependence have positive impacts whereas the ratio of the secondary industry to gdp and the ratio of government subsidies for industrial pollution treatment to gdp have negative effects on the etfee

nexus between clean energy consumption economic growth and co2 emissions abstract to investigate the nexus among clean energy consumption economic growth and co2 emissions a newly developed bootstrap ardl bounds test with structural breaks is employed to survey the cointegration and causality for g7 countries we find no cointegration among real gdp per capita clean energy consumption and co2 emissions in canada france italy the us and the uk however cointegration exists in germany when real gdp per capita and co2 emissions serve as dependent variables and in japan when co2 emissions is the dependent variable regarding the results of causality test that we find clean energy consumption causes real gdp per capita for canada germany and the us and co2 emissions causes clean energy consumption for germany besides we find feedbacks between clean energy consumption and co2 emissions for germany and unidirectional causality running from clean energy consumption to co2 emissions for the us our study has important policy implications for g7 countries conducting efficient energy use strategy to reduce co2 emissions

is the implementation of energy saving and emission reduction policy really effective in chinese cities a policy evaluation perspective abstract reducing pollutant emissions while ensuring a stable economic growth is an important embodiment of sustainable development based on the national comprehensive demonstration of energy saving and emission reduction fiscal policy eser policy proposed by the chinese government in 2011 this paper analyzes the impact of such policy on emissions reduction and economic growth under the framework of differences in differences did method this paper first identifies the implementation conditions of eser policy then we adopt three specifications to control the endogenous problem for the selection of demonstration cities the robustness test verifies the reliability of our findings and the spillover effect analysis reveals the deficiency of this policy we reach the following conclusions 1 different from the previous studies we find that the eser policy can effectively reduce the pollutant emissions while ensuring a stable economic growth 2 however the event study reveals that the reduction effect is only existing in the demonstration period which means that this policy is not sustainable 3 furthermore we find no spillover effect of eser policy on the non policy targeted pollutant suggesting that the local government only cares about the reduction of policy targeted pollutants based on these findings we propose that the future energy saving and emissions reduction policy formulation should focus on the policy sustainability and overall environmental performance

evolving post world war ii u k economic performance in this paper we use tests for multiple structural breaks at unknown points in the sample and band pass filtering techniques to investigate changes in u k economic performance since the end of world war ii empirical evidence suggests that the most recent decade associated with the introduction of an inflation targeting regime has been significantly more stable than the previous post wwii era both for real gdp growth and for three measures of inflation we identify break dates around the time of the introduction of inflation targeting in october 1992 for all four series the estimated innovation variance over the most recent sub period is the lowest of the post wwii era the volatility of the band pass filtered macroeconomic indicators we consider is after 1992 almost always lower than either during the bretton woods regime or over the 1971 92 period often like in the case of inflation and real gdp markedly so the phillips correlation appears to have undergone significant changes over the last 50 years from being unstable in the 1970s to slowly stabilising from the beginning of the 1980s onwards after 1992 the correlation exhibits by far the greatest extent of stability of the post wwii era

a method for analyzing pollution control policies application to so2 emissions in china abstract market based pollution control mechanisms such as pollution levy and cap and trade have received increasing attention from both academics and practitioners a good understanding of the optimal pollution price under these mechanisms is a premise for regulators to make sound pollution control policies in this paper we propose a method for deriving the optimal pollution price for a given pollution target this method consists of two steps that integrate cost function estimation and market equilibrium analysis first historical data is used to estimate the pollution abatement cost functions of the polluters second market models are used to solve the equilibrium pollution price under each control mechanism for illustration we apply the method to investigate so 2 emission control policies in china using a dataset of so 2 emissions and abatement costs from three major industry sectors electricity gas and water supply manufacturing and mining our analysis shows that the optimal levy rate is significantly higher than the actual rate adopted by the chinese government for example the optimal levy rate should be 4 92 rmb kg while the actual rate is 1 26 rmb kg in 2010 as a result the actual emission structure is much less efficient the overall cost savings would be 49 7 for all three sectors during 2006 2010 if the optimal emission structure is achieved these findings have useful policy implications for the chinese government in addition the method may be applied to analyze control policies at different aggregate levels for example provincial economies or for other pollutants for example co 2 and chemical oxygen demand

what lies beneath a time varying favar model for the uk transmission mechanism we use a time varying factor augmented var to investigate changes in the transmission mechanism of economic shocks in the uk our estimates demonstrate the importance of time variation and suggest that monetary policy shocks had a bigger impact on inflation equity prices and the exchange rate during the inflation targeting period changes in the transmission of policy shocks to bond yields point to more efficient management of long run inflation expectations finally we investigate responses of disaggregated prices with the median becoming more negative and cross sectional patterns consistent with a decrease in the role of cost channels

monetary policy shifts and long term interest rates the pure expectations hypothesis peh serves as the benchmark model for the relationship between yields on bonds of different maturities when coupled with rational expectations however empirical renderings of the model fail miserably i explore the possibility that failure to account for changes in monetary policy regime explains much of the failure of the peh estimating changing monetary regimes in conjunction with the peh significantly improves its performance the predicted spread between the long and short rates is highly correlated with the actual spread the standard deviation of the theoretical spread is nearly identical to that of the actual spread

the expectations hypothesis new hope or illusory support abstract recent studies of the expectations hypothesis of the term structure ehts find evidence in favor of the ehts using post 1980s us data this has been attributed to the relative macro stability of this period and greater market efficiency using a panel of forecasts for 3 month interest rates for ten countries we test separately for ehts and rational expectations assuming rational expectations holds we find support for the ehts is illusory due to an off setting time varying term premia and non rational expectations previous forecast based studies suggest biased expectations tend to reinforce the effect of a time varying term premium this change can be understood in the context of fama s 2006 argument that markets tend to underestimate future spot rates during periods of long run increases and overestimate during declines

product line selection production decisions and allocation of common fixed costs abstract product costs are determined in practice for the purpose of pricing make buy and product line decisions while many costs are directly assignable to individual products common costs have historically presented a difficult conundrum a variety of cost allocation methods are used in practice or have been suggested in the literature to attach these costs to individual products while such procedures are theoretically unsupported they may be able to mimic the correct decisions adequately in this paper we investigate the efficacy of certain cost allocation schemes in a competitive environment the schemes are evaluated with reference to a scenario in which there is a single fixed cost incurred in manufacturing any subset of a set of products under idealized conditions a cournot nash model is developed that describes the number of entering firms and the equilibrium price and production levels using this as a point of reference it is shown that by using gross contribution as an allocation basis optimal product line decisions are achieved without distorting the selection of production levels moreover competitive pressure sufficient to drive total net profits close to zero is sufficient to require that any allocation rule supporting optimal product line decisions yields allocations nearly proportional to gross contributions an analogy is drawn with the allocation of joint costs to coproducts in a competitive environment and the corresponding allocation in proportion to net realizable value

television and voter turnout i use variation across markets in the timing of television s introduction to identify its impact on voter turnout the estimated effect is significantly negative accounting for between a quarter and a half of the total decline in turnout since the 1950s i argue that substitution away from other media with more political coverage provides a plausible mechanism linking television to voting as evidence for this i show that the entry of television in a market coincided with sharp drops in consumption of newspapers and radio and in political knowledge as measured by election surveys i also show that both the information and turnout effects were largest in off year congressional elections which receive extensive coverage in newspapers but little or no coverage on television

does flattening government improve economic performance evidence from china this paper examines a causal relationship between the flattening of a government hierarchy and economic performance by exploiting a panel data set on government reorganization in china from 1995 to 2012 delayering has led to increases in revenue and inter governmental transfers for county governments but the associated enlarged span of control makes it difficult for upper level governments to coordinate and monitor local ones this has led to a reduction in county governments total public expenditure and pro growth expenditure as well as an increase in land corruption overall the flattening of the government hierarchy has a negative effect on economic performance

self fulfilling expectations and the inflation of the 1970s evidence from the livingston survey abstract using survey data on expectations we examine whether the response of monetary policy to sudden movements in expected inflation contributed to the persistent high inflation of the 1970s the evidence suggests that prior to 1979 the fed accommodated temporary shocks to expected inflation which then led to persistent increases in actual inflation we do not find this behavior in the post 1979 data among commonly cited factors oil and fiscal shocks do not appear to have triggered an increase in expected inflation that eventually resulted in higher actual inflation

locating public facilities by majority stability consistency and group formation abstract we consider the following allocation problem a fixed number of public facilities must be located on a line society is composed of n agents who must be allocated to one and only one of these facilities agents have single peaked preferences over the possible location of the facilities they are assigned to and do not care about the location of the rest of facilities there is no congestion we show that there exist social choice correspondences that choose locations and assign agents to them in such a way that 1 these decisions are condorcet winners whenever one exists 2 the majority of the users of each facility supports the choice of its location and 3 no agent wishes to become a user of another facility even if that could induce a change of its present location by majority voting

cost allocation and opportunity costs one explanation for the widespread use of allocated fixed costs is that they can serve as a proxy for difficult to calculate opportunity costs this explanation is pursued by modeling a service department as an m m s s queueing system two main results are that the expected value of opportunity costs equals both the incremental productivity of capacity and the optimal transfer price when the cost of capacity is of the form cs as and is close to one we show that allocated fixed costs are a good proxy for average opportunity costs however if there are great economies of scale is close to zero then a method which charges users only for the variable costs of the service department is recommended finally the economic efficiency of transfer prices based on either variable cost or full cost is compared with optimal transfer pricing policies

asymmetric information incentives and intrafirm resource allocation this paper considers the question how should a firm allocate a resource among divisions when the productivity of the resource in each division is known only to the division manager obviously if the divisions as represented by their managers are indifferent among various allocations of the resource the headquarters can simply request the division managers to reveal their private information on productivity knowing that the managers have no incentive to lie the resource allocation problem can then be solved under complete or at least symmetric information this aspect is a flaw in much of the recent literature on this topic i e there is nothing in the models considered which makes divisions prefer one allocation over another thus although in some cases elaborate allocation schemes are proposed and analyzed they are really unnecessary in the model we develop a division can produce the same output with less managerial effort if it is allocated more resources and effort is costly to the manager we further assume that this effort is unobservable by the headquarters so that it cannot infer divisional productivity from data on divisional output and managerial effort given these assumptions we seek an optimal resource allocation process our results show that certain types of transfer pricing schemes are optimal in particular if there are no potentially binding capacity constraints on production of the resource then an optimal process is for each division to choose a transfer price from a schedule announced by the headquarters division managers receive a fixed compensation minus the cost of the resource allocated to them at the chosen transfer price resources are allocated on the basis of the chosen transfer prices if there is a potentially binding constraint on resource production a somewhat more complicated but similar scheme is required

has monetary policy become more effective we investigate the implications of changes in the structure of the u s economy for monetary policy effectiveness estimating a vector autoregression over the pre and post 1980 periods we provide evidence of a reduced effect of monetary policy shocks in the latter period we estimate a structural model that replicates well the economy s response in both periods and perform counterfactual experiments to determine the source of the change in the monetary transmission mechanism and in the economy s volatility we find that by responding more strongly to inflation expectations monetary policy has stabilized the economy more effectively in the post 1980 period

aggregate production planning for process industries under oligopolistic competition abstract we consider a competitive version of the traditional aggregate production planning model with capacity constraints in the general case multiple products are produced by a few competing producers oligopoly with limited capacities production quantities prices and consequently profits depend on production and allocation decisions of each producer in addition there is competition for the raw material whose supplies are limited and where prices reflect these limitations such situations have recently occurred in several process industry settings including petro refining petrochemicals basic chemicals cement fertilizers pharmaceuticals rubber paper food processing and metals we use a successive bertrand cournot framework to address this problem and to determine optimal production quantities prices and profits at the producers and at the raw material supplier our analysis allows a new way to understand and evaluate the marginal value of additional capacity when there is competition for the market and raw materials

two player simultaneous location game preferential rights and overbidding abstract competitive location problems can be characterized by the fact that the decisions made by others will affect our own payoffs in this paper we address a discrete competitive location game in which two decision makers have to decide simultaneously where to locate their services without knowing the decisions of one another this problem arises in a franchising environment in which the decision makers are the franchisees and the franchiser defines the potential sites for locating services and the rules of the game at most one service can be located at each site and one of the franchisees has preferential rights over the other this means that if both franchisees are interested in opening the service in the same site only the one that has preferential rights will open it we consider that both franchisees have budget constraints but the franchisee without preferential rights is allowed to show interest in more sites than the ones she can afford we are interested in studying the influence of the existence of preferential rights and overbidding on the outcomes for both franchisees and franchiser a model is presented and an algorithmic approach is developed for the calculation of nash equilibria several computational experiments are defined and their results are analysed showing that preferential rights give its holder a relative advantage over the other competitor the possibility of overbidding seems to be advantageous for the franchiser as well as the inclusion of some level of asymmetry between the two decision makers

competitive location production and market selection abstract this paper investigates how firms should select their production sites capacities and quantities under rivalry there are assumed to be a finite number of discrete potential location sites and a finite number of discrete markets which may or may not coincide firms first decide either simultaneously or sequentially whether and where to establish a production site the fixed cost of opening a facility and the marginal cost of production both depend on where the facility is located firms then choose capacity and a production quantity for each market prices in each market are determined by the total quantity available at that location via the cournot mechanism this formulation thus addresses multi market oligopolistic spatial competition with heterogeneity in production and logistics costs we then analyze the nash equilibria of the entry game and provide sufficient conditions for the existence of equilibria in the simultaneous entry game at equilibrium firms may not produce for all markets and may have limited market areas however these areas may overlap so that there are multiple suppliers in any market in general there may not be a first mover advantage and early entrants may earn lower profits than later entrants

relevant costs congestion and stochasticity in production environments abstract conventional management accounting principles used to evaluate relevant costs have been developed under the assumption of deterministic manufacturing settings manufacturing operations however are complex and stochastic in this paper we examine the impact of stochasticity in the production process on relevant costs based on a dynamic assessment of capacity constraints we develop a model to analyze the behavior of relevant costs with respect to changes in the expected duration and variability in set ups and processing an implication of this analysis is that for profit maximization capacity will exceed expected demand if production rates or demand are stochastic

perception and information in a competitive location model this paper considers a situation in which two competitors locate one facility each at the vertices of a tree their decisions are based on the capture of demands at the vertices of the tree as opposed to the usual models it is assumed that the true demands are unknown and that each competitor has its own perception of them the paper investigates a facility planner s advantage that results from knowledge concerning his competitor s perception stackelberg solutions are analyzed as well as possible advantages to the competitor who locates first

competition through capacity investment under asymmetric existing capacities and costs this paper discusses the way that different operational characteristics including existing capacity scale economies and production policy have an important influence on the capacity outcomes when firms compete in the market place we formulate a game theoretical model where each firm has an existing capacity and faces both fixed and variable costs in purchasing additional capacity specifically the firms simultaneously or sequentially make their expansion decisions and then simultaneously decide their production decisions with these outputs being capacity constrained we also compare our results with cases where production has to match capacity by characterizing the firms capacity and production choices in equilibrium our analysis shows that the operational factors play a crucial role in determining what happens the modeling and analysis in the paper gives insight into the way that the ability to use less production capacity than has been built will undermine the commitment value of existing capacity if a commitment to full production is not possible sinking operational costs can enable a firm to keep some preemptive advantage we also show that the existence of fixed costs can introduce cases where there are either no pure strategy equilibrium or multiple equilibria the managerial implications of our analysis are noted in the discussion our central contribution in this paper is the innovative integration of the strategic analysis of capacity expansion and well known s s policy in operations and supply chain theory

estimating the evolution of money s role in the u s monetary business cycle we assess money s role in the post wwii u s business cycle by employing both fixed coefficient and rolling window bayesian estimations of a structural model of the business cycle with money our empirical evidence favors a specification with drifting parameters for money consumption nonseparability and the federal reserve s reaction to nominal money growth the role of money is estimated to have been important during the 1970s and declined afterward the omission of money produces severely distorted impulse response functions relative to the model with money money is found to be important in replicating the u s output volatility during the great inflation

estimating and forecasting the yield curve using a markov switching dynamic nelson and siegel model we estimate versions of the nelson siegel model of the yield curve of u s government bonds using a markov switching latent variable model that allows for discrete changes in the stochastic process followed by the interest rates our modeling approach is motivated by evidence suggesting the existence of breaks in the behavior of the u s yield curve that depend for example on whether the economy is in a recession or a boom or on the stance of monetary policy our model is parsimonious relatively easy to estimate and exible enough to match the changing shapes of the yield curve over time we also derive the discrete time non arbitrage restrictions for the markov switching model we compare the forecasting performance of these models with that of the standard dynamic nelson and siegel model and an extension that allows the decay rate parameter to be time varying we show that some parameterizations of our model with regime shifts outperform the single regime nelson and siegel model and other standard empirical models of the yield curve

the yield curve and the macro economy across time and frequencies this paper assesses the relation between the yield curve and the main macroeconomic variables in the u s between early 1960s and 2009 across time and frequencies using wavelet analyses the shape of the yield curve is modelled by latent factors corresponding to its level slope and curvature estimated by maximum likelihood with the kalman filter the macroeconomic variables measure economic activity unemployment inflation and the fed funds rate the cross wavelet tools employed coherency and phase difference the set of variables and the length of the sample allow for a thorough appraisal of the timevariation and structural breaks in the direction intensity synchronization and periodicity of the relation between the yield curve and the macro economy our evidence establishes a number of new stylized facts on the yield curve macro relation and sheds light on several results found in the literature which could not have been achieved with analyses conducted strictly in the time domain as most of the literature or purely in the frequency domain

a hybrid spline based parametric model for the yield curve empirical evidence indicates that both nominal and real yield curves in important markets have segmentation between their short end and their longer maturity segments this segmentation might affect term structure estimation introducing distortions in longer maturity yields especially in parametric models in order to deal with such segmentation we propose a new model that combines the flexibility of spline functions with the parsimoniousness of a parametric four factor exponential model the short end of the yield curve is fitted using a b spline function while longer segments are captured by the parametric model we illustrate the benefits of the proposed model for pricing and risk management purposes using two examples the real yield curve in the brazilian government index linked bond market and the us treasury nominal yield curve we show that in both markets our model is simultaneously able to fit the yield curve well and to provide unbiased value at risk estimates for all tested portfolios of bonds outperforming an important parametric benchmark model frequently adopted by central banks

decomposing real and nominal yield curves abstract inflation indexed and nominal yield curves capture investors expectations of real short rates and inflation as well as their required compensation for bearing liquidity inflation and real interest rate risk we estimate an affine term structure model that allows us to decompose real and nominal bond yields into these components and use the model to study the transmission of monetary policy the model decompositions imply that the federal reserve s announcements of lsaps lowered yields primarily by reducing real term premia changes in real term premia also account for the strong response of long term real forward rates to federal funds rate surprises

do energy efficiency policies save energy a new approach based on energy policy indicators in the eu member states abstract over the last two decades the european union and its member states have introduced policies aimed at improving energy efficiency the energy service directives esd introduced the concept of measurement of energy savings attributed to policies two different and complementary methodologies for the evaluation of energy savings have been developed under the esd the bottom up bu approach based on a technical analysis of each measure and the top down td approach based on the analysis of how energy intensity changes over time bu methods can hardly take into account policy induced behavioural changes whereas td methods have difficulties in disentangling policy induced savings from other savings econometric models have been proposed as a viable alternative to deal with both drawbacks the purpose of this article is to present an econometric model aimed at estimating the energy savings induced by energy efficiency policies in the eu member states in the period 1990 2013 we introduce an explicit measure of energy policy intensity based on the mure database which is used as explanatory variable in a dynamic panel model for 29 european countries our results suggest that energy consumption in 2013 in europe would have been about 12 higher in the absence of energy efficiency policies

the dynamics of price quality and productivity improvement decisions abstract although quality has received significant attention during the last decades and its economic benefits are beyond any doubt lots of questions have remained unanswered as to how much when and in what to invest to maintain sustainable competitive advantage a model is introduced here to guide a firm in addressing these questions the firm produces a single product and operates in a market where monopolistic competition is effective demand for the product in the industry depends on both price and performance quality increasing productivity knowledge decreases unit production cost but demand for the company s product decreases over time as competitors will be able to offer products with similar performance productivity and quality knowledge can be developed through induced and autonomous learning in order to strengthen company position the paper provides an optimal control formulation of the problem and develops necessary conditions for optimality and characterizes the dynamics of optimal price quality and investment decisions

a comprehensive analysis of china s regional energy saving and emission reduction efficiency from production and treatment perspectives abstract energy and environmental issues have recently aroused increasing interest in china and many approaches are used to evaluate energy and environmental performance in this paper a two stage network dea framework is applied to evaluate the efficiency of energy saving and emission reduction in china during the period of the eleventh five year plan from 2006 to 2010 in this study economic activities are divided into production and treatment processes this is different from previous research which generally focused on either environmental efficiency or energy efficiency omitting the integration of energy and environmental measures today energy saving and emission reduction are both parts of the basic state policy of china and are equally important the empirical results in this study show that i eastern china has the best energy saving and emission reduction efficiency performing is better than western and central china ii the efficiency of the production process in central china is better than that in western china while the western area performs better than the central area in term of treatment efficiency iii integrated efficiency of energy saving and emission reduction of china was relatively stable in the five years and the pollution treatment efficiency maintained a rising trend

product balancing under conditions of quality inflation cost pressures and growth strategies abstract this paper analyzes an organization that has a well defined strategy providing a sustainable competitive advantage this advantage is expressed by at least one dimension of quality on which the product or service exhibits outstanding performance using decreasing and increasing exponential demand functions for price and quality respectively the optimal quality level is characterized when dollar sales volume under a cost based price floor and profit are maximized however as quality inflates the same quality performance is worth less tomorrow than today this paper shows that continuous and simultaneous improvement of operational efficiency and quality is a must and is independent from price setting policies the condition of optimal trade offs among quality dimensions is found for the case when the company competes on multiple quality dimensions finally the conditions are analyzed when the resources of quality are utilized in other market segments as well it is found that the corporate level quality or the utilization level of resources is lower higher than the highest least individual business unit product quality

competition and structure in serial supply chains with deterministic demand supply chains often consist of several tiers with different numbers of firms competing at each tier a major determinant of the structure of supply chains is the cost structure associated with the underlying manufacturing process in this paper we examine the impact of fixed and variable costs on the structure and competitiveness of supply chains with a serial structure and price sensitive linear deterministic demand the entry stage is modeled as a simultaneous game where the players take the outcomes of the subsequent post entry cournot competition into account in making their entry decisions we derive expressions for prices and production quantities as functions of the number of entrants at each tier of a multitier chain we characterize viability and stability of supply chain structures and show using lattice arguments that there is always an equilibrium structure in pure strategies in the entry game finally we examine the effects of vertical integration in the two tier case altogether the paper provides a framework for comparing a variety of supply chain structures and for studying how they are affected by cost structures and by the number of entrants throughout the chain

accounting for a shift in term structure behavior with no arbitrage and macro finance models this paper examines a shift in the dynamics of the term structure of interest rates in the u s during the mid 1980s we document this shift using standard interest rate regressions and using dynamic a ne no arbitrage models estimated for the pre and post shift subsamples the term structure shift largely appears to be the result of changes in the pricing of risk associated with a level factor using a macro nance model we suggest a link between this shift in term structure behavior and changes in the dynamics and risk pricing of the federal reserve s in ation target as perceived by investors

environmental regulation and environmental productivity the case of china abstract constrained by the dual mission of supporting industrial growth and reducing emissions china s traditional emission reduction oriented environmental policies unavoidably face a dilemma this study adopts the gml index to calculate china s industrial productivity by considering environmental factors in addition based on the assumption of industry heterogeneity the author examines the non linear relationship between china s environmental regulation and environmental productivity and calculated the optimal regulation environment for industries according to this study when impact of undesirable outputs pollutant emissions is considered environmental regulation and environmental productivity are positively correlated which to some degree validates the porter hypothesis at present environmental regulation has significant positive effects on clean production industries but shows a lag effect on pollution intensive industries the degree of environmental regulation and environmental productivity show an inverted u shaped relation and display three thresholds it should be noted however that the relationship between regulation and productivity may vary across industries these findings have clear policy implications rather than continually increasing the level of environmental regulation the government should establish standards for individual industries that emphasize flexibility