the american business cycle continuity and change in recent decades the american economy has experienced the worst peace time inflation in its history and the highest unemployment rate since the great depression these circumstances have prompted renewed interest in the concept of business cycles which joseph schumpeter suggested are like the beat of the heart of the essence of the organism that displays them in the american business cycle some of the most prominent macroeconomics in the united states focuses on the questions to what extent are business cycles propelled by external shocks how have post 1946 cycles differed from earlier cycles and what are the major factors that contribute to business cycles they extend their investigation in some areas as far back as 1875 to afford a deeper understanding of both economic history and the most recent economic fluctuations seven papers address specific aspects of economic activity consumption investment inventory change fiscal policy monetary behavior open economy and the labor market five papers focus on aggregate economic activity in a number of cases the papers present findings that challenge widely accepted models and assumptions in addition to its substantive findings the american business cycle includes an appendix containing both the first published history of the nber business cycle dating chronology and many previously unpublished historical data series

vertical antitrust policy as a problem of inference the legality of nonprice vertical practices in the u s is determined by their likely competitive effects an optimal enforcement rule combines evidence with theory to update prior beliefs and specifies a decision that minimizes the expected loss because the welfare effects of vertical practices are theoretically ambiguous optimal decisions depend heavily on prior beliefs which should be guided by empirical evidence empirically vertical restraints appear to reduce price and or increase output thus absent a good natural experiment to evaluate a particular restraint s effect an optimal policy places a heavy burden on plaintiffs to show that a restraint is anticompetitive

vertical control opportunism and risk sharing abstract a manufacturer who offers secret contracts faces an opportunism problem she undercuts her own input prices and fails to offset retail competition i show that this problem diminishes when retailers are risk averse and face demand uncertainty risk aversion and uncertainty create a bilateral risk sharing incentive that raises equilibrium input prices above marginal cost the manufacturer can therefore profit from downstream risk aversion when retail competition is fierce

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

on governing multilateral transactions with bilateral contracts bilateral contracts while neither negotiated nor enforced in an integrated way are nevertheless often interrelated both economically and strategically owing to production or consumption complementarities and to asymmetric information a set of bilateral contracts forms a mechanism with special properties this mechanism forms a contract equilibrium if there is no joint incentive for a supplier and any individual customer unilaterally to alter the terms of their contract if agents preferences are risk neutral in money income and if their private information is independent then there exists a contract equilibrium that implements efficient transactions if in addition preferences are strictly concave and differentiable in goods and services and technologically feasible sets are suitably convex then this equilibrium is essentially unique

convenient prices currency and nominal rigidity theory with evidence from newspaper prices abstract certain items prices are often set to simplify and expedite transactions by coinciding with available monetary units requiring few pieces of money or requiring little change in this sense these prices are more convenient than other proximate prices this paper models a firm that explicitly incorporates convenience into its pricing decisions where convenience is quantified by the number of currency units in a transaction and illustrates the theoretical behaviors that can arise newspaper cover price data empirically support the theory across a broader range of goods and services convenience appears to play a role in effecting above average nominal price rigidity

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

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

the non existence of pairwise proof equilibrium abstract private bilateral contracting between a supplier and competing customers admits multiple equilibria we show that requiring equilibrium to be pairwise proof immune to bilateral deviations by the supplier and any customer can imply non existence of equilibrium in normal environments

modeling denomination structures previous work on the denomination structure of currency treats as exogenous the distribution of transactions and the denominations held by people here by way of a matching model both are endogenous in the model trades in pairwise meetings alternate in time with the opportunity to freely choose a portfolio of denominations and there is a trade off between the benefits of small denomination money for transacting and the costliness of carrying a large quantity of small denomination money for a given denomination structure a monetary steady state is shown to exist the model implies that too small denominations are abandoned

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

menu costs and the neutrality of money a model of endogenous price adjustment under money growth is presented firms follow s s pricing policies and price revisions are imperfectly synchronized in the aggregate price stickiness disappears and money is neutral the connection between firm price adjustment and relative price variability in the presence of monetary growth is also investigated the results contrast with those obtained in models with exogenous fixed timing of price adjustment

circulation versus advertiser appeal in the newspaper industry an empirical investigation advertising space is not a homogeneous commodity but something whose value depends on the characteristics of a newspaper s readership it is suggested in particular that the proportion of readers belonging to the more affluent social categories will exert a strong positive influence on advertising this paper investigates the circulation readership profile relation using a simple simultaneous equation framework the model is then estimated across a sample of british and irish daily and sunday newspapers using data collected from industry sources the paper then seeks to quantify the trade off between circulation and the proportion of high income readers copyright 1989 by blackwell publishing ltd

on the welfare effects of vertical integration opportunism vs double marginalization abstract we investigate the welfare effects of vertical integration by an upstream supplier dealing with two downstream firms through secret linear tariffs we show that whether vertical integration is anti or procompetitive depends on the distribution of the bargaining power between firms in the pre integration case in particular when the supplier has all or at least higher bargaining power than downstream firms vertical integration is socially desirable on the contrary when downstream firms have all or at least higher bargaining power than the supplier integration is detrimental to society

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

foreign direct investment in vertically related markets we study an mne s choice of fdi mode in a vertically related market with local input sourcing we show how the market s vertical structure and trading features affect this choice an mne s incentives to expand through cross border acquisition rather than through greenfield investment are stronger in markets with higher upstream bargaining power upstream concentration and unobservable contract terms the opposite holds in markets in which wholesale price contracts instead of two part tariffs are used our welfare analysis suggests that the host country should not always welcome fdi and should discourage fdi through acquisition investissements exterieurs directs sur les marches verticaux dans cet article nous etudions le choix d une entreprise multinationale de proceder a un investissement exterieur direct dans un marche vertical avec sources d approvisionnement locales nous montrons la facon dont la structure verticale et les caracteristiques commerciales du marche ont une incidence sur une telle decision les mesures incitatives offertes aux entreprises multinationales pour se developper par l entremise d acquisitions transfrontalieres plutot que par l investissement dans de nouvelles installations sont plus fortes sur les marches dotes d un pouvoir de negociation et d une concentration en amont plus eleves ainsi que par des conditions contractuelles non observables l inverse s observe sur les marches ou les contrats a prix de gros sont utilises en lieu et place des tarifs binomes en termes de bien etre notre analyse suggere que le pays hote ne devrait pas toujours accueillir les investissements exterieurs directs et devrait decourager ces memes investissements realises par l entremise d acquisitions

prices for cash and cash for prices theory and evidence on convenient pricing a transaction between a seller and a buyer incurs a payment cost the payment cost is borne by the seller depending on the payment instrument the buyer chooses cash or card card payment is more costly than cash payment so the seller prefers that the buyer pays cash in this article we study the strategy of the seller setting a convenient price which simplifies transactions and pushes the buyer to pay cash the theoretical analysis which models both the seller and the buyer in a game setting derives two propositions 1 the seller is more likely to set a more convenient price and 2 the buyer is more likely to pay cash a more convenient price the empirical analysis supports both propositions thus sellers adopt a convenience pricing strategy prices for cash and this strategy pushes buyers to pay cash cash for prices

upstream horizontal mergers vertical contracts and bargaining abstract we study horizontal mergers in the upstream sectors of vertically related industries when bargaining is present and contract types are endogenous we demonstrate that the contract types used can have significant implications for the equilibrium market structure and vice versa when trading takes place through two part tariff contracts merger incentives are absent however when the downstream firms are powerful merger incentives are restored since the merger leads then either to the exclusive or to the partial use of wholesale price contracts finally we show that whenever a merger occurs it is welfare detrimental

price stickiness empirical evidence of the menu cost channel abstract a leading explanation in the economic literature is that monetary policy has real effects on the economy because firms incur a cost when changing prices using a unique database of cost and retail price changes we find that variation in menu costs results in up to 13 3 fewer price increases we confirm that these effects are allocative and have a persistent impact on both prices and unit sales we provide evidence that the menu cost channel operates only when cost increases are small in magnitude which is consistent with theory and provides the first empirical evidence of boundary conditions

menu costs posted prices and multiproduct retailers we use a unique store level data set to directly measure menu costs and to study the price change process at a large u s drugstore chain we compare and contrast the magnitude of these measures with similar measures from four large u s supermarket chains we find that 1 the actual magnitude of menu costs as a share of revenues 2 menu costs per price change 3 the frequent use of promotional pricing and 4 the use of weekly pricing rules are similar across both retail formats given that the main common features of these two types of retail formats are that i they both use posted prices and ii both are multiproduct retailers selling a large number of products our findings suggest that the magnitude of the menu cost components we measure and the price change practices we document may be generalizable across retail formats with these two features

on vertical relations and the timing of technology adoption we study the timing of new technology adoption in markets with input outsourcing and thus with vertical relations we find that technology adoption can take place earlier when firms engage in input outsourcing than when they produce the input in house hence the presence of vertical relations can accelerate the adoption of a new technology we also find that particular features of a vertically related market such as the distribution of bargaining power and the contract type through which trading is conducted can crucially affect the speed of technology adoption

bilateral monopolies and incentives for merger the paper presents a model of duopoly in which firms acquire inputs through bilateral monopoly relations with suppliers it combines a bargaining model with a duopoly model to examine how input pri

controlling opportunism in vertical contracting when production precedes sales in a make to stock vertical contracting setting with private contracts when retailers do not observe each other s stocks before choosing their prices an opportunism problem always exist in contract equilibria but public market wide resale price maintenance rpm can restore monopoly power however other widely used tools which do not fall under antitrust scrutiny and require only private bilateral contracts such as buyback contracts also allow the producer to fully exercise his monopoly power we conclude that a more lenient policy toward rpm is unlikely to affect the producer s ability to control opportunism

vertical separation with private contracts we consider a manufacturer s incentive to sell through an independent retailer rather than directly to final consumers when contracts with retailers cannot be observed by competitors if retailers conjecture that identical competing manufacturers always offer identical contracts symmetric beliefs manufacturers choose vertical separation in equilibrium even with private contracts vertically separated manufacturers reduce competition and increase profits by inducing less aggressive behaviour by retailers in the final market manufacturers profits may be higher with private than with public contracts our results hold both with price and with quantity competition and do not hinge on retailers beliefs being perfectly symmetric we also discuss various justifications for symmetric beliefs including incomplete information

sticky prices new evidence from retail catalogs this paper presents new results on the size frequency and synchronization of price changes for twelve selected retail goods over the past 35 years three basic facts about the data are uncovered first nominal prices are typically fixed for more than one year although the time between changes is very irregular second prices change more often during periods of high overall inflation third when prices do change the sizes of the changes are widely dispersed both large and small changes occur for the same item and the sizes of these changes do not closely depend on overall inflation

price points and price dynamics abstract a standard model of price setting is extended to include an important role for price points as well as sticky information it makes empirically reasonable predictions about the frequency of price adjustments the sizes of price increases and decreases the shape of the hazard function the fraction of price changes that are price increases and the relationship between price changes and inflation when the model of price setting is integrated into a small scale dsge model it implies plausible aggregate effects of monetary policy in contrast to a model with a prominent role for price points but no information rigidities

vertical contracting with informational opportunism we consider vertical contracting arrangements between a manufacturer and a retailing network when retailers have private information and the organization is run through bilateral contracts we highlight a new form of informational opportunism arising when the manufacturer manipulates information learned separately in each relationship we characterize the set of allocations robust to such opportunism by means of simple ex post incentive compatibility constraints those constraints limit the manufacturer s ability to use yardstick competition among retailers they simplify contracts and restore a rent efficiency trade off even with correlated information we show that sell out contracts are optimal under a wide range of circumstances

indirect versus direct constraints in markets with vertical integration for an assessment of market power on the wholesale or merchant market in the presence of vertically integrated firms we analyze the interaction of direct constraints arising from competition on the wholesale market and of indirect constraints arising from substitution on the retail market a vertically integrated firm that still participates in the merchant market exerts both direct and indirect constraints we analyze the factors that determine the importance of indirect constraints we find that in contrast to a common presumption indirect constraints are sometimes more powerful than direct constraints we furthermore analyze the incentives of integrated firms to still participate in the merchant market provided that this is technologically feasible

strategic incentives when supplying to rivals with an application to vertical firm structure abstract we consider a vertically integrated input monopolist supplying to a differentiated downstream rival with linear input pricing at the margin the firm unambiguously wants the rival to expand unlike standard oligopoly with no supply relationship for either cournot or bertrand competition with a two part tariff for the input the same result holds if downstream choices are strategic complements but is reversed for cournot with strategic substitutes we analyze vertical delegation as one mechanism for inducing expansion or contraction by the rival customer

vertical integration foreclosure and productive efficiency we analyze the consequences of vertical integration by a monopoly producer dealing with two retailers downstream firms of varying efficiency via secret two part tariffs when integrated with the inefficient retailer the monopoly producer does not foreclose the rival retailer due to an output shifting effect this effect can induce the integrated firm to engage in below cost pricing at the wholesale level thereby rendering integration procompetitive output shifting arises with homogeneous and differentiated products moreover we show that integration with an inefficient retailer emerges in a model with uncertainty over retailers costs and this merger can be procompetitive in expectation

price discrimination and sequential contracting in monopolistic input markets abstract this paper examines the welfare implication of banning price discrimination in the intermediate goods market in which a monopolistic supplier contracts with asymmetric downstream retailers we demonstrate that the supplier has a strong incentive to manipulate the interdependent demand structure through sequential contracting whether price discrimination is banned or not and allowing price discrimination improves social welfare and consumer surplus when sequential contracting is implemented by the supplier

the nash bargaining solution in vertical relations with linear input prices abstract we re examine the nash bargaining solution when an upstream and n downstream firms bargain over a linear input price with unobservable contracts we show that the profit sharing rule is given by a simple and instructive formula which depends on the parties disagreement payoffs the profit weights in the nash product and the elasticity of derived demand a downstream firm s profit share increases in the equilibrium derived demand elasticity which in turn depends on the final goods demand elasticity

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

robust predictions for bilateral contracting with externalities the paper studies bilateral contracting between one principal and n agents when each agent s utility depends on the principal s unobservable contracts with other agents we show that allowing deviations to menu contracts from which the principal chooses bounds equilibrium outcomes in a wide class of bilateral contracting games without imposing ad hoc restrictions on the agents beliefs this bound yields for example competitive convergence as n in environments in which an appropriately defined notion of competitive equilibrium exists we also examine the additional restrictions arising in two common bilateral contracting games the offer game in which the principal makes simultaneous offers to the agents and the bidding game in which the agents make simultaneous offers to the principal

the magnitude of menu costs direct evidence from large u s supermarket chains we use store level data to document the exact process of changing prices and to directly measure menu costs at five multistore supermarket chains we show that changing prices in these establishments is a complex process requiring dozens of steps and a nontrivial amount of resources the menu costs average 105 887 year per store comprising 0 70 percent of revenues 35 2 percent of net margins and 0 52 price change these menu costs may be forming a barrier to price changes specifically 1 a supermarket chain facing higher menu costs due to item pricing laws that require a separate price tag on each item changes prices two and one half times less frequently than the other four chains 2 within this chain the prices of products exempt from the law are changed over three times more frequently than the products subject to the law in principle fixed costs of changing prices can be observed and measured in practice such costs take disparate forms in different firms and we have no data on their magnitude so the theory can be tested at best indirectly at worst not at all alan blinder 1991 p 90

vertical integration in the presence of upstream competition we analyse vertical integration when there is upstream competition and compare outcomes to the case where upstream assets are owned by a single agent i e upstream monopoly in so doing we make two contributions to the modelling of strategic vertical integration first we base industry structure namely the ownership of assets firmly within the property rights approach to firm boundaries second we model the potential multilateral negotiations using a fully specified non cooperative bargaining model designed to easily compare outcomes achieved under upstream competition and monopoly given this we demonstrate that vertical integration can alter the joint payoffs of integrating parties in ex post bargaining however this bargaining effect is stronger for firms integrating under upstream competition than upstream monopoly we also consider the potential for integration to internalise competitive externalities in manner that cannot be achieved under non integration we demonstrate that ex post monopolization is more likely to occur when there is an upstream monopoly than when there is upstream competition our general conclusion is that the simple intuition that the presence of upstream competition can mitigate and reduce the incentives for socially undesirable vertical integration is misplaced and depending upon the strength of downstream competition i e product differentiation the opposite could easily be the case journal of economic literature classification number l42

how strong are weak patents economists usually conceive of patents as property rights that prevent others from practicing the patenting technology unless they first obtain a license from the patent holder even for ironclad patents i e for patents that are certain to be valid the existing literature has shown that the analysis of equilibrium licensing contracts is surprising subtle and complex 1 for example the analysis is quite different depending upon whether one firm s licensing contract is observable to the other firms likewise equilibrium outcomes are quite different if royalties must be linear than in the case where two part tariffs and other non linear royalties are permitted in that literature a downstream firm that refuses to sign a contract with the upstream supplier either exits the industry in the case that the upstream supplier controls an essential input or must rely on more costly inputs in the case of a non essential input in other words the downstream firm s threat point is to use some backstop technology in practice however patents are issued after a brief examination by the patent office to see if they meet the statutory requirements for novelty and non obviousness mounting evidence indicates that many weak patents i e patents unlikely to be found valid if challenged in court are issued by the u s patent and trademark office uspto 2 some observers view this with great alarm arguing that uspto is handing out undeserved monopolies others by contrast have suggested that these weak patents are of little concern because they will have little commercial impact because they will be licensed at commensurately low royalty rates or not enforced at all we study the commercial impact of weak patents more precisely we define a patent s strength as the probability that it will be found valid if challenged in court and we examine the relationship between a patent s strength and the royalties that it can command the distinctive

opportunism in multilateral vertical contracting nondiscrimination exclusivity and uniformity comment an input supplier selling to competing downstream firms would benefit from publicly committing at the outset to all contracts efficient commitment however would require complete contracts the authors study instead bilateral contracting without commitment regarding others terms each firm then fears that the supplier might opportunistically renegotiate another s contract to increase bilateral profit at the firm s expense the authors show that nondiscrimination clauses generally cannot curb such third party opportunism even with symmetric firms to reassure firms crude forms of commitment may be adopted this could explain the pervasiveness of exclusivity arrangements and the striking uniformity and intertemporal rigidity of franchise contracts copyright 1994 by american economic association

price vs quantity competition in vertically related markets generalization abstract this paper generalizes the result of alipranti et al 2014 regarding the wholesale prices i prove that upstream firms always charge the wholesale prices above below their marginal costs in case of bertrand cournot competition downstream alipranti et al 2014 demonstrates this result for the case of linear demand functions and monopolist that sells its product to two retailers i relax the assumption of linear demands allow for arbitrary number of retailers and for the competition upstream

the competition effects of industry wide vertical price fixing in bilateral oligopoly this paper examines the competition and welfare effects of vertical price fixing through industry wide resale price maintenance rpm arrangements such as those benefiting from exemption from a general prohibition against rpm a bilateral oligopoly framework is employed incorporating differentiation between manufacturer products and between retailer services transactions between the stages involve prices being determined through bargaining we do not find rpm to be universally undesirable however where retailer power is strong the social effects of rpm are likely to be adverse since the practice can assist in coordinating final price levels and prevent socially desirable countervailing power arising

decision stages and asymmetries in regular retail price pass through we study the pass through of wholesale price changes onto regular retail prices using an unusually detailed data set obtained from a major retailer we model pass through as a two stage decision process that reflects both whether as well as how much to change the regular retail price we show that pass through is strongly asymmetric with respect to wholesale price increases versus decreases wholesale price increases are passed through to regular retail prices 70 of the time while wholesale price decreases are passed through only 9 of the time pass through is also asymmetric with respect to the magnitude of the wholesale price change with the magnitude affecting the response to wholesale price increases but not decreases finally we show that covariates such as private label versus national brand 99 cent price endings and the time since the last wholesale price change have a much stronger impact on the first stage of the decision process i e whether to change the regular retail price than on th

yesterday s bad times are today s good old times retail price changes are more frequent today than in the 1890s this paper documents differences in the nominal rigidity of retail prices across two 28 month periods 1889 91 and 1997 99 the most striking finding is that prices changed much less frequently in 1889 91 in the late 1800s when price changes did occur they were smaller on average and more narrowly distributed with fewer small or large price changes further price changes were more permanent 100 plus years ago these differences are consistent with a high occurrence of temporary price shocks and a higher cost of changing prices in 1889 91 than in 1997 99

nash in nash bargaining a microfoundation for applied work a nash equilibrium in nash bargains has become the workhorse bargaining model in applied analyses of bilateral oligopoly this paper proposes a non cooperative foundation for nash in nash bargaining that extends the rubinstein 1982 model to multiple upstream and downstream rms assuming there exists gains from trade for each rm pair we prove that there exists an equilibrium with immediate agreement and negotiated prices that correspond to rubinstein prices if and only if the marginal contribution of a set of agreements is weakly greater than the sum of the agreements marginal contributions we provide stronger conditions under which equilibrium prices are unique

magazine prices revisited this paper examines price adjustment behaviour in the magazine industry in a frequently cited study cecchetti 1986 constructs a reduced form s s model for firms cecchetti assumes that a firm s pricing rules are fixed for non overlapping three year intervals and estimates the model using a conditional logit specification from chamberlain 1980 the estimates are inconsistent however due to the duration dependent specification of the model two alternative specifications are used to obtain consistent estimation the consistent estimates continue to provide strong evidence in favour of state dependent pricing models but only weak evidence on the behaviour of price adjustment costs copyright 2006 john wiley sons ltd

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

price points and price rigidity abstract we study the link between price points and price rigidity using two data sets weekly scanner data and internet data we find that 9 is the most frequent ending for the penny dime dollar and ten dollar digits the most common price changes are those that keep the price endings at 9 9 ending prices are less likely to change than non 9 ending prices and the average size of price change is larger for 9 ending than non 9 ending prices we conclude that 9 ending contributes to price rigidity from penny to dollar digits and across a wide range of product categories retail formats and retailers

bilateral control with vertical contracts when a manufacturer contracts secretly with competing retailers he is subject to opportunism and linear or non linear tariffs may not allow the manufacturer to maintain monopoly prices to analyse the effects of rpm o brien shaffer 1992 use a concept of contract equilibrium which concentrates on pairwise deviations thereby questioning the robustness of the analysis this paper emphasises the distinction between the contract equilibrium and standard non cooperative concepts we advocate for some caution in the use of the former concept as if overlooks an inexistence problem we then confirm the intuition that rpm can help solve the manufacturer s commitment problem this confirms that o brien shaffer s insight is robust and validates the courts reluctance against rpm

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

buyer power and intrabrand coordination we analyze the competitive effects of vertical contracts in a contracting situation where rival retailers offer contracts to a manufacturer in contrast to bernheim and whinston 1998 who study the situation in which competing manufacturers offer contracts to a common retailer we find that two part tariffs even if contingent on exclusivity or not do not suffice to implement the monopolyoutcome richer arrangements including e g conditional fixed fees and upfront payments are thus required to internalize all contracting externalities the welfare implications are ambiguous on the one hand richer contracts ensure that no efficient retailer is excluded on the other hand they allow firms to maintain monopoly prices despite intrabrand competition simulations suggest that the latter effect may be more significant

price vs quantity competition in a vertically related market this paper demonstrates that the standard conclusions regarding the comparison of cournot and bertrand competition are reversed in a vertically related market with upstream monopoly and trading via two part tariffs in such a market downstream cournot competition yields higher output lower wholesale prices lower final prices higher consumers surplus and higher total welfare than bertrand competition

inflation and costly price adjustment a study of canadian newspaper prices the paper studies the effect of inflation on price behaviour using price data from canadian daily newspapers we test the sheshinski and weiss 1977 monopoly price adjustment model on a sample of monopolistic as well as oligopolistic newspapers in contrast to earlier studies that used data from oligopolistic or monopolistically competitive markets the results depend crucially on the assumptions about how often the firm collects information and revises its optimal pricing policy with infrequent policy revisions the results for monopoly newspapers support the model the results for oligopoly newspapers are similar

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