nep-mic New Economics Papers
on Microeconomics
Issue of 2005‒11‒12
37 papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior
  1. A new way to measure competition By Boone,J.
  2. Innovation races: An experimental study on strategic research activities By Uwe Cantner; Andreas Nicklisch; Torsten Weiland
  3. Price Responses to Market Entry With and Without Endogenous Product Choice By Helge Sanner
  4. Cournot competition in spatial markets. By Andrea Cosnita
  5. Media Concentration and Consumer Product Prices By Anthony J. Dukes
  6. The pricing behaviour of firms in the euro area - new survey evidence By Silvia Fabiani; Claudia Kwapil; Martine Druant; Ignacio Hernando; Bettina Landau; Claire Loupias; Fernando Martins; Thomas Y. Mathä; Roberto Sabbatini; Harald Stahl; Ad C. J. Stokman
  7. Modeling the Firm as an Artificial Neural Network By Jason Barr; Francesco Saraceno
  8. Is Tax Shifting Asymmetric? Evidence from French VAT reforms, 1995-2000. By Clément Carbonnier
  9. The price setting behaviour of spanish firms - evidence from survey data By Luis J. Álvarez; Ignacio Hernando
  10. Structural remedies in merger regulation in a Cournot framework By Medvedev,A.
  11. Strategic trading of forward contracts in oligopolistic industries with non-storable commodities By Calcagno,R.; Sadrieh,A.
  12. Non-existence of equilibria with free elimination. By Hans-Jürgen Salchow
  13. Optimum Taxation of Life Annuities By Johann K. Brunner; Susanne Pech
  14. Micro Evidence on the Adjustment of Sticky-Price Goods: It's How Often, not How Much By Lorenz Goette; Rudolf Minsch; Jean-Robert Tyran
  15. Are the Anti-globalists right? Gains-from-trade without a Walrasian auctioneer. By Hector Calvo Pardo
  16. Optimal privatization using qualifying auctions By Boone,J.; Goeree,J.K.
  17. Modeling Alternative Motives for Dieting By Robert S. Goldfarb; Thomas C. Leonard; Steven M. Suranovic
  18. Balance of power By Boone,J.
  19. On the economic value of repeated interactions under adverse selection By Ottorino Chillemi; Benedetto Gui; Lorenzo Rocco
  20. Learning, Product Innovation and Firm Heterogeneity in Tanzania By Goedhuys, Micheline
  21. Regulatory co-opetition : transcending the regulatory competition debate By Geradin,D.; McCahery,J.A.
  22. Market power, innovative activity and exchange rate pass-through in the euro area By Sophocles N. Brissimis; Theodora S. Kosma
  23. An Economic Model of Youth Smoking: Tax and Welfare Effects By Steven M. Suranovic
  24. Unbundling the local loop : one-way access and imperfect competition By Bijl,P.W.J. de; Peitz,M.
  25. Heterogeneity in consumer price stickiness - a microeconometric investigation By Denis Fougère; Hervé Le Bihan; Patrick Sevestre
  26. Network effects and regulatory competition By Vermeulen,E.P.M.
  27. Local Competition and Impact of Entry by a Dominant Retailer By Ting Zhu; Vishal Singh; Anthony J. Dukes
  28. Screening markets for cartel detection - collusive marker in the CFD cartel-audit By Christian Lorenz
  29. Voting with Preferences over Margins of Victory By Humberto Llavador
  30. Dominance and monopolization By Canoy,M.; Rey,P.; Damme,E. van
  31. Competitive equilibrium with asymmetric information : an existence theorem for numeraire assets. By lionel de Boisdeffre
  32. The convergence of price-cost margins. By Hervé Boulhol
  33. Elasticities of Demand for Consumer Credit By Dean Karlan; Jonathan Zinman
  34. MORAL HAZARD AND THE DEMAND FOR HEALTH SERVICES: A MATCHING ESTIMATOR APPROACH By Pedro Pita Barros; Matilde P. Machado; Anna Sanz de Galdeano
  35. Local loop unbundling in Europe: : experience, prospects and policy challenges By Bijl,P.W.J. de; Peitz,M.
  36. Effects of leniency programs on cartel stability By Motchenkova,E.
  37. Interconnected networks By Bijl,P.W.J. de; Brunekreeft,G.; Damme,E.E.C. van
  1. By: Boone,J. (TILEC (Tilburg Law and Economics Center))
    Keywords: competition;measurement;profit;firms
    JEL: D43 L13
    Date: 2004
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200404&r=mic
  2. By: Uwe Cantner (University of Jena, Faculty of Economics); Andreas Nicklisch (Max-Planck-Institute for Research into Collective Goods); Torsten Weiland (Max-Planck-Institute for Economics, Strategic Interactions Group)
    Abstract: In an experimental setting, firms in a duopoly market engage in a patent tournament and compete for profit-enhancing product advancements. The firms generate income by matching exogenously defined demand preferences with an appropriately composed product portfolio of their own. Demand preferences are initially unknown and first need to be revealed by an investigation of the possible product variations. The better firms approximate demand preferences, the higher their profits. In the ensuing innovation race, firms interact through information spillovers resulting from the imperfect appropriability of research successes. In the random period of the experiment, the continuity of the search process is disturbed by an exogenous shock that affects both the supply and demand side and again spurs research competition. Firms may henceforth explore an enlarged product space in attempting to match the equally modified demand preferences. In our analysis, we explore the behavioural regularities of agents who are engaged in innovation activities. As a key element we test to what extend relative economic performance exercises a stimulating effect on the implementation of innovation and imitation strategies.
    Keywords: Innovation, Imitation, Patent Tournament, Trial and Error Process
    JEL: D81 O31
    Date: 2005–11–07
    URL: http://d.repec.org/n?u=RePEc:jen:jenasw:2005-17&r=mic
  3. By: Helge Sanner
    Abstract: Textbook wisdom says that competition yields lower prices and higher consumer surplus than monopoly. We show in two versions of a simple location-product differentiation model with and without endogenous choice of products that these two results have to be qualified. In both models, more than half of the reasonable parameter values lead to higher prices with duopoly than with monopoly. If the product characteristics are exogenous to the firms, consumers may even be be better off with monopoly in average.
    Keywords: Product differentiation; Hotelling; Price and Welfare Effects of Market Entry
    JEL: L12 L13 L41 D43
    Date: 2005–11
    URL: http://d.repec.org/n?u=RePEc:pot:vwldis:81&r=mic
  4. By: Andrea Cosnita (EUREQua)
    Abstract: We study location equilibria for Cournot oligopolies selling complementary goods. For a single-store triopoly, we prove that the circular market also yields partial diamentrical dispersion besides total agglomeration. We turn to multi-plant duopolies and in contrast to other contributions on the topic, we allow firms to sell more than one product. We confirm the intuition that total agglomeration of outlets is always an equilibrium, whatever the market shape. However, the circular case also exhibits intra-firm agglomeration and inter-firm equal distance dispersion. This is a pattern never before obtained, entirely due to the assumption of intra-firm product complementarity.
    Keywords: Complementary products, multi-store competition, spatial Cournot model.
    JEL: D43 L13 R32
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:mse:wpsorb:v05061&r=mic
  5. By: Anthony J. Dukes (School of Economics and Management, University of Aarhus)
    Abstract: We examine the interaction of commercial media and retail producers of well-known consumer products when advertising is used to differentiate brands. In particular, we address how competition in the media market affects choices of advertising and program quality. The results suggest counter-intuitively that advertisers may actually prefer media markets with less competition for audiences. Product differentiation through advertising is more effective when media markets are less competitive, leading to higher prices for advertised products. As a result, media concentration may lead to higher profits for advertising firms if the additional revenue exceeds the higher advertising costs associated with media concentration.
    JEL: L13 L82 M37
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:kud:kuieci:2005-06&r=mic
  6. By: Silvia Fabiani (Corresponding author: Banca d'Italia, Rome, Italy); Claudia Kwapil (Corresponding author: Oesterreichische Nationalbank, Vienna, Austria); Martine Druant (Banque Nationale de Belgique, Brussels, Belgium); Ignacio Hernando (Banco de España, Madrid, Spain); Bettina Landau (European Central Bank, Kaiserstrasse 29, Frankfurt am Main, Germany.); Claire Loupias (Banque de France, Paris, France); Fernando Martins (Banco de Portugal, Lisbon, Portugal); Thomas Y. Mathä (Banque centrale du Luxembourg); Roberto Sabbatini (Banca d’Italia, Rome, Italy); Harald Stahl (Deutsche Bundesbank, Wilhelm-Epstein-Strasse 14, Frankfurt am Main, Germany.); Ad C. J. Stokman (De Nederlandsche Bank, Amsterdam)
    Abstract: This study investigates the pricing behaviour of firms in the euro area on the basis of surveys conducted by nine Eurosystem national central banks, covering more than 11,000 firms. The results, robust across countries, show that firms operate in monopolistically competitive markets, where prices are mostly set following markup rules and where price discrimination is common. Around one-third of firms follow mainly time-dependent pricing rules while twothirds allow for elements of state-dependence. The majority of firms take into account past and expected economic developments in their pricing decisions. Price stickiness is mainly driven by customer relationships – explicit and implicit contracts – and coordination failure. Firms adjust prices asymmetrically in response to shocks: while cost shocks have a greater impact when prices have to be raised than when they have to be reduced, reductions in demand are more likely to induce a price change than increases in demand.
    Keywords: Price setting; nominal rigidity; real rigidity; inflation persistence; survey data.
    JEL: E30 D40
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050535&r=mic
  7. By: Jason Barr; Francesco Saraceno
    Abstract: The purpose of this chapter is two-fold: (1) to make the case that a standard backward propagation artificial neural network (ANN) can be used as a general model of the information processing activities of the firm, and (2) to present a synthesis of Barr and Saraceno (BS) (2002, 2004, 2005), who offer various models of the firm as an artificial neural network.
    Keywords: neural networks, information processing, firm learning, agent-based
    JEL: C63 D21 D83 L13
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:run:wpaper:2005-011&r=mic
  8. By: Clément Carbonnier
    Abstract: This paper presents evidence from three French VAT reforms showing that tax shifting on prices operates differently upwards and downwards. This may appear as a paradox when reading usual studies on price shifting. This paper puts forward two different asymmetric effects. The first one is linked to asymmetries in firms' supply curves, which imply that price decreases are smaller than price increases. It occurs because firms decrease their production more easily than they increase it. The second asymmetric effect is linked to asymmetries in customers' demand curves, which react with higher intensity to big price changes than to tenuous ones. Therefore, in markets with monopolistic firms or with collusion - markets that better consider the variations of the demand because of the price making power of firms - price increases are relatively weak in order to prevent the fall of the demand, and price decreases are relatively strong in order to take profit of the takeoff of the demand. This paper shows that this second effect can counteract the first effect in markets with high fixed costs.
    Date: 2005
    URL: http://d.repec.org/n?u=RePEc:pse:psecon:2005-34&r=mic
  9. By: Luis J. Álvarez (Banco de España, Alcalá 48, 28014 Madrid, Spain); Ignacio Hernando (Banco de España, Alcalá 48, 28014 Madrid, Spain)
    Abstract: This paper reports the results of a survey carried out by the Banco de España on a sample of around 2000 Spanish firms to deepen the understanding of firms’ price setting behaviour. The main findings may be summarised as follows. Most Spanish firms are price setters that use predominantly state-dependent rules or a combination of time- and statedependent rules when reviewing their prices. Changes in costs are the main factor underlying price increases, whereas changes in market conditions (demand and competitors’ prices) are the main driving forces of price decreases. The degree of price flexibility is directly related to the share of energy inputs over total costs and to the intensity of competition, whereas it is inversely linked to the labour share. The three theories of price stickiness that receive the highest empirical support are implicit contracts, coordination failure and explicit contracts.
    Keywords: Price setting; price stickiness; survey data.
    JEL: D40 E31
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050538&r=mic
  10. By: Medvedev,A. (TILEC (Tilburg Law and Economics Center))
    JEL: D43 K21 L51
    Date: 2004
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200406&r=mic
  11. By: Calcagno,R.; Sadrieh,A. (TILEC (Tilburg Law and Economics Center))
    JEL: D43 L13
    Date: 2004
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200405&r=mic
  12. By: Hans-Jürgen Salchow
    Abstract: This work is concerned in the existence problem of equilibria for economies with increasing returns to scale. The consequences of relaxing the free disposal assumption are investigated. It is sown that the free disposal assumption can not be dropped, not even relaxed to the assumption of free elimination, without risking that equilibria may fail to exist. This may give new insight to the work of Giraud (2000) and Jouini (1992), because they proved the existence of equilibria for economies without free disposal assuming the production sets to verify (even weaker forms of) free elimination.
    Keywords: Free disposal, increasing returns to scale, marginal pricing, non-convex production.
    JEL: C50 D62
    Date: 2005–03
    URL: http://d.repec.org/n?u=RePEc:mse:wpsorb:b05057&r=mic
  13. By: Johann K. Brunner (Department of Economics, Johannes Kepler University Linz, Austria); Susanne Pech (Department of Economics, Johannes Kepler University Linz, Austria)
    Abstract: The market for private life annuities is characterised by adverse selection, that is, contracts offer lower than fair payoffs to individuals with low life expectancy. Moreover, life expectancy and income have been found to be positively correlated. The paper shows that a linear tax on annuity payoffs, which raises more revenues from long-living individuals than from short-living, represents an appropriate instrument for redistribution, in addition to an optimally designed labour income tax. Further, we find that a nonlinear tax on annuity payoffs can be directly employed to correct the distortion of the rate of return caused by asymmetric information. These results are contrasted with theoretical findings concerning the role of a tax on capital income.
    Keywords: Optimum taxation; life annuities; adverse selection
    JEL: H2 G2
    Date: 2005–11
    URL: http://d.repec.org/n?u=RePEc:jku:econwp:2005_06&r=mic
  14. By: Lorenz Goette (University of Zurich); Rudolf Minsch (University of Applied Sciences, Chur, Switzerland); Jean-Robert Tyran (Department of Economics, University of Copenhagen)
    Abstract: We use a unique panel data set to analyze price setting in restaurants in Switzerland 1977-93, for items known to have sticky prices. The macroeconomic environment during this time period allows us to examine how firms adjust prices at low (0%) and fairly high (7%) inflation. Our results indicate that firms strongly react to inflation in the timing of their price adjustment: hazard of price changes is increasing with time and becomes steeper at higher inflation rates. However, we find little evidence that the amount by which they change the price responds to the inflation rate.
    Keywords: sticky prices; inflation; nominal inertia
    JEL: E30 E31 D21 B49
    Date: 2005–11
    URL: http://d.repec.org/n?u=RePEc:kud:kuiedp:0520&r=mic
  15. By: Hector Calvo Pardo
    Abstract: We examine whether the "fear" of globalisation can be rationalised by economic theory. To do so, we depart from the standard AD/AS (partial) equilibrium model where the coordinational role of the Auctioneer is substituted by an implementation device based on learning (Guesnerie, 1992). By endowing producers with a learning ability to forecast market prices, individual profit-maximizing production decisions become interdependent in a strategic sense (strategic substitutes). Performing basic comparative statics exercises, we show that "competitiveness" matters in a precise sense: as foreign producers gain access to the home market, home producers' ability to forecast market prices is undermined, so being their ability to forecast the profit consequences of their production decisions. When performing a standard open economy exercise in such a framework, we show that the existence of standard efficiency gains - due to the increase in competition (or spatial price stabilization) - is traded-off against coordination upon the welfare enhancing free-trade equilibrium (stabilizing price expectations). Therefore, we identify a new rationale for an exogenous price intervention in open economy targeting coordination, to allow trading countries to fully reap the benefits from trade. We illustrate this point showing that classical measures evaluating ex-ante the desirability of economic integration (net welfare gains) do not always advice integration between two expectationally stable economies.
    Date: 2005
    URL: http://d.repec.org/n?u=RePEc:pse:psecon:2005-35&r=mic
  16. By: Boone,J.; Goeree,J.K. (TILEC (Tilburg Law and Economics Center))
    Date: 2005
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200521&r=mic
  17. By: Robert S. Goldfarb (The George Washington University); Thomas C. Leonard (Princeton University); Steven M. Suranovic (The George Washington University)
    JEL: I
    Date: 2005–11–08
    URL: http://d.repec.org/n?u=RePEc:wpa:wuwphe:0511001&r=mic
  18. By: Boone,J. (TILEC (Tilburg Law and Economics Center))
    Date: 2004
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200421&r=mic
  19. By: Ottorino Chillemi (University of Padua); Benedetto Gui (University of Padua); Lorenzo Rocco (University of Padua)
    Abstract: The paper studies, in a repeated interaction setting, how the presence of cooperative agents in a heterogeneous community organized in groups, affects group efficiency and stability. The paper extends the literature by assuming that each type can profitably mimic other types. It is shown that such enlargement of profitable options prevents group stabilization in the single group case. Stabilization can be obtained with many groups, but its driver is not the efficiency gain due to the presence of cooperative individuals. Instead stabilization is the result of free riding opportunities.
    JEL: D64 D71 D82
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:pad:wpaper:0007&r=mic
  20. By: Goedhuys, Micheline (United Nations University, Institute for New Technologies)
    Abstract: Using a unique firm level data set on learning and product innovation in Tanzanian manufacturing and commercial farming, this paper sheds light on the various sources of firm learning, investment and collaboration and their relative importance for product innovation. The results indicate that larger and foreign owned firms invest significantly more in human and physical capital than do local micro, small and medium sized firms, and they are better connected to the internet. Their ways of upgrading technology also reveals a better financial endowment. Small and medium sized firms on the other hand report to collaborate more intensively with other local firms on product development, marketing and on the input market and upgrade technology through in-house activities, imitation and cooperation with suppliers and universities. By doing so, they are able to offset the scale disadvantages they face in competing for the market information and inputs – new machinery and specialised labour - necessary for product innovation in imperfect markets.
    Keywords: learning, innovation, technological change, competitiveness, multinational corporations, MNEs, small and medium enterprises, SMEs, investment, Tanzania
    Date: 2005
    URL: http://d.repec.org/n?u=RePEc:dgr:unuint:200507&r=mic
  21. By: Geradin,D.; McCahery,J.A. (TILEC (Tilburg Law and Economics Center))
    Date: 2005
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200520&r=mic
  22. By: Sophocles N. Brissimis (Bank of Greece and University of Piraeus. Address: 21 E.Venizelos Ave., 10250 Athens, Greece.); Theodora S. Kosma (Corresponding author: Athens University of Economics and Business (AUEB), 76 Patission Street, 10434 Athens, Greece.)
    Abstract: This paper examines exchange rate pass-through in the euro area by accounting for the impact of exchange rate changes on exporting firms’ market power, cost structure and competitiveness. An international oligopoly model where exporting firms simultaneously decide on their pricing and innovation strategies is used as the basis for the econometric analysis. The estimations are carried out on data for manufacturing imports of three large euro area countries (Germany, France, Netherlands) from three major non-euro area import suppliers (US, Japan, UK). The results show that exporting firms’ price and innovation decisions in each source country are jointly determined and that total pass-through to euro area import prices is low. There are also indications that other factors, such as interactions with domestic producers, may be important for the determination of pass-through. Finally, euro area import prices are found to be sticky in local currency in the short run.
    Keywords: Exchange rate pass-through; market power; innovative activity; multivariate cointegration; euro exchange rate.
    JEL: C32 F39 L13 O31
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050531&r=mic
  23. By: Steven M. Suranovic (The George Washington University)
    Abstract: This paper presents a model of smoking choice in which rationality is bounded by limitations in intertemporal computational abilities. The model is applied to the youth decision to initiate smoking. Lifetime smoking paths of representative smokers indicate that youths may experience a reduction in lifetime utility and come to regret their decision to smoke. It is suggested that public policy interventions that raise the near term cost of smoking will be more effective in reducing lifetime smoking than informational campaigns that emphasize future health costs. However, youth taxes would have to be quite high to substantially reduce smoking rates among youths who have already begun to smoke. Also, low youth taxes would not prevent future smoking as an adult, although they would reduce smoking rates and lead to earlier quitting.
    Keywords: Cigarettes, smoking, addiction, Behavioral economics
    JEL: I12 D11 D60 D91
    Date: 2005–11–08
    URL: http://d.repec.org/n?u=RePEc:wpa:wuwphe:0511003&r=mic
  24. By: Bijl,P.W.J. de; Peitz,M. (TILEC (Tilburg Law and Economics Center))
    Date: 2004
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200425&r=mic
  25. By: Denis Fougère (CNRS, CREST-INSEE (Paris), CEPR (London) and IZA (Bonn)); Hervé Le Bihan (Banque de France (Paris)); Patrick Sevestre (Université Paris XII-Val de Marne and Banque de France (Paris))
    Abstract: This paper examines heterogeneity in price stickiness using a large, original, set of individual price data collected at the retail level for the computation of the French CPI. To that end, we estimate, at a very high level of disaggregation, competing-risks duration models that distinguish between price increases, price decreases and product replacements. The main findings are the following: i ) cross-product and cross-outlet-type heterogeneity in both the shape of the hazard function and the impact of covariates is pervasive ii) at the product-outlet type level, the baseline hazard function of a price spell is non-decreasing iii ) there is strong evidence of state dependence, especially for price increases.
    Keywords: Sticky prices; heterogeneity; hazard function; duration models.
    JEL: E31 C41
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050536&r=mic
  26. By: Vermeulen,E.P.M. (TILEC (Tilburg Law and Economics Center))
    Date: 2005
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200528&r=mic
  27. By: Ting Zhu (Carnegie Mellon University); Vishal Singh (Carnegie Mellon University); Anthony J. Dukes (School of Economics and Management, University of Aarhus)
    Abstract: This paper analyzes the competition between two spatially differentiated multi-product retailers who encounter entry from a dominant discount retailer. Our primary objective is to determine how entry affects the pricing and relative profits of the incumbent stores and the role played by the location of the entrant. The new entrant has partial overlap in product assortment with the incumbents and is assumed to have lower procurement costs for the common goods. Consumers are heterogeneous in their location, economic status (shopping costs and valuations), as well as purchase basket or the types of products demanded. Results show that in the post entry equilibrium, the prices for the products not offered by the discounter are higher than the pre entry prices. More interestingly, contrary to the conventional wisdom we find that the store that is closer to the new entrant is better off compared to the incumbent located further away. The intuition for these results is that the discounter with its low price draws away the poor consumers – the price sensitive segment – out of the market for the items it carries. This in turn softens price competition between the incumbents for these items. Furthermore, the new entrant’s unique product offering attracts more consumers to visit the location it occupies, which introduces positive demand externalities to the neighboring retailer, leading to an increase in sales for the non-competing products. We provide empirical evidence for our results and discuss implications for retailers facing competition from large discount stores.
    Keywords: entry; retail competition; agglomeration
    JEL: L13 L81 M31
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:kud:kuieci:2005-05&r=mic
  28. By: Christian Lorenz (Institute of Public Economics, Muenster University)
    Abstract: Coordination Failure Diagnostics (CFD) is a model that analyses real market processes with the help of time pattern analysis and investigates whether they operate efficiently (See www.wiwi.uni-muenster.de/cfd). The CFD cartel-audit should enable the detection of cartels via characteristic market process patterns. This is based on the assumption that existing cartels cause failures in the observed process patterns. The CFD cartel-audit attempts to draw conclusions from these process patterns in order to find hidden cartels and to engage antitrust agencies into additional more detailed audits.
    Keywords: cartel, cement, collusive marker, market screening, price fixing
    JEL: L13 L41 L61 D43
    Date: 2005–11–09
    URL: http://d.repec.org/n?u=RePEc:wpa:wuwpio:0511003&r=mic
  29. By: Humberto Llavador
    Abstract: This paper analyzes a two-alternative voting model with the distinctive feature that voters have preferences over the support that each alternative receives, and not only over the identity of the winner. The main result of the paper is the existence of a unique equilibrium outcome with a very intuitive characterization: in equilibrium voters who prefer a higher support for one of the alternatives vote for such alternative. Its computation is equally simple: the equilibrium outcome is the unique fixed point of the connected survival function associated to the distribution of the electorate. This characterization works for electorates with a finite number of citizens as well as with a continuum of agents, and for scenarios with and without abstention. Finally, strate- gic voting (voting for the least preferred alternative) is common for a fraction of the electorate who favor electorally “balanced” results.
    Keywords: Voting, plurality, abstention, strategic voting
    JEL: D72
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:upf:upfgen:900&r=mic
  30. By: Canoy,M.; Rey,P.; Damme,E. van (TILEC (Tilburg Law and Economics Center))
    Date: 2004
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200422&r=mic
  31. By: lionel de Boisdeffre (CERMSEM)
    Abstract: In a general equilibrium model of incomplete markets with nominal assets and adverse selection, Cornet-De Boisdeffre (3) introduced refined concepts of "no-arbitrage" prices and equilibria, which extended to the asymmetric information. We now present the model with numeraire assets and study its existence properties. We show that equilibrium exists, as long as financial markets preclude arbitrage, under similar standard conditions, whether agents have symmetric or asymmetric information. This result departs from the rational expectations' outcome and extends to the asymmetric setting the classical existence property of symmetric information models with numeraire assets.
    Keywords: General equilibrium, asymmetric information, arbitrage, inference, existence of equilibrium.
    JEL: D52
    Date: 2005–03
    URL: http://d.repec.org/n?u=RePEc:mse:wpsorb:b05067&r=mic
  32. By: Hervé Boulhol (IXIS-CIB et TEAM)
    Abstract: This paper gives estimates of sectoral markup trends in thirteen OECD countries over the last three decades. It concludes with a slight, albeit heterogeneous, increase in price-cost margins (PCMs) overall, contrary to the generally expected effect of increased competition. More strikingly, it estabishes a clear pattern of PCM convergence both across countries and sectors. This convergence means that high margins have shrunk and low margins grown. These movements seem to be linked to the decline in the labour share. They point to a need to search for factors counterbalancing the pro-competitive effect on markups.
    Keywords: Markup, price-cost margin, pro-competitive effect, wage bargaining, labour share.
    JEL: L11 L13 L60 J40 F02
    Date: 2005–09
    URL: http://d.repec.org/n?u=RePEc:mse:wpsorb:bla05056&r=mic
  33. By: Dean Karlan (Economic Growth Center, Yale University); Jonathan Zinman (Dartmouth College)
    Abstract: The price elasticity of demand for credit has major implications for macroeconomics, finance, and development. We present estimates of this parameter derived from a randomized trial. The experiment was implemented by a consumer microfinance lender in South Africa and identifies demand curves that, while downward-sloping with respect to price, are flatter than recent estimates in both developing and developed countries throughout most of a wide price range. However, demand becomes highly price sensitive at higher-than-normal rates. We discuss several interpretations of this kink and present some related evidence. We also find that loan size is far more responsive to changes in loan maturity than to changes in interest rate. This pattern is more pronounced among lower income individuals, a comparative static that has been observed in the United States as well and is consistent with liquidity constraints that decrease with income.
    Keywords: Credit Markets, Microfinance, Demand Elasticity, Development Finance, Maturity Elasticity, Consumer Credit
    JEL: D1 D9 E2 G2 O1
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:egc:wpaper:926&r=mic
  34. By: Pedro Pita Barros; Matilde P. Machado; Anna Sanz de Galdeano
    Abstract: In this paper we estimate the impact of health insurance coverage beyond National Health Insurance on the demand for several health services. Traditionally, the literature has tried to deal with the endogeneity of the private (extra) insurance decision by finding instrumental variables. It is hard to think, however, of any variable that a priori would be a good instrument and, therefore, we take a different approach. We concentrate on the most common health insurance plan in the Portuguese Health Survey, (ADSE), which is given to all civil servants and their dependants. We argue that this insurance is exogenous for most people i.e. not correlated with their health status. Under this identifying assumption we estimate the impact of having ADSE coverage on three different health services using a matching estimator technique. The measures of demand for health services are number of visits, number of blood and urine tests, and the probability of visiting a dentist. Preliminary results show large effects of ADSE for number of visits and tests among the young (18 to 30 years old) but only for tests are these effects statistically significantly different from zero. The magnitude of the effects represent 21.8 and 30 percent of the average number of visits and tests for the young. On the contrary we find no evidence of moral hazard on the probability of visiting a dentist. Finally, we argue that there is evidence of a positive cumulative effect of ADSE over the years.
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:cte:werepe:we055928&r=mic
  35. By: Bijl,P.W.J. de; Peitz,M. (TILEC (Tilburg Law and Economics Center))
    Date: 2005
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200508&r=mic
  36. By: Motchenkova,E. (TILEC (Tilburg Law and Economics Center))
    Date: 2004
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200420&r=mic
  37. By: Bijl,P.W.J. de; Brunekreeft,G.; Damme,E.E.C. van (TILEC (Tilburg Law and Economics Center))
    Date: 2005
    URL: http://d.repec.org/n?u=RePEc:dgr:kubtil:200507&r=mic
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