Residual value forecasting using asymmetric cost functions

Leasing is a popular channel for marketing new cars. However, the pricing of leases is complicated because the leasing rate must embody an expectation of the car’s residual value after contract expiration. This paper develops resale price forecasting models in order to aid pricing decisions. One feature of the leasing business is that different forecast errors entail different costs. The primary objective of this paper is to identify effective ways of addressing cost asymmetry. Specifically, this paper contributes to the literature by (i) consolidating prior work in forecasting on asymmetric functions of the cost of errors; (ii) systematically evaluating previous approaches and comparing them to a new approach; and (iii) demonstrating that forecasting using asymmetric cost of error functions improves the quality of decision support in car leasing. For example, if the costs of overestimating resale prices are twice those of underestimating them, incorporating cost asymmetry into forecast model development reduces costs by about 8%.     

SEMI‐NONPARAMETRIC ESTIMATION OF CONSUMER SEARCH COSTS

This paper studies the estimation of the distribution of non‐sequential search costs. We show that the search cost distribution is identified by combining data from multiple markets with common search technology but varying consumer valuations, firms' costs, and numbers of competitors. To exploit such data optimally, we provide a new method based on semi‐nonparametric estimation. We apply our method to a dataset of online prices for memory chips and find that the search cost density is essentially bimodal, such that a large fraction of consumers searches very little, whereas a smaller fraction searches a relatively large number of stores. Copyright © 2012 John Wiley & Sons, Ltd.     

Resale price maintenance in a model of consumer search

A retail search model of Salop and Stiglitz (1977) is adapted to analyze manufacturer incentives for resale price maintenance. For some retailer cost functions and distributions of consumer search costs, imposition of a minimum price for retailers causes a price distribution to collapse to an intermediate price. Manufacturers may benefit from price floors when sales to high-search-cost consumers that have obtained lower prices increase sufficiently so as to offset decreased sales to other consumers facing higher prices. In contrast to previous work, no free-riding problem with respect to dealer services is necessary for manufacturers to prefer banning discounting of their products.     

AN ANALYSIS OF PROJECTED URBAN INFRASTRUCTURE INVESTMENT COSTS IN INDIA*

There is considerable apprehension concerning the cost of rapid urbanization in developing countries. However, actual costs of urbanization have seldom been computed. This paper provides a relatively simple procedure for making such cost estimates from information which is readily available from executing agencies involved in urban infrastructure projects in India. It is found that infrastructure costs are not systematically different for large and small cities. Differences in costs are more related to differences in physical factors such as geography, terrain, and climate, and especially to the different levels of service standards used. It is also found that the costs of replacement investment assume increasing significance with growing urbanization. Planning activities must therefore give greater emphasis to replacement investments than is generally the case. The main conclusion is that the cost of providing basic urban infrastructure in India can be kept within manageable limits in the foreseeable future provided that modest standards are maintained. The appropriate level of urban infrastructure investment should be roughly double the current level in India.     

Consumer Search with Limited Product Evaluation

Consumers need not evaluate all available product information before making a purchase. This may arise because shopping environments prevent a full evaluation (e.g., online). We develop a model of simultaneous search in which consumers have limited ability in product evaluation in order to study the impact of search cost on prices, consumer surplus, and social welfare. If consumers are endowed with the ability to choose how much information to acquire from a searched product, they may choose limited product evaluation. We find that consumers may evaluate more firms, enjoy lower prices, and higher surplus despite this limited ability. This implies that prices can decrease and consumer surplus can increase in search costs. We then extend our setting to the case of multiproduct firms and find similar effects due to changes in within‐firm search costs.     

Evolving Electric Utility Regulatory Policy

A bstract . Current electric utility pricing methods understate the marginal social casts of electricity. Electricity prices are set to cover the utility's average cost rather than the higher marginal social cost. This mispricing hides from consumers the true cost their consumption imposes on society and, thereby, encourages them to ignore efficient conservation opportunities. Additionally, the conservation market suffers from a number of imperfections such as barriers to the acquisition of information, high upfront capital costs and the lack of conservation equipment availability. The electricity and conservation multimarket equilibrium is not achieved. The result is that society overconsumes (excess demand) electricity, overinvests in electric generating plants and underinvests (excess supply) in conservation resources. The large, yet uncertain, level of foregone conservation investment offers new opportunities for regulators and electric utility managers to improve economic efficiency with regulatory and planning policies that appropriately encourage the cost effective use of conservation resources. In the absence of the most efficient policy, marginal social cost pricing, integrated resource planning (IRP) is being adopted as a potential second-best regulatory policy and utility resource planning framework to improve energy efficiency. IRP uses mathematical optimization methods to search among many alternate resource portfolios of electricity creating and saving technologies. These methods identify the mix that best meets society's needs with the least social cost , where the social external costs and benefits of generating plant and conservation, respectively, are considered. Such a goal requires the choice of a resource portfolio that optimizes a complex objective function. As a result, the solution offers a resource action plan for electric utilities that may be Pareto-improving.     

购房者认知价值对“小产权房”购买行为的影响——以武汉市为例

研究目的:揭示购房者认知价值对小产权房购买行为的影响,测度购房者认知价值各类因子对小产权房购买行为的影响方向和程度。研究方法:文献资料法、问卷调查法、因子分析法、结构方程模型法。研究结论:1.小产权房购房者认知价值因子可分为功能服务、购买成本、持有风险、心理诉求。2.功能服务、购买成本、心理诉求对小产权房购买行为动机层面有正向影响,其中功能服务的影响程度最大;购买成本、功能服务对小产权房购买行为决策层面有正向影响,持有风险对小产权房购买行为决策层面有负向影响,其中购买成本的影响程度最大。     

An economic efficiency analysis of deconcentrating poverty populations

This paper presents a comparative static analysis using a conceptual model of the social benefits and costs associated with alternative spatial distributions of the poor. This analysis demonstrates that the necessary and sufficient conditions for justifying deconcentration of the poor on the grounds of increasing net social benefits are much more stringent than is commonly believed, fundamentally involving particular sorts of non-linear relationships between neighborhood poverty rates and the propensity of neighboring individuals to engage in problem behaviors and to earn less. The paper then conducts a meta-analysis of the limited empirical evidence available. The weight of the evidence implies that net social benefits would be improved if neighborhoods with greater than about 15% poverty rates were replaced with (an appropriately larger number) of neighborhoods having less than 15% poverty rates. However, net social benefits would be smaller if neighborhoods with greater than about 40% poverty rates were replaced with (an appropriately larger number) of neighborhoods having between about 15–40% poverty rates.     

WHY STUDENTS SHOULD PAY THE FULL COSTS OF THEIR EDUCATION

The community as a whole, including students, would be best served by a system under which those who benefit from higher education pay the full costs involved. An optimal student population would emerge (much lower than at present), the tax burden would be reduced and universities would become solvent and independent. Moreover, 'bizarre and outlandish' courses would dwindle.     

浅析ASP在中小物流企业信息化建设中的应用

随着中国加入WTO以及买方市场的形成．国内众多的中小物流企业将面临前所未有、激烈的市场竞争．如何通过提升物流管理水平、加强信息化建设以保障其发展将是所有中小企业经营者所面临的一个课题。本文分析了ASP如何在中小物流企业信息化建设中的应用．起到满足客户需求、提升服务水平和效率、降低成本的作用。     

WORKERS' COMPENSATION COSTS AND REGIONAL GROWTH DYNAMICS*

This paper attempts to gauge the effect of workplace regulation, against the background of other influences, on the increasing or decreasing competitive advantage of particular regions relative to the nation. We employ two measures of regional growth. The first is the differential rate of investment growth across states between 1978 and 1984. The results for output growth show that states both in the South and outside the South stand to lose their competitive edge in manufacturing activity from rising unit labor cost and energy cost. Rising taxes hurt industrial activity in the North but are not critical in the South. Agglomeration economies that benefit the North, apparently have no detrimental effect in the South. Rising workers' compensation cost is significant in the decline in southern competitiveness; it is not in the North. Both regions enhance their competitive position when local markets grow. For regional manufacturing investment, we find that unit labor cost and energy cost have no significant effect on the competitive position of states in the South. However, taxes and workers' compensation costs hurt investment opportunities in South.     

Advertising as Information: Matching Products to Buyers

We consider communication of quality via cheap talk and dissipative advertising expenditures, when consumers have heterogeneous tastes for quality, and price information must be acquired through costly search. For search pods, cheap talk communicates quality when fixed costs are roughly constant across quality levels, while if fixed costs vary greatly with quality, then firms having the higher fixed-cost quality level use dissipative advertising. For experience goods, quality can be communicated by cheap talk in a range where low-quality firms have greater fixed costs, and low-quality firms use dissipative advertising if their fixed costs are greater still.     

TAXI DEREGULATION AND TRANSACTION COSTS

Deregulation of taxi markets has the potential to deliver significant benefits. However, it presents the problem of transaction costs and in particular problems linked with imperfect information and co-ordination. This article argues that the use of a centralised intermediary in deregulated taxi markets can overcome these problems so that the benefits of competition are maximised, without the need for government fare regulation.     

基于成本差异的最佳贸易与产业政策选择

本文讨论了存在成本差异的第三国市场模型的最佳贸易与产业政策选择问题，讨论了社会成本和私人成本、本国和外国成本差异情况下的Cournot竞争和Bertrand竞争的情况。本文发现，在Cournot竞争下，政府首先行动时，当政府基金影子价格低于4／3时，政府对出口进行补贴，并且本国越有成本优势，补贴越高，补贴的利润转移效应越大；当政府基金影子价格高于4／3时，政府对出口征收出口税，且本国越有成本优势，征税越多。在Bertrand竞争下，当政府先行动时，对出口征收出口税；当政府后行动时，对出口进行补贴。当本国企业具有劣势时，事后补贴是最佳政蓑。     

Might randomization in queue discipline be useful when waiting cost is a concave function of waiting time?

This paper suggests that introducing randomization in queue discipline might be welfare enhancing in certain queues for which the cost of waiting is a concave function of waiting time. Concavity can make increased variability in waiting times good not bad for aggregate customer welfare. Such concavity may occur if the costs of waiting asymptotically approach some maximum or if the customer incurs a fixed cost if there is any wait at all. As examples, cost might asymptotically approach a maximum for patients seeking organ transplants who will not live beyond a certain threshold time, and fixed costs could pertain for knowledge workers seeking a piece of information that is required to proceed with their current task, so any delay creates a “set up charge” associated with switching tasks.     

The Resale Price Maintenance Struggle

A bstract Bills introduced in the 100th and 101st Congresses would amend the Sherman Act in regard to retail competition Their two key provisions would seek to (1) alter the standard of proof currently used for the establishment of illicit vertical price arrangements and (2) codify into law the judicially-established per se rule against resale price maintenance agreements The first provision seeks to overcome the effect of the establishment by the Supreme Court , in its Monsanto decision, of what is viewed as an illogical and impossible burden of proof on plantiffs seeking damages in resale price maintenance cases The second merely incorporates into statutory law the court's declarations in the Dr Miles case of the per se illegality of resale price maintenance agreements Arguments for and against this legislation are discussed and recent developments are examined     

A model of the firm in time and space

We consider a multi-plant monopoly that sells to markets which are geographically separated and which stores product over time via an inventory capability. It is assumed that plant average production cost is U-shaped and that, if the output of a plant's production run were sold to a single market at only one point in time, the plant would operate on the falling portion of its average cost curve. Hence, it is in the interest of the firm to aggregate markets, both spatially and temporally, to lower average production cost. We develop the optimal joint interplant spacing-inventory policy. We also consider the effects changes in freight costs, storage costs, and interest charges have on the firm's optimal policy.     

TRANSACTION COSTS, CLANS AND CORPORATE CULTURE

For a long time it has been recognized that traditional bureaucratic modes of control are not very efficient in many highly uncertain, rapidly changing or otherwise troublesome situations. Inspired by transaction cost thinking different authors have suggested that clan form control or certain types of corporate cultures should do better in these circumstances. Among these, Ouchi (1980) and Wilkins and Ouchi (1983) stand clearly in the foreground and the transaction cost related clan developed by these authors is discussed at length in the article. Further we examine some empirical case studies indicating that other types of mechanisms than suggested by transaction cost reasoning seem to be involved. As a result we propose an extension of the clan concept to include three different kinds of clans: (1) the Economic-co-operative Clan, (2) the Social-integrative Clan, and (3) the Blood-kinship Clan. Next we discuss how clans or local cultures become established, including the possibilities for management to develop these kinds of patterns intentionally. Finally we set up some tentative hypotheses concerning the significance of‘economic’and ‘social’types of clans in ambiguous situations and the limits of the ideas of the transaction cost approach in explaining complex exchange issues in organizations.     

Heterogeneity of Players and Aggregate Effort in Contests

We explore the systematic effects of variation in players' heterogeneity on aggregate effort in contests. We show that if costs of effort are convex, a mean‐preserving increase in the variation of players' abilities can lead to an increase or decrease in aggregate effort, both in contests of complete and incomplete information, depending on the curvature of the effort cost function. Specifically, if effort costs are not too steep, aggregate effort increases in ability variation, whereas if effort costs are sufficiently steep, aggregate effort decreases in ability variation.     

排污费与可转让排污许可证的比较——基于社会福利和制度实施层面的分析

排污费和可转让许可证制度是基于市场化环境规制的两种手段,这两种手段从理论上讲均能实现外部成本内部化,但可能在执行过程中带来不同的交易成本,对社会环境福利形成不同的收益。由于在制度设计上要获得厂商的边际收益函数和边际控制成本函数,但这种信息的获得很困难。对边际收益函数和边际控制成本函数的不同估计,造成的社会福利扭曲不同。在制度的实施层面,两种制度设计运作机理的不同,在现实的操作层面也会带来不同的排污结果。