A UNIFIED PRESENTATION OF COMPETITION ANALYSIS IN TWO-SIDED MARKETS

The goal of this paper is to present quantitative tools to manage competition policy analysis in two-sided platforms, based on a common framework for transaction and non-transaction platforms. We explore tools for relevant market definition [Critical Loss Analysis and a small but significant non-transitory increase in price (SSNIP) test], unilateral effects indicators [Upward Pricing Pressure (UPP) and Gross Upward Pricing Pressure Index (GUPPI)] and tests for exclusionary practices. We review dispersed results in the literature and fill the gaps where appropriate. We highlight the required changes from the usual one-sided market framework and tools. While discussions of antitrust tools can be found in specialized forums devoted to advances in competition policy analysis, we organize the material in an integrated framework.     

Michael Redclift. Chewing Gum: The Fortunes of Taste

Chewing gum was foremost an American invention, Michael Redclifttells us in Chewing Gum: The Fortunes of Taste, a brief yetserious and engaging book that details how chewing gum cameto occupy a distinct place in the rise of American consumerism.Perhaps nothing signified the triviality of consumerism as chewinggum. It possessed what Redclift calls an "ephemeral quality,"it was an easily replicable mass product, and provided instantgratification. This ephemerality was complicated by     

Quantile serial dependence in crude oil markets: evidence from improved quantilogram analysis with quantile wild bootstrapping

We examine the quantile serial dependence in crude oil prices based on the Linton and Whang’s quantile-based portmanteau test which we improved by means of quantile wild bootstrapping (QWB). Through Monte Carlo simulation, we find that the quantile wild bootstrap-based portmanteau test performs better than the bound testing procedure suggested by Linton and Whang. We apply the improved test to examine the efficiency of two crude oil markets – WTI and Brent. We also examine if the dependence is stable via rolling sample tests. Our results show that both WTI and Brent are serially dependent in all, except the median quantiles. These findings suggest that it may be misleading to examine the efficiency of crude oil markets in terms of mean (or median) returns only. These crude oil markets are relatively more serially dependent in non-median ranges.     

Project Management of Production Line Automation: A Comparative Analysis of Project Management in Brazil and Colombia

This article aims to evaluate the production line automation projects developed by Brazilian and Colombian companies from the Project Management perspective, through the analysis of the application degree of PMBOK processes, to understand how formal techniques are being employed in these countries and also to identify improvement opportunities, when necessary. Data were collected through a survey. The similarity index between the ten processes, with the highest application degree in the Brazilian and Colombian samples, was 70%. For the processes with the lowest application degree, the similarity index was 60%. No similar study was found in the literature.     

Do Sovereign Defaults Hurt Exporters?

This paper uses a difference-in-difference methodology similar to the one originally proposed by Rajan and Zingales to test whether sovereign defaults hurt the more export-oriented industries disproportionately, and it finds strong support for this hypothesis. However, contrary to the findings of previous studies, our estimates suggest that the effect of defaults is short-lived.     

Valuing the implicit guarantee of the Federal National Mortgage Association

The paper analyzes the guarantee of the Federal National Mortgage Association (FNMA). Rather than try to price the guarantee, we used time-series estimates of its value from Kane and Foster to infer the behavior of FNMA in exploiting the guarantee. The results are consistent with a model that predicts that FNMA does not take as much risk as it might. Rather, it trades off risk and return, but it does increase risk and exploit the guarantee when it gets in trouble (as it did in 1981).We have received helpful research assistance from Peter Carr and Bruno Gerard.     

Homeownership as a Constraint on Asset Allocation

Personal preferences and financial incentives make homeownership desirable for most families. Once a family purchases a home they find it impractical (costly) to frequently change their ownership of residential real estate. Thus, by deciding how much home to buy, a family constrains their ability to adjust their asset allocation between residential real estate and other assets. To analyze the impact of this constraint on consumption, welfare, and post-retirement wealth, we first investigate an individual’s optimal asset allocation decisions when they are subject to a “homeownership constraint.” Next, we perform a “thought experiment” where we assume the existence of a market where a homeowner can sell, without cost, a fractional interest in their home. Now the housing choice decision does not constrain the individual’s asset allocations. By comparing these two cases, we estimate the differences in post-retirement wealth and the welfare gains potentially realizable if asset allocations were not subject to a homeownership constraint. For realistic parameter values, we find that the homeowner would require a substantial increase in total net worth to achieve the same level of utility as would be achievable if the choice of a home could be separated from the asset allocation decision. The robustness of the analysis is evaluated with respect to the model’s parameters and initial state variables. We find that changes in the values of the constraint (i.e., the value of the home) and the expected real rate of home value appreciation are the only state variables or parameter that is associated with a large change in asset allocation and/or the burden imposed by the housing constraint. This finding suggests the importance of a detailed examination of the impact of inter-regional differences in home prices and expected rates of appreciation on asset allocation and post-retirement wealth.     

Optimal investment and production decisions and the value of the firm

We explore the effects of uncertainty on a firm that can respond by modifying its investment or production schedule (or both simultaneously) to variations in output price. Investment may increase capacity and/or reduce costs. We consider a firm with finite resources.Our model uses option theory instead of the more traditional net present value framework. One of the early papers using this approach is Brennan and Schwartz (1985) in which an investment project to extract a finite natural resource is valued. In that paper, the value of the firm is a function of two state variables, the finite resource to be extracted (output to be produced in the future) and the commodity spot price. In order to maximize firm value, the manager can respond by modifying one control variable, the production level. In our model we handle instead three state variables (spot price, resources, accumulated investment) and two control variables (production rate and investment rate), and solve numerically.We obtain both the value and the optimal policy of a firm that has investment projects that increase capacity and/or reduce costs and illustrate optimal policies as resources and available investments decrease over the life of the firm. Firms may start by only investing, then invest and produce, to end only producing.We thank Scott Wo, the referee and the editor for their comments and suggestions. Cortázar and Lowener acknowledge the financial support from FONDECYT and FONDER.     

Pedestrian traffic injuries in Mexico: A country update

Road traffic injuries in general and pedestrian injuries in particular are a major public health problem in Mexico, especially in large urban areas. Analysis of mortality and road crashes at the national level was done using routine data recorded on death certificates. Fatality rates for different age groups were estimated by region for the year 2000. These data were supplemented by a cross-sectional study of pedestrian injuries in Mexico City based on death certificates information for pedestrians who lived and died in Mexico City between 1994 and 1997. Participant observation of physical spaces where crashes occurred was carried out. The spaces were filmed and in-depth interviews of survivors conducted. Road traffic crashes were responsible for approximately 17,500 deaths in Mexico during 2000. The mean age of the victims was 37 years. Mexico lost an average of 30 years of productive life for each individual who died in a traffic crash – 525,000 years in 2000. An estimated 9500 (54.3%) of all fatalities were pedestrians, and for every pedestrian death there were 13 others who sustained nonfatal injuries requiring medical care. The overall crude mortality rate for pedestrian injuries in Mexico City was 7.14 per 100,000 (CI 6.85-7.42). A concentration of deaths was observed in 10 neighborhoods at specific types of street environments. The underlying factors included dangerous crossings and the absence or inadequacy of pedestrian bridges, as well as negative perceptions of road safety by pedestrians. In conclusion, this study demonstrates the importance of elucidating the underlying contextual determinants of pedestrian injuries.