Perfect competition in an oligopoly (including bilateral monopoly)

We show that if limit orders are required to vary smoothly, then strategic (Nash) equilibria of the double auction mechanism yield competitive (Walras) allocations. It is not necessary to have competitors on any side of any market: smooth trading is a substitute for price wars. In particular, Nash equilibria are Walrasian even in a bilateral monopoly.     

Operating performance changes associated with corporate mergers and the role of corporate governance

We find that corporate governance characteristics of acquiring firms (board ownership, board size, and block-holder control) have an economically and statistically significant impact on operating performance changes following mergers. We also show that dispersion of intra-board ownership stakes is an important but heretofore overlooked factor when judging the influence of ownership on the outcomes of corporate choices. Finally, we present evidence that suggests the market sometimes under- or overreacts to merger news when initially revaluing merger partners but corrects any miscalculation following the consummation of the merger.     

Some people just want to read: The roles of age,interactivity, and perceived usefulness of print in the consumption of digital information products

With the advent of digital technologies, both academic researchers and marketing practitioners alike continually seek a richer understanding of the way information is produced and consumed. Against this backdrop, this study explores the relationship between interactivity, consumer satisfaction and adoption intention in the context of digital information products. Drawing broadly on the services marketing literature, interactivity literature and diffusion theory, the results of our study suggest that in a utilitarian context, consumers are more likely to adopt interactive books than more traditional static e-books. However, satisfaction with interactivity is moderated by the age of the consumer, with older “digital immigrant” participants more satisfied by static e-books and younger “digital native” participants more satisfied by interactive e-books. Also, the less useful consumers find print products, the more likely they will be to adopt interactive digital books, and this effect is also moderated by the age of the consumer. Finally, with the proliferation of digital devices only expected to continue, these findings have important implications for both product development and marketing communication programs.     

Product classifications,consumer characteristics,and patronage preference for online auction

An important unanswered question in the area of Internet auctions is what dynamics influences consumer preferences for shopping on these online auctions. Two key aspects of studying what sells on the Internet auctions are (a) the characteristics of products to be purchased and (b) consumer characteristics. This research focuses on the relationship between product purchase preference, prior experience, and socioeconomic characteristics for the online auction participants. It uses product classification theory rooted in information economics and marketing. The study results are based on a US national sample of online auction participants. The findings suggest that product class affects online auction patronage, yet socioeconomic characteristics may not be as influential as once perceived. The online merchants can benefit from the inquiry to improve auctions for search, experience, and credence goods. The five key contributions of the findings add value to the theory and practice of consumer behavior.     

Non-linear Dependence in Stock Returns: Does Trading Frequency Matter?

The UK has a quote-driven pure dealer market structure that is very different from order driven markets such as the NYSE and Japanese markets. This paper investigates non-linear dependence in stock returns for an exhaustive sample of UK stocks for a 21 year period. The results are analysed on the basis of trading frequency. It is found that non-linear dependence is highly significant in all cases for both individual stocks and stock portfolios formed on the basis of trading frequency. The non-linear dependence is primarily over a one day interval, although statistically significant non-linear dependence exists consistently even up to five trading days. Most of the non-linear dependence is in the form of ARCH-type conditional heteroskedasticity. However, statistically significant non-linearity in addition to an EGARCH(1,1) dependence also appears to be present. This additional non-linearity is greater for individual stocks than for portfolios and greater for smaller, less-liquid portfolios. Non-linear dependence does not appear to be caused by non-stationarity in underlying economic fundamentals or by non-linearity in the conditional mean. However, low dimensional chaos is not generally supported. The limited evidence on chaotic behaviour is stronger for portfolios with long price adjustment delays across component stocks. The main results are consistent with US studies on stock indices, suggesting that the process generating non-linear dependence is not dependent on market microstructure characteristics.     

Inside and outside fiat money, gains to trade, and IS-LM

Summary. We build a one-period general equilibrium model with money. Equilibrium exists, and fiat money has positive value, as long as the ratio of outside money to inside money is less than the gains to trade available at autarky. We show that the nominal effects of government fiscal and monetary policy can be completely described by a diagram identical in form to the IS-LM curves introduced by Hicks to describe Keynes' general theory. IS-LM analysis is thus not incompatible with full market clearing, multiple commodities, and heterogeneous households. We show that as the government deficit approaches a finite threshold, hyperinflation sets in (prices converge to infinity and real trade collapses). At the other extreme, if the government surplus is too large, the economy enters a liquidity trap in which nominal GNP sinks and monetary policy is ineffectual. Received: January 2, 2002; revised version: April 8, 2002 Correspondence to: P. Dubey     

Efficiency properties of strategies market games: An axiomatic approach

The paper investigates the conditions under which an abstractly given market game will have the property that if there is a continuum of traders then every noncooperative equilibrium is Walrasian. In orther words, we look for a general axiomatization of Cournot's well-known result. Besides some convexity, continuity, and nondegeneracy hypotheses, the crucial axioms are: anonymity (i.e., the names of traders are irrelevant to the market) and aggregation (i.e., the net trade received by a trader depends only on his own action and the mean action of all traders). It is also shown that the same axioms do not guarantee efficiency if there is only a finite number of traders. Some examples are discussed and a notion of strict noncooperative equilibrium for anonymous games is introduced.     

Exploiting Mobile Technology for Achieving Supply Chain Integration in Indian Retail

For decades supply chain coordination has been subject to research interest, and technology has been seen as an agent that accelerates this process. In developing countries, with far-flung markets and unorganized distribution networks, using technology for improving supply chain performances and accessing information is not an easy task. The research was directed to understand if mobile technology is being used by downstream supply chain partners for information sharing and thus improving supply chain performances. Findings suggest that supply chain integration with suppliers and customers is done through extensive use of mobile networks.     

Corporate Public Issue Advertising

This article presents the results of a study of the attitudes of chief executives regarding issue advertising. The study used a set of four issue advertisements representing varying degrees of self-interest. The results indicate marked differences between business leaders in their perceptions of both the usefulness and favourability of different issue advertising messages.