Is there an equilibrating relationship between house prices and replacement cost? Empirical evidence from Berlin

It is a feature of competitive markets with forward-looking participants that a good’s benefit and its production cost are equalized in equilibrium and that no resources are wasted during the adjustment process. For housing markets, there is mixed evidence whether they meet this standard of allocative efficiency. Based on a unique data set with rich information on prices and cost, we examine the market for single-family houses in Germany’s capital Berlin. At the aggregate market level, we find that prices and cost tend to equalize in the long run. Short-run adjustment appears to be sufficiently fast and properly anticipated to prevent systematic excess profit opportunities. At the cross sectional level of individual houses, we find support that resources are allocated efficiently between different market segments. Taken together, our results provide sufficient evidence that the market in Berlin is efficient.     

Oligopoly firms with quantity-price strategic decisions

An agent-based model is used to determine market equilibrium with price-setting firms in an oligopoly market. The agent-based model is designed to match the experimental rules that Brandts and Guillen (J Ind Econ 55:453–474, 2007) used with human subjects. Their model uses posted prices and advance production of a perishable good. When the marginal cost is zero, the analytical Bertrand solution is almost perfect competition. When the marginal cost is nonzero, the game does not have a theoretical equilibrium in pure strategies. The agent-based model results show that with one or two firms, prices are at or near the monopoly level, which matches the human experiments. With four firms, prices are always at the perfectly competitive level when particle swarm optimization is used. Results using a genetic algorithm, however, are noisier than those using the particle swarm optimization, and the genetic algorithm falls short of the competitive solution. The triopoly market changes from mostly monopoly to a price in between monopoly and perfect competition when a marginal cost is added. The computerized agents tend to overproduce so that profits are negative in the three- and four-firm cases when production is costly. While the prices in the simulation are close to those observed in experiments with human subjects, the inefficiency due to overproduction is much greater in the agent-based model results. This result suggests that human agents are able to reach solutions, perhaps through social norms, that are missed by the simple agent-based rules used here.     

物流企业如何应对高油价

国际原油价格持续上涨,国内成品油价格也不断攀升,给国内的物流业带来了明显冲击。文章在分析油价上涨对物流成本、物流市场结构、物流竞争结构的影响的基础上,提出了面对高油价我们一方面应降低物流成本,缓解高油价带来的成本压力,另一方面可以通过提高运输价格、加强企业间的合作和发展绿色物流来提高国内物流企业竞争力,以应对高油价带来的影响。     

Middlemen and Oligopolistic Market Makers

This paper studies the endogenous structure of intermediation when heterogeneous intermediaries choose between becoming a middleman or a market maker, and the relation between the equilibrium market structure and price dispersion. We obtain three main results: First, middlemen and oligopolistic market makers can coexist in the market equilibrium. All market makers publicly post unique ask and bid prices. These prices serve as the high and low bounds, respectively, for the ask and bid prices of middlemen, when capacity cost is sufficiently large. Second, more efficient intermediaries choose to become market makers, whereas less efficient intermediaries choose to become middlemen. Third, if the fixed cost of capacity installation for market makers increases, the number of market makers declines, whereas the number of middlemen increases. As a result, both ask prices and bid prices become more dispersed.     

Quantity precommitment and price-matching

We study the effects of price-matching in a capacity-constrained duopoly setting. We show that no firm does worse at any pure equilibrium under price-matching relative to Bertrand, but as capacity increases, one or both firms do better relative to Bertrand. If the firms choose their capacities simultaneously before making pricing decisions, then the effect of price-matching varies with the cost of capacity. Specifically, when the cost is “high” price-matching either (i) has no effect on the market price, i.e., the market price associated with the pure SPEs is the Cournot one, or (ii) weakly decreases the market price relative to Cournot. Furthermore, when the cost is “low” price-matching leads to a set of (pure) SPE prices that includes the Cournot price in the interior. Therefore, price-matching does not necessarily benefit the firms when firms select their capacities before competing in price.     

Strategic Invasion in Markets with Switching Costs

We investigate the role of consumer switching costs in a three-stage model in which the entrant and the incumbent firm set prices sequentially and then the consumers decide from which firm to buy. We characterize the unique subgame perfect equilibrium and find that even an entrant with a higher marginal cost may profitably invade part of the market due to the existence of switching costs. Switching costs benefit both firms but harm consumers. This model is used to understand pricing behavior in the US telecommunications industry.     

Pricing Internal Trade to Get a Leg up on External Rivals

The pricing of transfers from parent to subsidiary is an oft-explored issue. Linking the cost of internal transfers with external market prices is one common approach, typically justified when the market for the good is perfectly competitive. This paper shows that imperfect competition may also justify market-based transfer prices. Concern that transfer price will deviate from marginal cost and thereby distort subsidiary choices can lead a parent to undertake actions to influence the market price of the upstream good. Such efforts can provide a desirable strategic posture in the upstream market.     

The values and incentive effects of options on the maximum or the minimum of the stock prices and market index

In this study, we employ the certainty equivalent principle to investigate cost efficiency and incentives of the options on the maximum or the minimum of the stock prices and market index levels. In addition, the options with averaging features are also considered. Numerical results show that options on the maximum are more cost efficient and incentive-efficient than traditional ones. As for options on the minimum, they are more cost efficient than traditional ones only when the weight in the options is not very large. However, options on the minimum also provide stronger incentives to increase stock prices than traditional ones.     

基于熵权系数法的房地产市场比较估价模型研究

房地产估价方法主要包括收益现值法、成本法和市场比较法等,其中,市场比较法由于更加符合房价由市场决定的准则而成为房地产估价中常用的方法。市场比较法是以以往可比性交易实例为估价基础,通过对各因素差异修正来评价待估房地产价格。熵权系数法可用来完善现有的房地产市场比较法,通过从各个可比房地产项目构成的系统中计算各交易实例的熵值,以确定各交易实例相比于待估房地产的贴近度,进而确定待估房地产的估价。     

Equilibrium in a mixed economy of arrow-debreu type

The functioning of the current NIS economies is severely affected by regulatory interferencies with supply and demand for many commodities. In particular, the presence of dual markets is characteristic for these economies. On the first market, typically the “low-price sector” of the economy, prices are fixed and the allocation of goods is determined by rationing schemes and governmental orders. On the second market, flexible prices resulting from the market mechanism coordinate demand and supply. It is allowed that any surplus of good purchased on the first market can be sold on the second market at the then prevailing market prices.     

The influence of racial segregation on housing prices

Census tract data were used to investigate the influence of racial segregation on housing prices in the Oakland, California housing market. White renters were found to pay a premium to live in segregated neighborhoods. Racial differences in the implicit prices of specific housing characteristics were also observed in the rental market: a unit of housing space was more expensive in the black rental submarket, while a unit of housing quality cost more in the white rental submarket. No significant differences were found in the prices paid by black and white homeowners, although for methodological reasons these results were less reliable than those for rental housing.     

Analysing the impact of restructuring transportation,production and distribution on costs and environment – a case from the Thai Rubber industry

Transportation and distribution are key elements to successful supply chains, however there is some disagreement regarding the impact of distribution and transportation restructuring on costs and the environment. This paper explores the use of an optimisation model of Thailand’s rubber industry supply chain, to assess the impact of distribution and transportation on costs and greenhouse gas emissions. It has previously been observed that there is a positive correlation between transportation cost reduction and environmental impact, nevertheless the correlation is not clearly established when the distribution system is restructured. This paper is divided into two parts: the first part examines the impact of transportation service capacity on distribution decisions; the second part of the paper aims to examine the impact of restructuring the distribution network considering multi-modal options on cost and greenhouse gas emissions. For both parts a scenario analysis is utilised in conjunction with an optimisation model to derive the best possible answer in terms of costs and GHG emissions. In this paper, the results obtained indicate that the impact on cost minimisation from the increase in rail freight service capacity is marginal, while the impact on GHG emission minimisation is more significant. In terms of short-sea shipping prices and service capacity, the scenario analysis shows a slight positive impact on cost minimisation but no positive or negative impact on GHG emission minimisation. Results also confirm that in terms of economic advantages, distribution network restructuring provides greater benefit to the industry than does capacity development for the transportation service.     

Why Lever into a Zero-Profit Industry: Tying, Foreclosure, and Exclusion

This paper considers the incentives of a firm with power in a market for one good to tie in the sale of a complementary good even though the complementary good is produced in a zero profit market. If the zero-profit price of the tied good is greater than the marginal cost (which occurs for example when the technology is characterized by a fixed cost and a constant marginal cost), a firm will fie in order to increase the sales of the complementary good, which at the margin is profitable. We show that such tying will lower the effective prices paid by customers and increase welfare. This incentive exists if the firm with market power is a monopolist or one of several competing oligopolists.     

Duality and continuity

This paper fills the one remaining lacuna in (multiple-output) duality theory by provingjoint continuity (in input and output vectors) of cost, benefit, and (input and output) distance functions. Continuity is an important property where measurement error exists, for it provides assurance that small errors of measurement (of quantities or prices) result only in small errors in concepts like minimal cost. We consider continuity not only in prices and quantities, but also in technologies. Continuity in technologies might be more important than continjity in prices or quantities, because production technologies are almost certainly measured (or estimated) with error.     

Intertemporal coordination in two-period markets

This paper studies the stability of the intertemporal coordination dynamics when the common knowledge of individual expectations of future prices is perturbed in a neighborhood of a perfect foresight equilibrium. The main forces that affect stability are: (i) the effect of a change in asset demand on second period spot market prices, and (ii) the effect on asset demand of a small change in second period prices. In an intertemporal market game whose interior Markov perfect equilibria correspond to perfect foresight equilibria, it is shown that though M-rationalizability implies the stability of the intertemporal dynamics, the converse is not always true.     

Intertemporal coordination in two-period markets

This paper studies the stability of the intertemporal coordination dynamics when the common knowledge of individual expectations of future prices is perturbed in a neighborhood of a perfect foresight equilibrium. The main forces that affect stability are: (i) the effect of a change in asset demand on second period spot market prices, and (ii) the effect on asset demand of a small change in second period prices. In an intertemporal market game whose interior Markov perfect equilibria correspond to perfect foresight equilibria, it is shown that though M-rationalizability implies the stability of the intertemporal dynamics, the converse is not always true.     

Mispricing in the odd lots market in Brazil

We study the case of mispricing in the odd lots equity market in Brazil. Contrary to expectation, odd lot investors are paying higher prices than round lot investors. The pricing difference between markets is affected by market returns, volatility and spreads. Our main hypothesis is that; once the assets traded in the odd lot market are more illiquid than their counterparts, the mispricing is driven by liquidity factors. Additionally, we show that the mispricing yields an arbitrage opportunity that is not being traded away in the Brazilian market. Therefore, we propose regulators to review the market design for odd lots in Brazil. We argue that reducing the minimal trading unit in the round lots market would benefit investors.     

The Effect of CEO Stock-Based Compensation on the Pricing of Future Earnings

This paper examines whether CEO stock-based compensation has an effect on the market’s ability to predict future earnings. When stock-based compensation motivates managers to share their private information with shareholders, it will expedite the pricing of future earnings in current stock prices. In contrast, when equity-compensated managers attempt to temporarily manipulate the stock price to maximize their own benefit rather than that of shareholders, the market may not fully anticipate future performance. We find that a CEO’s stock-based compensation strengthens the association between current returns and future earnings, indicating that more information about future earnings is reflected in current stock prices. In addition, we find that the positive effect is weaker for firms that have a high level of signed discretionary accruals or a low management forecast frequency. Overall, our study suggests that on average, equity-based compensation improves the informativeness of stock prices about future earnings, while opportunistic discretionary accruals or lowered earnings guidance hamper this improvement.     

上市公司会计信息成本效益的对策研究

会计信息是企业利益相关者进行利益分配的基础,是影响资本市场有效性的关键因素。企业作为“理性的经济人”,其提供的会计信息受到成本效益的制约,效益大于成本是其对外提供信息的先决条件之一。会计信息的成本不仅包括实际成本,也包括信息披露所引起的或有成本,其效益不仅体现为微观效益,更重要的是其所带来的社会效益。本文借助于经济学的基本理论,利用“成本—效益”对比分析原则,解析上市公司会计信息供给中的策略选择及其改进措施。     

Vertical separation of transmission control and market efficiency in the wholesale electricity market

This study examines how vertical separation of transmission control affects the wholesale market efficiency in the electric power industry. We analyze a unique regional electricity wholesale market in the U.S. where initially restructuring only occurred in the transmission sector. Following a commonly-used best dispatch model (Wolfram, 1999; Borenstein et al., 2002), we simulate competitive benchmark prices and compare with the best estimates available for actual prices to measure price-cost markups of the wholesale market. Empirical results demonstrate that the vertical separation of transmission control led to a significant increase in market markups in peak-load hours, documenting evidence of enhanced market power. Although we also find a reduction in the price-cost margin in low-demand hours, we reserve caution for this finding.