PRICE SETTING PRACTICES IN GREECE: EVIDENCE FROM A SMALL‐SCALE FIRM‐LEVEL SURVEY

The paper documents the price setting practices followed by some 400 or so firms operating in Greece. Survey replies reveal a low percentage of firms changing prices with frequency higher than annual and staggering of price changes during the year. As to firms’ reactions to unexpected shocks, prices appear to adjust sluggishly to cost shocks with asymmetries in price adjustment across positive and negative shocks. Adjustments to increases in costs appear speedier than those to reductions in demand. The data confirm a result found for other countries: the existence of cross‐sectional variations in price setting strategies and in the extent to which prices are adjusted in reaction to unexpected shocks. The results suggest a positive association between, on the one hand, product market competition and, on the other hand, state‐dependent pricing, frequent price changes and the likelihood of a price adjustment following an adverse demand shock.     

The Choice of Technology and Equilibrium Wage Rigidity

In this general equilibrium model, firms engage in oligopolistic competition and choose increasing returns technologies to maximize profits. Capital and labor are the two factors of production. The existence of efficiency wages leads to unemployment. The model is able to explain some interesting observations of the labor market. First, even though there is neither long-term labor contract nor costs of wage adjustment, wage rigidity is an equilibrium phenomenon: an increase in the exogenous job separation rate, the size of the population, the cost of exerting effort, and the probability that shirking is detected will not change the equilibrium wage rate. Second, the equilibrium wage rate increases with the level of capital stock. Third, a higher level of capital stock does not necessarily reduce the unemployment rate. That is, there is no monotonic relationship between capital accumulation and the unemployment rate.     

Dynamic factor demands and market structure under rational expectations: some estimates for the Italian manufacturing system

This paper deals with a dynamic model of the behaviour of firms under rational expectations. The adjustment cost framework is followed to describe production technologies. The objective of firms is to maximize the stream of future profits under rational expectation. First-order conditions for the optimum are derived with respect to input demands and one output supply. The output market structure is modelled in order to test price taking behaviour. The adjustment costs of quasi-fixed inputs are internal and interrelated. The model is estimated for the Italian manufacturing system with encouraging results.     

科斯《企业的性质》之质疑

企业是资源所有者的取得更多的收益而建立起来的经济组织，交易成本的存在并不是企业存在的根本原因，科斯将企业定义为不同于价格调节机制的企业家计划调节机制，源于其错将企业计划混同于计划经济，事实上，企业是以市场合约为基础形成的，按市场运行原则运作的市场性组织，其资源配置并不独立于市场价格机制之外，价格调节机制与企业家调节机制是不可分割的两个方面，任何企业作为市场参与者与市场都是互动的。     

Subsidy competition,industrial land price distortions and overinvestment: empirical evidence from China’s manufacturing enterprises

In China, offering inexpensive industrial land is a major means for local governments to participate in interregional subsidy competition, which caused regional industrial land price distortions. This article examines the effect of regional industrial land price distortions on the overinvestment of Chinese manufacturing enterprises. Chinese industrial enterprises data and land price monitoring data of 49 major cities in China between 1998 and 2007 are employed. This article has found that industrial land price distortions will significantly stimulate the overinvestment of manufacturing enterprises. Such a promoting effect varies among manufacturing enterprises of different ownership and industry attributes. Industrial land price distortions have the most significant promoting effect on the overinvestment of foreign-invested firms, followed by private firms, while state-owned enterprises are the least affected. Compared with private heavy-industry firms, industrial land price distortions have a more significant effect on the overinvestment of private light-industry firms. Compared with foreign-invested heavy-industry firms, industrial land price distortions have a more significant effect on the overinvestment of foreign-invested light-industry firms. This study represents a positive exploration and supplement to the existing studies on the effects of subsidy competition on corporate investment behaviours and the studies on Chinese-style subsidy competition.     

展览产品定价模型及价格影响因素研究——基于双边市场理论视角

本文借鉴近年来兴起的双边市场理论对展览产品的定价模型及影响因素进行了理论研究。本文指出，展览市场是典型的双边市场，具有明显的网络外部性。本文通过建立垄断和竞争两种模型研究了展览产品的定价，并指出参展商和观众的需求价格弹性、一方消费者给另一方消费者带来的网络外部性、展览市场的竞争以及产品差异化都是影响展览产品定价的主要因素。     

Structure, conduct, and performance: evidence from the Indonesian food and beverages industry

This article employs the Structure–Conduct–Performance (SCP) paradigm to investigate the simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin in the Indonesian food and beverages industry. This research extends the SCP framework by including price rigidity and technical efficiency as additional key variables. The results suggest that there is a simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin with a positive bi-directional relationship between industrial concentration and price-cost margin. These findings imply that an appropriate course of action for the regulator in this highly concentrated industry is to reduce industrial concentration in order to increase competition, reduce upward price flexibility, and increase technical efficiency in the long run.     

Market structure in congestible markets

This paper analyses market structure of industries that are subject to both positive and negative network effects. The size of a firm determines the quality of its product: when network effects are positive, a larger firm is of higher quality; when the effects are negative, a larger firm's product is of lower quality. Consumers have heterogeneous preferences towards quality (firm size), and firms compete in prices. Equilibria are characterised: for example, in any asymmetric equilibrium, it must be that congestion is not too severe. One consequence of this feature is that an increase in the number of firms in the industry can raise individual firms’ profits. Two factors can bound the number of firms in a free-entry equilibrium without fixed costs: expectations, and the ‘finiteness’ property (Shaked and Sutton, Review of Economic Studies 49 (1982) 3–13, Econometrica 51(5) (1983) 1469–1483) of price competition.     

Bank behavior, incomplete interest rate pass-through, and the cost channel of monetary policy transmission

This paper employs a New Keynesian DSGE model to explore the role of banks within the cost channel of monetary policy transmission for shaping the interest rate pass-through from money market rates to loan rates. Banks extend loans to firms in an environment of monopolistic competition by setting their loan rates in a staggered way, which means that the adjustment of the aggregate loan rate to a monetary policy shock is sticky. We estimate the model for the euro area by adopting a minimum distance approach. Our findings exhibit that (i) financial costs are an important factor for price changes, (ii) frictions in the loan market have an effect on the propagation of monetary policy shocks as the pass-through from a change in money market rates to loan rates is incomplete, and (iii) the strength of the cost channel is mitigated as banks shelter firms from monetary policy shocks by smoothing loan rates.     

Analysis of threshold cointegration with asymmetric adjustments in the Hong Kong grocery industry

High market concentration in the Hong Kong grocery industry has been prevalent over many years with the domination of a few large supermarket chains. However, no research has been conducted on the price dynamics between the supermarket and non-supermarket sectors to investigate whether the non-supermarket sector can impose competitive discipline on the dominating supermarket chains. We argue that standard cointegration tests cannot allow for transaction costs and distinguish whether the price co-movement is attributable to price competition or collusion. Our study therefore fills this research gap by adopting the threshold cointegration tests in a three-regime threshold vector error-correction model to account for the asymmetric price adjustment dynamics between supermarket and non-supermarket sectors of Hong Kong and evaluate the market power of the supermarket sectors in the presence of transaction costs. Our results favour the presence of cointegration between the supermarket and non-supermarket price indices with asymmetric adjustment dynamics. We interpret the results of statistically significant downward price adjustments in the outer-band regimes as the evidence of mutual price competition. Nevertheless, the supermarket sector has stronger market power than the non-supermarket sector, and therefore can sustain higher price level without inducing substantial competition pressures inside the neutral band.     

Dynamic factor demands and adjustment costs: An analysis of bell Canada's Technology

In this paper a dynamic model of production is estimated for Bell Canada. The dynamics arise from the costs of adjustment associated with capital expansion. Estimation results showed that there are significant adjustment costs. Thus, the hypothesis of long-run cost minimization is rejected. As Bell Canada increases its capital stock by $1, there are additional adjustment costs of $0.36. This result implies that Bell Canada minimizes the present value of production and adjustment costs which results in a short-run equilibrium position. Price, substitution and output elasticities are estimated. In the short-run the inputs are substitutes and the price effects are highly inelastic. Overshooting occurs with respect to labour and material demands in the short-run since the demand for capital responds very little to output expansion. Returns to scale are also estimated in this cost of adjustment model. Bell Canada exhibits increasing returns to scale initially and then decreasing returns such that on average there are constant returns to scale with a scale elasticity of 1.08.     

The complexion of dynamic duopoly game with horizontal differentiated products

In this paper, firms are considered on the hypothesis of having incomplete rationality expectation and incomplete information of the market to get the dynamic development of price competition behavior in the Hotelling model (Hotelling, 1929). Under the assumption of the heterogeneous expectations of two firms, we have observed that the Nash equilibrium price can be a dynamic equilibrium to realize when the speed of price adjustment is lower. However, the numerical simulation shows that the system may present a periodic and chaotic status when the speed of price adjustment is higher. The effect of the degree of horizontal differentiation on the stability of Nash equilibrium of the system is also discussed. We have a different conclusion from Lucino Fanti and Luca Gori's (2012); that is the greater the degree of product horizontal differentiation is, the more stable the Nash equilibrium of the system is.     

Technological Progress, Downsizing and Unemployment

This paper presents a model where the form of innovations is endogenous. It is shown that with labour market imperfections, which raise the wage above the shadow price of labour, firms over-invest in innovations cutting labour costs and under-invest in increasing quality. As a result, the market outcome features lower long run growth, higher unemployment and lower welfare than the social optimum. It is further shown that a firm's incentives to cut labour costs are increased as wages rise and as the firm declines. Finally, a rise in competition increases incentives to downsize for firms with below average quality performance.     

产品差异、转移成本和市场竞争

文章通过在豪泰林空间差异模型的基础上结合转移成本构建的博弈模型,主要研究转移成本和产品差异的存在对于企业价格竞争和策略性行为的影响。文章发现纯策略价格均衡是否存在以及在位企业容纳还是遏制竞争对手的潜在进入,都依赖于转移成本相对于产品差异程度的大小。     

Are Oil Price News Headlines Statistically and Economically Significant for Investors?

While much has been written about the effects of oil price on stock returns, surprisingly nothing is known about the effect of oil price news on stock returns. This article is a response to this research gap. For a large number of stocks on the New York Stock Exchange, the authors find that while oil price news does predict market returns it only predicts returns of some sectors and not all. They find that sorting stocks based on oil price news generates a significant return differential in the cross-section, which holds consistently across a range of models allowing for the well-known risk factors. Their findings suggest that information contained in oil price news affects stock returns.     

QUALITY CHOICE AND MARKET STRUCTURE: A DYNAMIC ANALYSIS OF NURSING HOME OLIGOPOLIES

This article develops a dynamic model of entry and exit to analyze quality choice and oligopoly market structure in the nursing home industry. I find significant heterogeneity in the competitive effects across market structures: Firms of similar quality levels compete more strongly than dissimilar firms. Sunken entry costs are extremely large, and quality adjustment behavior is governed by significant fixed adjustment costs. A proposal to eliminate low‐quality nursing homes is found to cause a large supply‐side shortage, and another proposal to lower entry costs has offered a perverse incentive to provide low quality of care.     

发展中国家跨国公司的一体化战略研究

本文尝试以建立一个发展中国家跨国公司一体化战略选择的内生模型来研究差异化厂商基于国家间要素禀赋优势、贸易成本、市场容量以及自身技术水平等因素做出的一体化战略选择。并且通过比较静态分析方法,将此研究扩及到贸易自由化对差异化厂商均衡时的一体化战略、平均价格和生产规模,以及整体产业平均技术水平的影响。     

Oil prices and UK industry-level stock returns

In this article, we study whether the behaviour of oil prices can be used as a reliable predictor for the disaggregated industry-level stock market indices. We find strong evidence for the relevance of changes in oil price as a predictor for the returns of UK industry portfolios, while this relevance is heterogeneous across industries. In an out-of-sample framework, we find that both the contemporaneous and lagged oil price changes do predict UK industry stock market returns. The predictive power is more transient for the latter case, and mostly appearing after allowing for time variation in the relative performance. In addition, we find some evidence of asymmetry in the oil–stock price relationships.     

Analysis of price competition and strategic implications for heterogeneous market structure

This paper examines strategic competition behavior in heterogeneous market structure where both conventional offline and online firms coexist in equilibrium and draws strategic implications with some remarks on welfare. Research on the price competition between conventional offline and online firms has been done through empirical approaches; however, the results are conflicting. This paper reconciles the existing conflicting empirical findings on price levels between conventional offline and online firms through a theoretical approach. We find that as the online market matures, prices in both conventional and online firms drop, and the price in the online firm can be higher than that in a conventional offline firm. Furthermore, if convenience associated with the online increases, the online price tends to exceed the conventional offline price.     

Commitment to a strategy of uniform pricing in a two-period duopoly with switching costs

This paper studies decisions by firms of whether to attempt “behavior-based” price discrimination in markets with switching costs by using a two-period duopoly model. When both firms commit themselves to a pricing policy and consumers are “sophisticated” and have rational expectations, there is a dominant strategy equilibrium with both firms engaging in uniform pricing. Both firms are better off in the uniform pricing equilibrium, compared with the discriminatory equilibrium.