Competition and price dispersion in the airline markets

We use two ticket-level data sets on one-way domestic flights for the US airlines to examine the potentially nonlinear relationship between price dispersion and three forms of competition: inter-firm, inter-flight and frequency competitions. The linear relationship is rejected at any conventional significance levels. In particular, there is an S-shaped relationship between market concentration and price dispersion. This can be a reason for the mixed results in the literature. Roughly speaking, the inter-flight and frequency competitions have opposite effects on price dispersion. Finally, in general, the size of aircraft has a positive effect on price. However, for very large aircraft, the relationship becomes negative.     

An experimental investigation of soft price caps in uniform price auction markets for wholesale electricity

This paper presents the results from an auction experiment using industry professionals and student participants who compete in a simulated wholesale market for electricity. Motivated by the intervention by FERC in response to the “meltdown” of the California spot market, we investigate the effect of including a “soft” price cap in a uniform price auction as a means of mitigating high prices. When prices are driven above the soft cap, offer curves become flat, in contrast to the hockey stick shape observed in a typical uniform price auction for electricity. This flat offer curve leads to market prices that are relatively insensitive to both generation costs and demand reductions.      

Price transmission in the international skim milk powder markets

This article investigates the strength and the pattern of spatial price linkages in skimmed milk powder markets using monthly wholesale price data from three major producers and exporters (the U.S.A., the E.U., and Oceania) and the nonlinear autoregressive distributed lag model. The results suggest that prices in the three regions considered are linked with stable long-run relationships. The law of one price, however, does not hold. The dominant pattern of transmission in the long run is asymmetric involving positive price stocks to be transmitted with higher intensity compared to negative prices shocks; asymmetries in price transmission exist in the short run as well.     

Scale economies with regard to price adjustment costs and the speed of price adjustment in Australian manufacturing

This paper aims to examine the impact of firm size, industry concentration and the length of production on industry speed of price adjustment. To motivate the paper, an industry pricing model in error correction form is derived from firm pricing behaviour. As a new development, firms are assumed to have price adjustment costs that are a function of their size. The empirical model is estimated using two‐digit Australian manufacturing industry data for the period 1994:3 to 2006:1. The results suggest that the industry speed of price adjustment is positively related to firm size and negatively related to industry concentration and the production lag. Implied values for industry speeds of price adjustment are generally small when compared to other country industry studies. However, the industry average median lag of 7.1 quarters indicates a slightly faster speed of price adjustment than the estimate for the Australian consumer price index by Dwyer and Leong (2001 Dwyer, J. and Leong, K. 2001. Changes in the determination of inflation in Australia 1–44. Reserve Bank of Australia Research Discussion Paper 2001‐02 [Google Scholar]).     

Price convergence across regions in India

The paper attempts to examine whether there is price convergence across various regions in India. Using panel unit root tests that are robust to cross-sectional dependence, it is found that relative price levels among various regions in India are mean-reverting. Further, we decompose each series into a set of common factors and idiosyncratic components. The decomposition enables us to test stationarity and estimate half-lives of the common factors and the idiosyncratic components separately. Both these components are found to be stationary. Idiosyncratic price shocks, however, are found to be more persistent as compared to the common factor. Results also indicate that transportation cost proxied by distance can explain a part of the variation in prices between two locations in India. The authors would like to thank Dibyendu Bhaumik for arranging the data for this study. Views expresed in the paper are personal and do not reflect the views of the organizations.     

Noisy chaotic dynamics in commodity markets

The nonlinear testing and modeling of economic and financial time series has increased substantially in recent years, enabling us to better understand market and price behavior, risk and the formation of expectations. Such tests have also been applied to commodity market behavior, providing evidence of heteroskedasticity, chaos, long memory, cyclicity, etc. The present evaluation of futures price behavior confirms that the resulting price movements can be random, suggesting noisy chaotic behavior. Prices could thus follow a mean process that is dynamic chaotic, coupled with a variance that follows a GARCH process. Our conclusion is that models of this type could be constructed to assist in forecasting prices in the short run but not over long run time periods.First version received: June 2001/Final version received: March 2003     

备考江苏省计算机等级考试（二级VFP）策略

以Visual FoxPro（VFP）程序设计为例,具体分析了江苏省计算机等级考试的特点和题型,在此基础上,阐述了考生备考的复习方略,考试技巧,以期对广大考生有所帮助。     

History-based price discrimination and entry in markets with switching costs: A welfare analysis

We analyze history-based price discrimination in an asymmetric industry, where an incumbent, protected by switching costs, faces an entrant who does not have access to information about consumers’ purchase histories. We demonstrate that consumer surplus is higher with uniform pricing than with history-based price discrimination. We find that the entry decision is invariant to whether the incumbent implements history-based pricing or uniform pricing. This implies that the potential abuse of market dominance imposed by history-based price discrimination is exploitation, not exclusion. Finally, we establish that the profit gain to the incumbent from history-based pricing exceeds the associated loss to consumers.     

Choice, price competition and complexity in markets for health insurance

The United States and other nations rely on consumer choice and price competition between competing health plans to allocate resources in the health sector. While a great deal of research has examined the efficiency consequences of adverse selection in health insurance markets, less attention has been devoted to other aspects of consumer choice. The nation of Switzerland offers a unique opportunity to study price competition in health insurance markets. Switzerland regulates health insurance markets with the aim of minimizing adverse selection and encouraging strong price competition. We examine consumer responses to price differences in local markets and the degree of price variation in local markets. Using both survey data and observations on local markets we obtain evidence suggesting that as the number of choices offered to individuals grows, their willingness to switch plans given a set of price dispersion differences declines, which allows large price differences for relatively homogeneous products to persist. We consider explanations for this phenomenon from economics and psychology.     

Optimality in stochastic OLG models: Theory for tests

We consider general OLG economies under uncertainty, with short maturity assets and with dividend paying assets of infinite maturity and fiat money, and study the optimality properties of equilibria with a sequence of asset markets that are sequentially complete. We provide necessary and sufficient conditions, in terms of asset prices and dividends, for equilibria to be conditionally Pareto optimal. These results provide a theoretical basis for empirical investigation.     

Profitability and supply price in the US domestic oil industry: implications for the political economy of oil in the twenty-first century

In May 2001, the US Government's National Energy Policy DevelopmentGroup proposed to increase investment in domestic oil resourcesand to diversify further the sourcing of US oil imports by increasingproduction in new petroleum provinces. The paper argues thatboth strands of this policy are dependent upon a third, unstated,objective—to ensure that OPEC retains sufficient marketpower to prevent the sort of collapse in world oil prices thatoccurred in 1998–99. The consequences of that collapse,when the real price of US oil fell to its lowest level in 53years, are explored. Finally, it is argued that the outcomeof the crisis was a rapprochement between OPEC and the US. Itis suggested that the consensus between the US and OPEC as tothe desired range within which the world oil price should moveis likely to survive any temporary political disturbances.     

Reconsidering the macroeconomics of the oil price in Germany: testing for causality in the frequency domain

This paper reconsiders the macroeconomics of the oil price for Germany. It investigates whether causality between the oil price and a selection of both macroeconomic and financial market variables differs between frequency bands. Both a bivariate frequency-wise causality measure and its higher-dimensional extension are applied. The main findings are that short-run causality exists between the oil price and variables such as short-term interest rates and the German share price index, while long-run causality is found between the oil price and long-term interest rates. Moreover, the oil price predicts the consumer price index at a high number of different frequencies, while no significant causality is found to run from the oil price to industrial production and the unemployment rate.