Economic inefficiency in a revenue setting: the Norwegian whitefish fishery

The main focus in the inefficiency literature is on suboptimal input use and how this causes increased costs, due to technical and allocative inefficiency. Production or cost functions are then typically used to describe the underlying technology of the firm. The possible revenue loss, due to lower than maximum production levels and suboptimal output mix, has received substantially less attention. By using a revenue function to measure inefficiency, the focus, model and estimation technique presented in this article differ from those of previous studies. A shadow revenue model is used to decompose revenue inefficiency into its technical and allocative components, in which the allocative inefficiency is due to a suboptimal output mix. The approach is illustrated using panel data of Norwegian whitefish trawlers. The results reveal large inefficiencies, with respect to output levels as well as output mix, indicating that this can be an important part of the picture when investigating economic inefficiency. To identify the determinants of revenue inefficiency, we conduct a second-step regression, in which technical and allocative inefficiency is regressed upon a set of explanatory variables. The inefficiencies are partly explained by the management system and fleet structure.     

The stock market and investment: another look at the micro-foundations of q theory

This paper introduces a novel distinction between real q andfinancial q. The paper examines three versions of financialq developed by Brainard and Tobin, Minsky and Hayashi, respectively.These theories differ regarding the nature of stock market pricedetermination and their use of marginal productivity theory.It is shown that non-profit maximising behaviour by managersdoes not invalidate q theory. It is also shown that if managersand shareholders have different profit expectations, this leadsto an equilibrium value of q that differs from unity. Lastly,the implicit claims in q theory regarding the efficient roleof stock markets as regulators of capital accumulation are shownto depend on assumptions about stockholder behaviour.     

Between a rock and a soft place: Ecological and feminist economics in policy debates

The field of ecological economics includes both economic analysis on the one hand, and discussions of normative values and visions for society, on the other. Using feminist insights into cultural beliefs about the relative “hardness” and “softness” of these two sides, this essay discusses how ecological economists can use this unique “between” space in order to better inform policy. The current crisis of global climate change, it is argued, requires that economists move beyond modeling and measurement, while ecological thinkers need to re-examine beliefs about markets and profit.     

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.     

Persistent high ambition and substance abuse: a rationalization of a vicious circle

While the current use of some mind-altering substances alleviates current level of depression, it facilitates future depression. Our analysis incorporates this intertemporal tradeoff and shows that the stationary status of a consistently overly ambitious sophisticated user is improved by impatience, and that this improvement is amplified by the ratio of the instantaneous depression-relief effect to the status-degradation effect of the mind-altering substance. The analysis also shows that the existence of a supportive personal community leads to permanent cyclical use of mind-altering substances.      

Estimating demand curve in the Korean VoIP telecommunications market

The VoIP (Voice over Internet Protocol) market in Korea is showing rapid growth since domestic carriers initiated the service in 2006. These carriers are now seeking new revenue sources from various convergence services and are increasing investment into VoIP. In particular, local exchange carriers (LECs), formerly reluctant to invest in technologies that would cannibalize their local telephone revenue, have started to invest in VoIP, in recognition of the current convergence of media and the telecommunications industry, as well as in the face of intensifying competition. In this study, we determined that VoIP call rates and landline telephony call rates were the most important factors affecting VoIP call demand, in addition to network externality. We also verified that landline telephony is no longer a supplement to VoIP, but rather, a substitute that has considerable influence on VoIP call demand. Empirical evidence is expected to be considered in policy decision making on current issues in the IT industry, such as access prices or competitiveness assessment. The current empirical analysis on the Korean VoIP industry and the adherence to lessons learned from policy enforcement should provide valuable information to countries seeking to develop their own VoIP industries, as well as to businesses developing new strategies based on the VoIP market.     

Equilibrium in a Market Game

This paper studies the equilibrium of an exchange economy with the same number of agents and commodities. It is shown that under rather mild conditions on demand the market have a price equilibrium—independently of the divisibility of the commodities. The result extends Gale’s equilibrium theorem for indivisible commodities to the case where some commodities are perfectly divisible. The proof is based on a topological lemma contained in previous paper of one of the authors.     

Revenue comparison in common-value auctions: Two examples

When players' affiliated values are symmetrically distributed, expected revenue in the second-price auction equals or exceeds that in the first-price auction (Milgrom and Weber, 1982). We provide two common-value examples where this ranking fails when players are asymmetrically informed.     

Distribution and drivers of costs in type 2 diabetes mellitus treated with oral hypoglycemic agents: a retrospective claims data analysis

Objective:

To describe the distribution of costs and to identify the drivers of high costs among adult patients with type 2 diabetes mellitus (T2DM) receiving oral hypoglycemic agents.

Methods:

T2DM patients using oral hypoglycemic agents and having HbA1c test data were identified from the Truven MarketScan databases of Commercial and Medicare Supplemental insurance claims (2004–2010). All-cause and diabetes-related annual direct healthcare costs were measured and reported by cost components. The 25% most costly patients in the study sample were defined as high-cost patients. Drivers of high costs were identified in multivariate logistic regressions.

Results:

Total 1-year all-cause costs for the 4104 study patients were $55,599,311 (mean cost per patient?=?$13,548). Diabetes-related costs accounted for 33.8% of all-cause costs (mean cost per patient?=?$4583). Medical service costs accounted for the majority of all-cause and diabetes-related total costs (63.7% and 59.5%, respectively), with a minority of patients incurring >80% of these costs (23.5% and 14.7%, respectively). Within the medical claims, inpatient admission for diabetes-complications was the strongest cost driver for both all-cause (OR?=?13.5, 95% CI?=?8.1–23.6) and diabetes-related costs (OR?=?9.7, 95% CI?=?6.3–15.1), with macrovascular complications accounting for most inpatient admissions. Other cost drivers included heavier hypoglycemic agent use, diabetes complications, and chronic diseases.

Limitations:

The study reports a conservative estimate for the relative share of diabetes-related costs relative to total cost. The findings of this study apply mainly to T2DM patients under 65 years of age.

Conclusions:

Among the T2DM patients receiving oral hypoglycemic agents, 23.5% of patients incurred 80% of the all-cause healthcare costs, with these costs being driven by inpatient admissions, complications of diabetes, and chronic diseases. Interventions targeting inpatient admissions and/or complications of diabetes may contribute to the decrease of the diabetes economic burden.     

Unemployment, credit rationing, and capital accumulation: a tale of two frictions

Summary. This paper develops a model in which two information frictions are embedded into an otherwise conventional neoclassical growth model; an adverse selection problem in the labor market and a costly state verification problem in the credit market. The former allows equilibrium unemployment to arise endogenously while the latter is responsible for equilibrium credit rationing. This structure is used to investigate a theoretical link between the level of unemployment and the extent of credit rationing (and capital formation). The presence of the labor market friction is enough to generate scope for multiple steady state equilibria. The model also generates a large class of endogenous cyclical and chaotic dynamical equilibria. Development trap phenomena may also appear. Received: April 10, 1998; revised version: May 20, 1998     

Testing Goodwin: growth cycles in ten OECD countries

Following Desai (Desai, M. 1984. An econometric model of theshare of wages in national income: UK 1855-1965, pp. 253-77in Goodwin, R. M. et al. (eds), Nonlinear Models of FluctuatingGrowth, Berlin, Springer), Goodwin's simple 'predator-prey'growth cycle model of the economy (Goodwin, R. M. 1967. A growthcycle, pp. 54-8 in Feinstein, C. H. (ed), Socialism, Capitalism,and Economic Growth, Cambridge, Cambridge University Press;reprinted in Goodwin, R. M. 1982. Essays in Economic Dynamics,Basingstoke, Macmillan, pp. 165-70) is tested, using post-wardata for ten OECD countries - Australia, Canada, Finland, France,Germany, Greece, Italy, Norway, the UK and the US. At a quantitativelevel, Goodwin's model is found not to be adequate: (i) estimatedparameter values poorly predict the cycles' centres; and (ii)Goodwin's restrictive assumptions are not justified. However,at a qualitative level, the evidence presented here for theexistence of Goodwin-type cycles is extremely encouraging, justifyingboth existing theoretical extensions of Goodwin's model andfurther empirical work in this area.     

Geographic price dispersion in retail markets: Evidence from micro-data

Using an extensive micro-price data of 266 retail goods and services across US, EU and OECD cities between 1990 and 2005, we study characteristics of geographic dispersion of deviations from the Law of One Price. We find that the magnitude of price dispersion is a function of the characteristics of both the type of good and set of locations under examination. Higher share of non-traded inputs and lower tradability of goods are both found to contribute to geographic price dispersion, with the former typically dominating in explanatory power. The role of tradability of good in accounting for the price dispersion is more significant as we move beyond an economic geography, while non-traded input level matters relatively more if we move to the interior of this geography. Our evidence suggests that the models of real exchange rates should incorporate the classical distinction between traded inputs and local inputs as well as a role for relative markups and traditional trade costs.     

Application of analytic hierarchy process-based model of Ratio of Comprehensive Cost to Comprehensive Profit (RCCCP) in pest management

After investigation and analysis of the practice of pesticide application in the protected horticultural fields of the Agricultural Experimental Zone in Pudong district, Shanghai, China, analytic hierarchy process (AHP) was applied to evaluate 5 alternative pest-control strategies (including three gray insect-proof net rooms (with mesh) of different height, white insect-proof thin film rooms (without mesh) and normal control and prevention areas (without any covering nets or thin films)). Comprehensive Profit (CP) and Comprehensive Cost (CC) were used in this paper to analyze the superiority of different strategies in protected horticultural fields for pest management. CP and CC of the pest-control strategies were used as the targets of AHP, in which CP was classified into economic, social and ecological profit, while CC was split into economic, social and ecological cost. Ratio of Comprehensive Cost to Comprehensive Profit (RCCCP) was calculated by dividing Comprehensive Cost (CC) by Comprehensive Profits (CP). According to the analysis, the best strategy was to apply gray insect-proof net rooms of 2.2 m high and 360 (12 m × 30 m) square meters in protected horticultural fields for pest management.     

Strong equilibrium in cost sharing connection games

We study network games in which each player wishes to connect his source and sink, and the cost of each edge is shared among its users either equally (in Fair Connection Games—FCG's) or arbitrarily (in General Connection Games—GCG's). We study the existence and quality of strong equilibria (SE)—strategy profiles from which no coalition can improve the cost of each of its members—in these settings. We show that SE always exist in the following games: (1) Single source and sink FCG's and GCG's. (2) Single source multiple sinks FCG's and GCG's on series parallel graphs. (3) Multi source and sink FCG's on extension parallel graphs. As for the quality of the SE, in any FCG with n players, the cost of any SE is bounded by H(n) (i.e., the harmonic sum), contrasted with the Θ(n) price of anarchy. For any GCG, any SE is optimal.     

Marketing an upgrade to a system: compatibility choice as a price discrimination device

This paper analyzes the different ways in which an innovator can market an upgrade for a basic system when the market for this system is mature and there are two different technological platforms: the innovator’s and a rival’s. Different compatibility choices result in different product lines and yield varying price discrimination opportunities. The paper studies what are the limits to the enforcement of these opportunities and concludes by showing what is the profit maximizing product line choice when consumers are brand loyal. This choice depends on the initial market share of the innovator and on the enhancement of quality that the upgrade provides.     

Ipilimumab in 2nd line treatment of patients with advanced melanoma: a cost-effectiveness analysis

Abstract

Objective:

To estimate the cost-effectiveness of ipilimumab (3?mg/kg) compared with best supportive care (BSC) in pre-treated advanced melanoma patients.     

Price discrimination and price dispersion in a duopoly

This paper analyses the problem of price discrimination in a market where consumers have heterogeneous preferences both over a horizontal parameter (brand) and a vertical one (quality). Discriminatory contracts are characterized for different market structures. It is shown that price dispersion, i.e. the observed range of prices for each class of customers, increases almost everywhere as competition is introduced in the market.     

物价稳定与房价：货币政策视角

住房价格变化是货币政策需要关注的重要指标。本文在梳理现有文献的基础上,研究了物价稳定与房价变动的关系,发现房价是物价变动的重要原因,而M1和贷款利率是房价变动的格兰杰原因。通过进一步建立结构性VAR模型,我们发现房价受到贷款利率影响最大,而物价受到货币供应量的影响最大。针对房价与物价变动的三个场景可以采取不同的货币政策操作：1、房价过快增长,物价保持稳定。此时为了避免房价对未来物价的冲击,又不影响到当前物价的稳定,可以提高贷款利率,并保持相对宽松的货币供给以对冲房价下跌对物价的不利影响,达到抑制房价而不影响物价的效果。2、房价和物价双双过快增长。此时,应调整贷款利率、准备金率和货币供应量,三管齐下加以治理。3、物价过快增长,而房价较为稳定。为了避免打压房价,可以不调整贷款利率、准备金率,仅控制货币供应量。     

Leaving EMU: a real options perspective

The real option implicit in a country's decision of whether to leave an existing monetary union when there is uncertainty over the future benefits of this move is examined. The theoretical model used is calibrated for the current Euro-12 area by proxying policymakers’ inflation preferences with unemployment rates and debt-to-GDP ratios. A robust group of countries is observed that would choose to remain within EMU consisting of Belgium, Finland, Greece and Italy; France and Spain loosely also belong to this core. Only Luxembourg would robustly want to leave EMU; Ireland and The Netherlands, however, complement that core closely.