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.     

Estimating market power using a composed error model

We present a maximum likelihood based composed error model to estimate market powers of firms. In our model, the stochastic part of the supply relation includes two random components: the conventional two‐sided error term and a random term, which is capturing firm‐specific conducts. Moreover, we provide a generalization of scaled Stevenson stochastic frontier model in the context of doubly truncated normal distributions. We estimate the market powers of Chicago based airlines as an empirical example that is showing the applicability of our estimation procedure.     

Estimating the market value of Steve Jobs using an event study

Using an event study approach, we seek to estimate the value investors placed on Steve Jobs by investigating the stock market reactions to his death. In the three-day window surrounding his death, the estimated cumulative abnormal returns are ?5.76%. Given the market capitalization of Apple at the time, it can be inferred that investors valued Steve Jobs at 20 billion dollars. While tragic, the news about Jobs’ death is greeted favourably by Apple’s competitors. The competitors appear to be convinced that, without Steve Jobs, they can compete with Apple better.     

Product diffusion and pricing with market frictions

Summary. We study pricing and product diffusion in a dynamic general equilibrium framework with product market frictions. Ongoing R&D activity leads, with an endogenously determined probability, to continual improvements in product quality. We characterize the steady-state equilibrium with endogenous product diffusion in which a number of different goods co-exist on the quality ladder. We show that the severity of the economy's market frictions is a crucial determinant of the pricing structure, the product diffusion pattern, the level of R&D investment, the rate of endogenous growth, the length of Schumpeterian product cycles and the possibility of multiple growth paths. Eliminating market frictions leads to a degenerate product ladder of precisely one step, containing only the most recent product, as in the monopolistic competition literature. Received: August 16, 1999; revised version: March 6, 2001     

Estimating the market value of collegiate football players from professional factor shares

Although the level and growth of revenue in college football has drawn increasing public attention, reliable estimates of the value of college and associated rents remain elusive. Many players do not have easily observable performance statistics and there are significant complementarities. Using a simple estimation strategy based on professional factor shares and rooted in economic theory, we generate estimates of market value for college players across seven National Collegiate Athletic Association conferences using professional football and basketball salaries from 2011 to 2013 as shadow prices. With this method, market value of an average starting football player in a Bowl Championship Series (BCS) conference ranges from $120,000 to $1.7 million per year. The value of superstar players may exceed $4 million per year. We find that rents can flow from the institutions to players in some cases at relatively low-revenue institutions outside the BCS.     

Investigation of the effect of secondary market on the diffusion of innovation

In the high-tech product market, the number of hungry adopters, a new type of early adopters who buy new products and sell them soon in the on- or off-line secondary market to seek for the other new products, has been increasing due to the short product life cycle of high-tech products and the low transaction cost on the Internet. This new phenomenon means that it is inappropriate to consider customers only in the primary market as total adopters in innovation diffusion modeling, since purchasers in the secondary market also have a word-of-mouth effect on the remaining non-adopters. To explain this new phenomenon, we modify the basic Bass diffusion model by incorporating the effect of the secondary market and conduct an empirical analysis. As a result, we conclude that the basic Bass model is likely to overestimate sales volume and tends to forecast lagged peak time when there is an effect from the secondary market. This means that applying a diffusion model to high-tech products without considering the secondary market effect would provide an inaccurate market forecast.     

Inter-firm knowledge diffusion, market power, and welfare

We propose an infinite-horizon quantity-setting differential game with learning spillovers and organizational forgetting to analyze the optimal management decisions affecting the evolution of the stock of know-how, and, in turn, the dynamics of productive efficiency. Specifically, we study the long run impact of inter-firm knowledge diffusion on market power, i.e. the ability of a firm to raise the price above the marginal cost, and welfare. We consider two types of processes through which knowledge is acquired: (i) passive learning, or learning-by-doing, where managers do not actively invest in information and (ii) active learning, or learning-by-investing, where managers acquire new and additional information through specific investments in human capital. We show that: under (i), knowledge diffusion reduces market power; under (ii), knowledge diffusion reduces market power as long as learning spillovers are sufficiently important. From a welfare viewpoint, we also show that: under (i), knowledge diffusion is always welfare-enhancing; under (ii), weak spillovers are required in order for knowledge diffusion to be welfare-enhancing.     

Estimating labour market transitions and continuations using repeated cross sectional data

This paper proposes a population cohort approach for estimating labour market continuations (or transitions) using repeated cross sectional data. This approach allows for the construction of consistent standard errors that account for the full variability of cross sectional data.     

Demographic processes in a model of innovation diffusion with dynamic market

In this paper we study a binomial innovation diffusion model for a variable size market by modelling the demographic process of entrance-exit from each market compartment. We examine from a theoretical point of view the effect of the simultaneous presence of economic and demographic parameters under the exponential market growth hypothesis, by presenting some general results on the adoptions and sales time path. We also enlighten the relevance of considering these variables in relative terms and show how, in presence of a dynamic, the diffusion process never saturates the market. Finally, we test our model on a data set for cellular phones market in different countries.     

Estimating bilateral exposures in the German interbank market: Is there a danger of contagion?

Credit risk associated with interbank lending may lead to domino effects, where the failure of one bank results in the failure of other banks not directly affected by the initial shock. Recent work in economic theory shows that this risk of contagion depends on the precise pattern of interbank linkages. We use balance sheet information to estimate a matrix of bilateral credit relationships for the German banking system and test whether the breakdown of a single bank can lead to contagion. We find that in the absence of a safety net, there is considerable scope for contagion that could affect a large proportion of the banking system. The financial safety net (in this case institutional guarantees for saving banks and cooperative banks) considerably reduces—but does not eliminate—the danger of contagion. Even so, the failure of a single bank could lead to the breakdown of up to 15% of the banking system in terms of assets.     

Estimating monetary policy reaction functions for emerging market economies: The case of Brazil

The paper investigates monetary policy in Brazil following a shift to a floating exchange rate alongside inflation targeting adoption. The benchmark reaction function reveals that the Central Bank behaves according to the Taylor principle by raising the overnight Selic policy interest rate more than the amount by which expected inflation exceeds the target. The investigation also considers a data-rich environment via an excess policy response containing information from a panel of 45 economic time series. The excess policy response carries a positive and significant coefficient in the reaction function including only an inflation gap variable.     

Labor market integration policies and the convergence of regions: the role of skills and technology diffusion

We study the role of different labor market integration policies on economic performance and convergence of two distinct regions in an agent-based model. Production is characterized by a complementarity between the quality of the capital stock and the specific skills of workers using the capital stock. Hence, productivity changes in a region are influenced both by the investment of local firms in high quality capital goods and by the evolution of the specific skill distribution of workers employed in the region. We show that various labor market integration policies yield, via differing regional worker flows, to distinct regional distributions of specific skills. Through this mechanism, relative regional prices are affected, determining the shares that the regions can capture from overall consumption good demand. There occurs a trade-off between aggregate output and convergence of regions with closed labor markets resulting in relatively high convergence but low output, and more integrated labor markets yielding higher output but lower convergence. Furthermore, results differ substantially in several respects as distinct labor market opening policies are applied.     

Estimating exchange rate dynamics with diffusion processes: an application to Greek EMU data

Recently various exchange rate models capturing the dynamics during the transition from an exchange rate arrangement of floating rates into a currency union have been derived. Technically, these stochastic equilibrium models are diffusion processes which have to be estimated by discretely sampled observations. Using daily exchange rate data prior to the Greek EMU-entrance on 1 January 2001, we develop a rigorous estimation procedure. Our estimates point to an increasing interventionist economic policy in the run-up to the Greek EMU entrance. A comparison of this econometric indication with policy information provided (ex-post) by the Bank of Greece (BoG) in its Annual Report 2000 reveals that the BoG indeed pursued such an active policy stance (so-called institutional frontloading strategies).      

Modelling a dynamic market potential: A class of automata networks for diffusion of innovations

Innovation diffusion processes are generally described at aggregate level with models like the Bass Model (BM) and the Generalized Bass Model (GBM). However, the recognized importance of communication channels between agents has recently suggested the use of agent-based models, like Cellular Automata. We argue that an adoption or purchase process is nested in a communication network that evolves dynamically and indirectly generates a latent non-constant market potential affecting the adoption phase.Using Cellular Automata we propose a two-stage model of an innovation diffusion process. First we describe a communication network, an Automata Network, necessary for the “awareness” of an innovation. Then, we model a nested process depicting the proper purchase dynamics. Through a mean field approximation we propose a continuous representation of the discrete time equations derived by our nested two-stage model. This constitutes a special non-autonomous Riccati equation, not yet described in well-known international catalogues. The main results refer to the closed form solution that includes a general dynamic market potential and to the corresponding statistical analysis for identification and inference. We discuss an application to the diffusion of a new pharmaceutical drug.     

处在变革当中的韩国劳务市场

上世纪90年代以前,韩国不仅是世界上实力雄厚的国际工程承包商的国家,而且也是最大的劳务输出国之一。然而,随着经济的发展,韩国目前实际上已由劳务输出国成为部分行业劳动力短缺的国家。劳动力缺失严重已经成为困扰韩国中小企业发展的瓶颈据韩国统计厅公布的一份资料显示:2002     

Stock market and investment: the signalling role of the market

The evidence in this paper suggests that the q-theory of investment is not adequate to explain capital expenditure decisions at the firm level. Managerial as well as market perception is important, with the former more critical than the latter. The results also suggest that stock market activity has only limited implications for the resource allocation process in the economy. The evidence for the q-theory, based on firm-level data, confirms the previous finding in the literature that the poor empirical performance of the model in the past has been due in part to the use of aggregate data at the economy level. These findings have important implications for the debate in the literature regarding the relationship between shareholder myopia and managerial myopia. There is a notion in the literature that the stock market puts too much pressure on managers, who in turn indulge in myopic behaviour by underinvesting for the long-term, especially by way of R and D expenditures. The results presented here suggest that, given the limited role that market perception elements play in the determination of capital expenditures at the firm-level, shareholder myopia is unlikely to lead to managerial myopia.     

城乡市场的分割和统一

建设新农村需要内生的持久的机制。城乡市场分割是我国新农村目标得以实现的根本性障碍，农民无法平等参与市场活动导致城乡收入差距不断扩大。因此，新农村建设的内生机制最为根本的是市场制度创新。创新的市场制度的基本功能能够有效地克服要素流动的障碍，并能在等价交换的基础上保障农民收益。     

我国期货市场亟需期货投资基金

我国期货行业自进入21世纪以来取得了飞速发展,无论品种规模还是成交量都已位居世界前列,然而,在国外已经成为期货市场主力的期货投资基金在我国却难觅其踪。期货投资基金可以优化和改善投资组合,规避股市系统性风险,实现专家理财保护中小投资者利益。实际上,从市场规模、运作现状、风险控制、资金充裕度以及证券投资基金在我国发展的成功经验来看,我国已基本具备设立期货投资基金的基础。但期货投资基金毕竟是一个高风险的投资工具,国内对它的研究还比较薄弱,法律体系和监管机制仍待完善,产品的种类和活跃程度仍待加强,在基金公司的设立方式上仍需谨慎选择,对于期货投资基金亟需的高端综合型人才的培养都是我国急需解决的问题。     

The implications of diffusion models for accelerating the diffusion of innovation

This paper explores the implications of a simple, yet robust model of innovation diffusion for developing insight into the problem of controlling the rate of new product diffusion. Some basic, theoretical results are developed using a simple model. Those results are shown to relate to optimal policies developed from a more complex model of innovation diffusion, developed for the Department of Energy's photovoltaic program.     

Cointegration for market forecast in the Spanish stock market

This study is interested in empirically testing the existence of a long-run relationship between the Spanish stock market and its fundamentals, and in checking to which extent this relationship helps in forecasting. This study is concerned with the behaviour of the aggregate Madrid Stock Exchange in a macroeconomic context. It also identifies as macroeconomic fundamentals: industrial production as a proxy for real activity, inflation and interest rates. This study tests the existence of cointegration by Johansen's procedure. The long-run relationships among the variables implied by the existence of cointegration do not allow inference to the interrelations among the variables. To get some insight into the short-run interactions among the variables, an impulse response analysis was performed. This study compares the forecasting ability of its model with respect to alternative multivariate specifications in terms of RMSE. Also measured is the value of the forecast for the financial agents assessing the extent to which it helps improve asset allocation.