The effects of resale price maintenance laws on petrol prices and station attrition: empirical evidence from Wisconsin

The state of Wisconsin's Unfair Sales Act prevents the sale of any item below cost in order to attract business, and specifically requires petrol (gasoline) stations to mark up their prices by at least 6% over the wholesale price. While the ostensible reason for this law is to protect small, independent retailers and thus enhance competition, the evidence suggests that the primary result of this law has been to inflate the price of petrol for Wisconsin consumers and facilitate tacit collusion in retail petrol markets. Petrol prices in two major markets in the state are examined, as well as in one market outside of the state where no minimum markup is required. The data show that when the penalties for violating the Unfair Sales Act were strengthened, the average markup of retail petrol over the wholesale price increased significantly in Wisconsin without a commensurate change in the average markup in the market outside of Wisconsin. It is also found that price dispersion is significantly lower over a two-year period in the protected Wisconsin market than in the unprotected markets.     

A CGE analysis of oil price change

As Chinese economy system has been depended more on the import of petroleum with the development of China, the change in the price of international oil have caused concern among economists and policy makers. This paper is to present a financial Computable General Equilibrium (CGE) model of the Chinese economy which integrates real economy and financial sectors, and to apply it to quantitatively evaluate the impacts on Chinese economy caused by international oil price changes. And the model endogenously determines the exchange rate, covering fixed, partially flexible, and completely flexile exchange rate system to consider the effect of foreign oil price changes from the point of view of macro and industrial aspects. Finally, this paper presents concluding remarks.     

A hedonic price analysis of hearing aid technology

In this article, we study how technological components affect the price of hearing aids. The main goals are to determine which functional and technological features have the greatest influence on manufacturer-based prices in the hearing aid industry, and to analyse the price-cost margins at the dispenser level using a unique data set that is compiled from a hearing clinic in West Texas. The result shows that style and signal processing scheme are the two most important determinants of hearing aid price. Other characteristics such as directional microphone, noise cancellation, and a certain shell type are also positively related to price. Further, on average, this particular local dispenser has a markup of about 35% per hearing instrument.     

Revenue ranking of first-price auctions with resale

When the price setter in post-auction resale is chosen according to exogenous probabilities, Hafalir and Krishna (2008) [2] showed that the first-price auction brings more expected revenues than the second-price auction with truth-bidding bidders. We complete their revenue ranking by proving that the first-price auction produces higher expected revenues the higher the probability the auction winner sets the resale price.     

Auctions for social lending: A theoretical analysis

Prosper, today the second largest social lending marketplace with nearly 1.5 million members and $380 million in funded loans, employed an auction mechanism amongst lenders to finance each borrower's loan until 2010. Given that a basic premise of social lending is cheap loans for borrowers, how does the Prosper auction do in terms of the borrower's payment, when lenders are strategic agents with private true interest rates? We first analyze the Prosper auction as a game of complete information and fully characterize its Nash equilibria, and show that the uniform-price Prosper mechanism, while simple, can lead to much larger payments for the borrower than the VCG mechanism. We next compare the Prosper mechanism against the borrower-optimal auction in an incomplete information setting, and conclude by examining the Prosper mechanism when modeled as a dynamic auction, and provide tight bounds on the price for a general class of bidding strategies.     

A theoretical foundation for Constant Market Share analysis

Constant Market Share (CMS) analysis is a popular tool for analyzing changes in exports of a country. Nevertheless, its theoretical foundations (and policy relevance) have been questioned. In this paper, we provide such a foundation by relating CMS analysis to a two-stage homothetic demand model. An indication of the empirical relevance of this relationship is given by comparing the CMS analysis with a two-stage Constant Elasticity of Substitution demand model applied to 1972–1976 data of the Economic and Social Commission for Asia and the Pacific (ESCAP).Paper presented at the XX-th world conference of the Applied Econometric Association in Istanbul, December 1986. The research reported in this paper was carried out as part of the project Disequi-librium and Equilibrium in Demand and Supply, which is approved by the Dutch Office of Education and Sciences. Ivo J. Steyn and Philip A. ten Cate provided excellent research assistance. We thank an anonymous referee for helpful comments.     

The atmospheric carbon resilience problem: A theoretical analysis

We study a dynamic carbon pollution model where carbon accumulates both inside a nonrenewable and a renewable reservoir with a constant regeneration rate. Two primary energy sources are available: a cheap exhaustible fossil fuel (coal) and an expensive clean energy alternative (solar). To avoid catastrophic climate events, the global carbon concentration has to remain below some critical mandated ceiling. We show that there exists an upper bound on the coal endowment that can be consumed, which distinguishes two main cases: coal is initially abundant or scarce. If the energy sector has to provide a constant aggregate energy flow to the final users, cost-effectiveness requires that the global ceiling should be attained only when solar energy is introduced. Then the economy stays forever at the ceiling and coal use is progressively replaced by solar energy use. In the abundant coal case, this energy sources substitution process lasts for an infinite duration while in the scarce coal case, coal exploitation ends in finite time. Under a welfare maximization criterion, if coal is abundant, we show that the economy may follow a sequence of phases at the ceiling and below the ceiling before the final transition towards clean energy.     

Foreign enclaves and economic development: A theoretical analysis

We consider an urban foreign enclave with sector-specific foreign capital in an otherwise mobile-capital Harris-Todaro model. We consider the taxation of foreign capital. A dynamic version of this model is considered. The long-run equilibrium and the comparative steady-state effects are analyzed. We get some interesting effects of reduction in tax rate on foreign capital on the short-run and the long-run equilibrium levels of domestic factor income and national income under some meaningful conditions.     

The atmospheric carbon resilience problem: A theoretical analysis

We study a dynamic carbon pollution model where carbon accumulates both inside a nonrenewable and a renewable reservoir with a constant regeneration rate. Two primary energy sources are available: a cheap exhaustible fossil fuel (coal) and an expensive clean energy alternative (solar). To avoid catastrophic climate events, the global carbon concentration has to remain below some critical mandated ceiling. We show that there exists an upper bound on the coal endowment that can be consumed, which distinguishes two main cases: coal is initially abundant or scarce. If the energy sector has to provide a constant aggregate energy flow to the final users, cost-effectiveness requires that the global ceiling should be attained only when solar energy is introduced. Then the economy stays forever at the ceiling and coal use is progressively replaced by solar energy use. In the abundant coal case, this energy sources substitution process lasts for an infinite duration while in the scarce coal case, coal exploitation ends in finite time. Under a welfare maximization criterion, if coal is abundant, we show that the economy may follow a sequence of phases at the ceiling and below the ceiling before the final transition towards clean energy.     

Inflation,taxes and housing: A theoretical analysis

This paper examines the real effects of inflation under a distortionary tax system. The presence of a tax subsidy to housing substantially alters the effects of inflation on the capital intensity of production and on the market interest rate. The analysis suggests that not taxing the flow of services from housing has caused inflation to reduce capital intensity, thereby decreasing U.S. productivity. Furthermore, this tax subsidy has caused inflation to raise the real interest rate while reducing the after-tax real returns to assets.     

Path dependence of the general price level: A value theoretic analysis

The paper examines path dependence of price indexes, a problem that has become acute after international adoption of chain indexes for price and volume changes in the SNA93. Path dependence is an old issue of index numbers, and has been in the way of using chain indexes ever since their invention. The paper accepts chaining at its start, and tries to develop a sound deflation procedure from there. In this analysis path dependence is less an issue of appropriate formalization of a given concept, the traditional approach in index number theory, but rather a problem of developing an interpretation to a given and now worldwide recommended statistical practice. The key issue is found in the fact that money is not only the standard means of payment, concerning central banks, but also the standard of value in an economy, a feature that bears directly on the compilation of price indexes and national accounts. As a result, a chained weighted index is shown to be path independent, if it is interpreted as a change not of prices, but of the unit of account in which prices are expressed.     

Modelling the dynamics of European carbon futures price: A Zipf analysis

This article investigates the European carbon futures price dynamics by applying the Zipf analysis. The results show that: first, carbon price behaviour is asymmetric, and the long-term bearish probability is greater than the long-term bullish probability. Second, time-scales of investment and speculators' expectations of returns have dual effects on carbon price behaviour. The longer the time-scales of investment, the higher the bearish probability. The lower the expectations of returns, the smaller the distortion of carbon price behaviour. Third, the differences in carbon market cognitions from non-greedy speculators with different expectations of returns mainly lie in the amplitudes and occasions of carbon price fluctuations, rather than in the carbon price fluctuations themselves. Fourth, speculators' expectations of returns have critical points. Once the critical points are reached, they will no longer be able to distort carbon price behaviour. Finally, we discuss some investment advice for supports of the decision-makers. For non-greedy-type speculators, they will choose to hold negatively in the short term and buy and hold in the long term, while for greedy-type speculators they will sell their European Union Allowances (EUAs) in the short term, and buy and hold in the long term. The results are helpful to hedge against unwanted carbon price movements, and to understand the transactions between different types of agents.     

A principal components analysis of the consumer price index 1967–1976

Zusammenfassung In der öffentlichen Diskussion, in der Wirtschaftspolitik und auch in ökonomischen Analysen des inflationären Prozesses wird die jährliche Veränderungsrate des Index der Verbraucherpreise gemeinhin mit der Inflationsrate an sich gleichgesetzt. Aber hinter dem Verbraucherpreisindex steht eine Fülle von Einzelpreisen, deren Entwicklung möglicherweise stark von der Bewegung des gesamten Verbraucherpreisindex abweicht.Die vorliegende Studie untersucht mittels der Methode der prinzipiellen Komponenten in welchem Maße die Preisbewegungen der einzelnen Subindizes voneinander divergieren. Zwei Untergliederungen des Gesamtindex werden unter diesem Gesichtspunkt untersucht; darüberhinaus wird die Methode der prinzipiellen Komponenten auch auf eine feine Gliederung der Gruppe der gewerblichen und industriellen Waren angewandt. Die Ergebnisse zeigen große Unterschiede in der Preisbewegung der einzelnen Subindizes und deuten darauf hin, daß sich die Entwicklung der Verbraucherpreise nicht in einer geringen Zahl von Dimensionen darstellen läßt. Dies gilt auch für die Gruppe der gewerblichen und industriellen Waren, die üblicherweise als relativ homogene Gruppe angesehen wird. Angesichts der großen Vielfalt in der Preisentwicklung empfiehlt es sich daher bei ökonometrischen Analysen Teilindizes des Index der Verbraucherpreise zum Gegenstand der Untersuchung zu machen, wobei insbesondere der Unterschied zwischen preisgeregelten und nicht preisgeregelten Waren und Dienstleistungen zu beachten ist.     

近期股价波动的原因及趋势分析

本文通过对最近几年股票市场现状的分析,并从经济、心理、制度、政治等因素,深层次探讨股票市场价格暴涨暴跌的原因,发现其是股票市场的一般规律和时间特征耦合在一起的结果,演绎的过程在股票市场自身性和外围众因素波动性的博弈中具有短期不可测性和长期趋势性.最后分析如何从制度上理顺股票市场,政策上应对股票市场价格剧烈波动,并对股票市场做简单长期趋势分析.     

Extreme dependence in price transmission analysis

We propose a generalized procedure that combines conventional price transmission analysis with copula-based dynamic tail dependence, to examine price relationships under extreme conditions. This approach is used to examine Ukrainian wheat markets where export restrictions combined with price surges, 2006–2008 and 2010–2012, have contributed to a turbulent market. The results indicate that domestic prices were effectively insulated from world price shocks, but that a ‘rocket and feathers’ price relation held between domestic flour and wheat prices. These asymmetric price co-movements changed with the degree of restrictiveness of the export prohibitions.     

First-price auctions with resale: the case of many bidders

We study first-price auctions with resale when there are many bidders and derive existence and characterization results under the assumption that the winner of the initial auction runs a second-price auction with an optimal reserve price. The fact that symmetrization fails when there are more than two bidders has been observed before, but we also provide the direction: weaker bidders are less likely to win than stronger ones. For a special class of distributions and three bidders, we prove that the bid distributions are more symmetric with resale than without. Numerical simulations suggest that the more bidders there are, the more similar the allocation is to the case without resale, and thus, the more asymmetric the bid distributions are between strong and weak bidders. We also show in an example that the revenue advantage of first-price auctions over second-price auctions is positive, but decreasing in the number of bidders.     

A macrotheoretic analysis of inflation,taxes, and the price of equity

This paper examines the effects of higher inflation on asset prices via the impact on effective tax rates. The problem is addressed in a full macroeconomic context where explicit attention is paid to the government budget constraint. The analysis shows that the magnitude of the inflationary impact on asset prices varies significantly according to the nature of the government's fiscal response to changes in tax revenues generated by more inflation; in particular, by whether increased inflation revenues are met by an equal increase in public expenditures or by commensurate reductions in other tax parameters which keep total revenues constant.     

Tariff change,foreign capital and immiserization: A theoretical analysis

This paper analyzes the possibility that tariff reductions in the presence of foreign capital may be immiserizing. Other impacts of tariff revisions in a Latin America-like context are also discussed.