An Intraday Examination of the Components of the Bid–Ask Spread

Using transactions data for a sample of NYSE stocks, we decompose the bid–ask spread (BAS) into order–processing (OP) and asymmetric information (AI) components using the techniques of George, Kaul, and Nimalendran (1991) and Madhavan, Richardson, and Roomans (1997). McInish and Wood (1992) demonstrate that the intraday behavior of BASs can be explained by variables measuring activity, competition, risk, and information. We investigate whether these variables explain the behavior of the OP and AI components of the spread over the trading day. We conclude that, on balance, the variables that determine the aggregate BAS also determine its intraday components.     

Bargaining power and enforcement in credit markets

In a credit market with enforcement constraints, we study the effects of a change in the outside options of a potential defaulter on the terms of the credit contract, as well as on borrower payoffs. The results crucially depend on the allocation of “bargaining power” between the borrower and the lender. We prove that there is a crucial threshold of relative weights such that if the borrower has power that exceeds this threshold, her expected utility must go up whenever her outside options come down. But if the borrower has less power than this threshold, her expected payoff must come down with her outside options. In the former case a deterioration in outside options brought about, say, by better enforcement, must create a Lorenz improvement in state-contingent consumption. In particular, borrower consumption rises in all “bad” states in which loans are taken. In the latter case, in contrast, the borrower's consumption must decline, at least for all the bad states. These disparate findings within a single model permit us to interpret existing literature on credit markets in a unified way.     

Governments do Compete for Citizens - in Australia

Michael van Notten suggested in these pages that consumers of national laws should use supranational legislatures to allow themselves to choose between competing suppliers of law. His proposal was greeted as outlandish, if intriguing. But, Australian economist John Ray reveals, it is already happening.     

“Fifty in five”: The prospects for merger in the electric utility industry

By analyzing four case studies of merger attempts between electric utilities, we conclude that there are not strong incentives for a wave of combinations in the industry. Potential synergy gains do not provide a strong motivation since they are likely already being captured through joint ventures and coordination agreements. Those that still exist would most likely be distributed to rate payers by regulatory decisions. Managerial incentives of the bidder are countered by the desire of target management to remain independent. Potential gains to the financial community from a wave of mergers are large, but the regulatory process provides a dampening of this otherwise strong incentive.     

Dimensions and characteristics of time perceptions and perspectives among older consumers

The study of the impact of time as a variable in consumer behavior goes back to at least the early seventies. It has been studied from both objective and subjective perspectives. The purpose of this article is to further explain the impact of subjective time perceptions on consumer behavior, with a focus on the elderly as a subgroup. Several frameworks for understanding time perceptions are discussed and coupled with various theories of aging to present, explain, and hypothesize age-related differences in time perceptions and the behavioral consequences of these differences. The article concludes with an integration of these time frameworks into the five-stage consumer decision-making process, and some suggested impacts on the marketing mix. © 1994 John Wiley & Sons, Inc.     

National policies and local economic initiatives: Evaluating the effectiveness of UK coal and steel closure area re-industrialisation measures

With the collapse that took place in coal, steel and engineering, job creation subsidiaries of certain nationalised industries were set up such as British Coal (Enterprise) Ltd and British Steel Corporation (Industry) Ltd. What have they achieved and what lessons are to be learned?     

Money laundering—a global obstacle

One of the biggest obstacles to maintaining an effective operating international financial system is money laundering. A global phenomenon and international challenge, money laundering is a financial crime that often involves a complex series of transactions and numerous financial institutions across many foreign jurisdictions. In addition, money laundering is also extremely difficult to investigate and prosecute. In this paper, I present a clinical examination of the money laundering process, the international extent of the problem and global efforts to introduce anti-money laundering measures and regulation in recent years.