Calling circles: network competition with nonuniform calling patterns

We introduce a flexible model of telecommunications network competition with nonuniform calling patterns, accounting for the fact that customers tend to make most calls to a small set of similar people. Equilibrium call prices are distorted away from marginal cost, and competitive intensity is affected by the concentration of calling patterns. Contrary to previous predictions, jointly profit‐maximizing access charges are set above termination cost in order to dampen competition if calling patterns are sufficiently concentrated. We discuss implications for regulating access charges as well as on‐ and off‐net price discrimination.     

Decentralised bargaining of working time in the German automotive industry

The article addresses the question whether or not the trend towards the decentralisation of collective bargaining on working time in Germany entails a loss in the binding power of industry‐level agreements. To this end, both working‐time agreements and practices are examined at the firm or establishment level in the automotive industry. Additionally, the article examines the extent to which workplace micro‐level changes are reflected in official statistics. The findings indicate that unions and works councils have taken on new roles preventing a widespread erosion of collective regulations.     

Strategic Trade Policy and Vertical Structure

We introduce intermediaries into the Brander-Spencer model of strategic trade policy. A key finding is that in regimes involving independent retailers, output competition and linear pricing (and two-part tariffs under certain restrictions), the optimal policy involves an export tax instead of a subsidy. If firms commit to vertical structure before governments commit to policy then under output competition firms choose integration, whereas if policy precedes structure then at least one firm chooses separation. Under price competition separation is a dominant strategy regardless of whether the structure decision is made before or after the policy decision.     

Public good provision and the Smith Process

An existing public good provision mechanism known as the Smith Process (SP) is extended to allow for non-zero fixed cost, non-constant marginal cost and imperfectly divisible output. Two versions of SP are considered: unrestricted (USP) and restricted with a unanimity rule (RSPU). USP implements efficient choice provided the gap between marginal and average cost is sufficiently low. RSPU relaxes the conditions for efficient implementation but increases the set of equilibria involving inefficient choice. Furthermore, if weakly dominated strategies are eliminated, then non-provision is no longer an equilibrium under RSPU but continues to be one under USP.     

On the cultural basis of gender differences in negotiation

We study how culture and social structure influence bargaining behavior across gender, by exploring the negotiation culture in matrilineal and patriarchal societies using data from a laboratory experiment and a natural field experiment. One interesting result is that in both the actual marketplace and in the laboratory bargaining game, women in the matrilineal society earn more than men, at odds with years of evidence observed in the western world. We find that this result is critically driven by which side of the market the person is occupying: female (male) sellers in the matrilineal (patriarchal) society extract more of the bargaining surplus than male (female) sellers. In the buyer role, however, we observe no significant differences across societies.     

Job insecurity,employability and health: an analysis for Germany across generations

In this article, we use 12 waves of the German Socio-Economic Panel (GSOEP) to examine the relationship between job insecurity, employability and health-related well-being. Our results indicate that being unemployed has a strong negative effect on life satisfaction and health. They also, however, highlight the fact that this effect is most prominent among individuals over the age of 40. A second observation is that job insecurity is also associated with lower levels of life satisfaction and health, and this association is quite strong. This negative effect of job insecurity is, in many cases, exacerbated by poor employability.     

Cost-effectiveness analysis of secukinumab in ankylosing spondylitis from the Canadian perspective

Aim: To assess the cost-effectiveness of interleukin (IL)-17A inhibitor secukinumab vs the currently licensed biologic therapies in ankylosing spondylitis (AS) patients from a Canadian healthcare system perspective.

Methods: A decision analytic model (semi-Markov) evaluated the cost-effectiveness of secukinumab 150?mg compared to certolizumab pegol, adalimumab, golimumab, etanercept and etanercept biosimilar, and infliximab and infliximab biosimilar in a biologic-naïve population, over 60 years of time horizon (lifetime). The Bath Ankylosing Spondylitis Disease Activity Index (BASDAI 50) response rate was used to assess treatment response at week 12. Non-responders or patients discontinuing initial-line of biologic therapy were allowed to switch to subsequent-line biologics. Model input parameters (short-term and long-term changes in BASDAI and Bath Ankylosing Spondylitis Functional Index [BASFI], withdrawal rates, adverse events, costs, resource use, utilities, and disutilities) were obtained from clinical trials, published literature, and other Canadian sources. Benefits were expressed as quality-adjusted life years (QALYs). Cost and benefits were discounted with an annual discount rate of 1.5% for all treatments.

Results: In the biologic-naïve population, secukinumab 150?mg dominated all comparators, as patients treated with secukinumab 150?mg achieved the highest QALYs (16.46) at the lowest cost (CAD 533,010) over a lifetime horizon vs comparators. In the deterministic sensitivity analysis, results were most sensitive to changes in baseline BASFI non-responders, BASDAI 50 at 3 months and discount rates. Probabilistic sensitivity analysis showed that secukinumab 150?mg demonstrated higher probability of achieving maximum net monetary benefit vs all comparators at various cost thresholds.

Conclusions: This analysis demonstrates that secukinumab 150?mg is the most cost-effective treatment option for biologic-naïve AS patients compared to certolizumab pegol, adalimumab, golimumab, etanercept and etanercept biosimilar, and infliximab and infliximab biosimilar for a lifetime horizon in Canada. Treatment with secukinumab translates into substantial benefits for patients and the healthcare system.     

The integrated impact of credit and interest rate risk on banks: A dynamic framework and stress testing application

Credit and interest rate risk are the two most important risks faced by commercial banks in their banking book. In this paper we derive a consistent and comprehensive framework to measure the integrated impact of both risks. By taking account of the repricing characteristics of assets, liabilities and off balance sheet items, we assess the integrated impact of credit and interest rate risk on banks’ economic value and capital adequacy. We then stress test a hypothetical but realistic bank using our framework and show that it is fundamental to measure the impact of credit and interest rate risk jointly.     

Determinants of smallholder farmers' participation in banana markets in Central Africa: the role of transaction costs

A bivariate probit model was employed to jointly and separately estimate banana market participation decisions of buying and selling households in Rwanda and Burundi using household survey data. Selectivity bias was corrected for estimating the transacted volumes using Heckman's procedure. The results showed that transaction cost‐related factors such as geographical location of households, market information sources, and travel time to the nearest urban center influence market participation. Non‐price‐related factors such as security of land tenure, labor availability, off‐farm income, gender of the household head, and years of farming experience had a significant influence on the transacted volumes. Output prices had a significant correlation with sales volume, indicating price incentives increased supply by sellers. Generally, the findings suggest that policies aimed at investments in rural road infrastructure, market information systems, collective marketing, and value addition of banana products may provide a potential avenue for mitigating transaction costs and enhancing market participation and production of marketed surplus by rural households.