Price Dispersion Over the Business Cycle: Evidence from the Airline Industry

This study provides empirical evidence documenting how price dispersion moves with the business cycle in the airline industry. Performing a fixed‐effects panel analysis on seventeen years of data covering two business cycles, we find that price dispersion is highly pro‐cyclical. This effect is especially pronounced for legacy carriers relative to low‐cost carriers. We show that our empirical result is consistent with firms' implementing second‐degree price‐discrimination tactics.     

Learning and Equilibrium Selection in a Monetary Overlapping Generations Model with Sticky Prices

We study adaptive learning in a monetary overlapping generations model with sticky prices and monopolistic competition for the case where learning agents observe current endogenous variables. Observability of current variables is essential for informational consistency of the learning setup with the model setup but generates multiple temporary equilibria when prices are flexible and prevents a straightforward construction of the learning dynamics. Sticky prices overcome this problem by avoiding simultaneity between prices and price expectations. Adaptive learning then robustly selects the determinate (monetary) steady state independent from the degree of imperfect competition. The indeterminate (non-monetary) steady state and non-stationary equilibria are never stable. Stability in a deterministic version of the model may differ because perfect foresight equilibria can be the limit of restricted perceptions equilibria of the stochastic economy with vanishing noise and thereby inherit different stability properties. This discontinuity at the zero variance of shocks suggests one should analyse learning in stochastic models.     

Do Firms Use Derivatives to Reduce their Dependence on External Capital Markets?

This study investigates if the use of derivatives by corporations is likelyto affect their financing strategies. I find a strong positive relationbetween the minimum revenue guaranteed by hedging and investmentexpenditures. This result implies that hedging increases the likelihood thatinvestments can be financed internally. I also find that firms tend tofinance their investment expenditures externally rather than internally. Ifexternal capital is more costly than internal capital it would clearly be ina firm's interest to reduce its dependence on external capital. Consistentwith this result, I find that the median firm that does not hedge finances100% of its investment expenditures externally, while the median firm thathedges finances only 86% of investments externally.     

Market allocation of indivisible goods

The existence of equitable allocations of divisible goods is established. The methods used give divisions of a good into geometrically simple sets, such as simplexes or polyhedral convex cones. This economic problem is solved by applying David Gale's covering lemma. An extension of Gale's lemma and its dual versions are established; the proofs are based on Ky Fan's fundamental theorem on coincidence of two set-valued functions.     

Sustainability, Epistemology, Ecocentric Business, and Marketing Strategy: Ideology, Reality, and Vision

This conceptual article examines the relationship between marketing and sustainability through the dual lenses of anthropocentric and ecocentric epistemology. Using the current anthropocentric epistemology and its associated dominant social paradigm, corporate ecological sustainability in commercial practice and business school research and teaching is difficult to achieve. However, adopting an ecocentric epistemology enables the development of an alternative business and marketing approach that places equal importance on nature, the planet, and ecological sustainability as the source of human and other species’ well-being, as well as the source of all products and services. This article examines ecocentric, transformational business, and marketing strategies epistemologically, conceptually and practically and thereby proposes six ecocentric, transformational, strategic marketing universal premises as part of a vision of and solution to current global un-sustainability. Finally, this article outlines several opportunities for management practice and further research.