Strategic Interaction and Trade Policymaking: Formal Analysis and Simulation

This paper introduces a simple game‐theoretic model and a Monte Carlo simulation of trade negotiations with the aim of identifying the nature of the selection bias that may threaten valid inference from empirical tests relying on data from trade disputes. Insights from the formal model are used to critically engage recent empirical analyses. This model is applied more specifically to the American use of Section 301 as an instrument to prise open foreign markets. The results of the game‐theoretical model and the Monte Carlo simulation demonstrate that, despite significant statistical results, models of trade negotiations might potentially suffer from misspecification due to non‐random selection effects.     

The role of financial sector competition for monetary policy

Abstract In this paper, we examine the impact of competition in the banking industry on financial market activity. In particular, we explore this issue in a setting where banks simultaneously insure individuals against liquidity risk and offer loans to promote intertemporal consumption smoothing. In addition, spatial separation and private information generate a transactions role for money. Interestingly, we demonstrate that the industrial organization of the financial system bears significant implications for the effects of monetary policy. Under perfect competition, higher rates of money growth lead to lower interest rates and a higher volume of lending activity. In contrast, in a monopoly banking sector, money growth restricts the availability of funds and raises the cost of borrowing.     

Product quality and competition: evidence from the broadband industry

Access to high-quality broadband internet is important in many different respects such as in communication, education, commerce and information acquisition. We investigate the relationship between the number of broadband providers in an area and the quality of broadband service provided where download speed is used as a proxy for quality. We find that increased competition in an area positively affects the access to fast download speeds. This finding is robust to three different top download speeds tested. Additionally, a theoretical model is provided which shows that competition can decrease the profits associated with offering slow speeds; this gives an incentive for providers to offer higher speeds as a way to increase profits.     

债务危机难撼迪拜金融中心地位

【美国《商业周刊》12月2日】在迪拜政府在11月底宣布国有控股投资公司迪拜世界寻求对近260亿美元债务进行重组后,全球股市应声暴跌。虽然海外股市随后迅速反弹,但迪拜股市惨遭重创,而且迪拜领导人信誉扫地。然而,     

Digital distribution and the prohibition of resale markets for information goods

An existing theoretical literature finds that frictionless resale markets cannot reduce profits of monopolist producers of perfectly durable goods. This paper starts by presenting logical arguments suggesting this finding does not hold for goods consumers tire of with use, implying the impact of resale is an empirical question. The empirical impact is then estimated in the market for video games, one of many markets in which producers may soon legally prevent resale by distributing their products digitally as downloads or streamed rentals. Estimation proceeds in two steps. First, demand parameters are estimated using a dynamic discrete choice model in a market with allowed resale, using data on new sales and used trade-ins. Then, using these parameter estimates, prices, profits, and consumer welfare are simulated under counterfactual environments. When resale is allowed, firms are unable to prevent their goods from selling for low prices in later periods. The ability to do so by restricting resale outright yields significant profit increases. Renting, however, does not raise profits as much due to a revenue extraction problem.