Competitiveness and Subsidy or Tax Policy for New Technology Adoption in Duopoly

We consider a problem of subsidy or tax policy for new technology adoption by duopolistic firms. The technology is developed in and transferred by a foreign country to the domestic country. It is free but each firm must expend some fixed set-up cost for education of its staff to adopt and use it. Assuming that each firm maximizes the weighted average of absolute and relative profits, we examine the relationship between competitiveness and subsidy or tax policies for technology adoption, and show that when firm behavior is not competitive (the weight on the relative profit is small), the optimal policy of the government may be taxation; when firm behavior is competitive (the weight on the relative profit is large), the optimal policy is subsidization or inaction and not taxation. However, if firm behavior is extremely competitive (close to perfect competition), taxation case re-emerges.     

A direct solution method for pricing options involving the maximum process

One often encounters options involving not only the stock price, but also its running maximum. We provide, in a fairly general setting, explicit solutions for optimal stopping problems concerned with a diffusion process and its running maximum. Our approach is to use excursion theory for Markov processes and rewrite the original two-dimensional problem as an infinite number of one-dimensional ones. Our method is rather direct without presupposing the existence of an optimal threshold or imposing a smooth-fit condition. We present a systematic solution method by illustrating it through classical and new examples.     

The estimation of monetary policy reaction function in a data-rich environment: The case of Japan

This paper reports the estimates of a monetary policy reaction function for the Bank of Japan in a data-rich environment. There are two main findings. First, a weak identification problem arises in the estimates under the specifications that some previous works employ, though in a data-rich environment it may be possible to avoid this problem. Second, the evidence from the estimates in a data-rich environment suggests that the Bank of Japan only controlled the inflation forecast, and placed no weight on output stabilization directly over the period from November 1988 through February 2001.     

A Taxi Zoning Analysis Using Large-Scale Probe Data: A Case Study for Metropolitan Bangkok

Taxis are considered one of the most convenient means of transportation, especially when people have to travel off-route, where public transportation is not a feasible option, and also when they need to reach a destination according to what is most convenient for them. However, many issues exist about taxi services, such as the problems of passengers who are unable to get taxi service at the location of their choice, or problems concerning when they need the taxi service to arrive. These problems may be due to the unavailability of the taxi at that particular location or due to the taxi driver not wanting to provide service. A taxi driver may not want to provide service to a potential passenger, because they may have preferences on the direction and areas they want to go or because of the different types of service zoning. Understanding the behaviors of taxi drivers and the characteristics of the trip/travel might be helpful to solving such issues. In this study, we conducted an analysis from a questionnaire survey and large-scale taxi probe data to understand taxi service behavior, travel characteristics, and to discover taxi service zoning characteristics. As a result, four types of taxi service zones including isolated zones, interactive zones, special service zones, and target zones were encountered. Travel characteristics were calculated and analyzed at different criteria, such as weekdays, weekends, and various time windows in a single day. The result of these characteristics was explained according to their similarities and dissimilarities in each type of zone. The discovery of the different zones and their respective definitions might be a good initiative for further development of a policy for taxi drivers to provide better service for passengers.