The identification of predatory behavior in the presence of uncertainty

Out of the ongoing debate on what constitutes predatory behavior has surfaced the idea that it must entail a sacrifice of profits. The notion is that behavior which sacrifices profits must have an ulterior motive, namely an attempt to induce exit by rivals. This note makes the point that when incumbents must make choices before the resolution of uncertain events, a policy which sacrifices expected profits could be motivated by risk reduction. The issues surrounding the identification of predatory behavior in the presence of uncertainty are discussed, and a definition of predation which allows for uncertainty is presented.     

Export- and Import-Specific Habit Formation

By incorporating good-specific habit formation into the consumption of export and import goods, I examine the dynamic adjustment of a small country to a permanent terms-of-trade deterioration. With differences in the strength of habit formation between export and import goods, the shock affects net output through countervailing income and substitution effects. Unlike in the existing literature, adjacent complementarity is neither necessary nor sufficient for the shock to reduce net foreign assets. When consuming export goods is more habit forming than is consuming import goods, the resulting asymmetric inertia of exports and imports leads the current account to exhibit a J-curve.     

Pricing Options With Curved Boundaries1

This paper provides a general valuation method for the European options whose payoff is restricted by curved boundaries contractually set on the underlying asset price process when it follows the geometric Brownian motion. Our result is based on the generalization of the Levy formula on the Brownian motion by T. W. Anderson in sequential analysis. We give the explicit probability formula that the geometric Brownian motion reaches in an interval at the maturity date without hitting either the lower or the upper curved boundaries. Although the general pricing formulae for options with boundaries are expressed as infinite series in the general case, our numerical study suggests that the convergence of the series is rapid. Our results include the formulae for options with a lower boundary by Merton (1973), for path-dependent options by Goldman, Sossin, and Gatto (1979), and for some corporate securities as special cases.     

Welfare Spending and Poverty: Cutting Back Produces More Poverty, Not Less

The "New Consensus " on welfare expresses the idea that the major problem in social welfare is dependency , not poverty Much of the evidence for this perspective has come from trend line data indicating that over time poverty did not evaporate in the face of increases in social welfare spending Using various measures of the "dependent" poor, the empirical analysis presented suggests that reducing welfare expenditures relative to need does not produce less poverty and dependency     

Child Poverty and Welfare Benefits: A Reassessment with State Data of the Claim That American Welfare Breeds Dependence

Abstract . Several critics of the American welfare system have claimed that it exacerbates the problem of poverty by making living in poverty preferable to acting in ways that would promote upward mobility. One version of this argument, by Gallaway and Vedder, proposes that in the 1970s this resulted in states with high welfare benefit exhibiting increases in child poverty. State data for 1970, 1980, and 1970-1980 are analyzed by means of multiple regression to assess this argument. The results suggest that the relationships between high welfare benefits, child poverty, and recipiency of Aid to Families with Dependent Children (AFDC) are much less clear-cut than has been alleged. They also cast doubt on the wisdom of using aggregate data to analyze these relationships.     

It's No Laffer'Matter: Claim That Increasing Welfare Aid Breeds Poverty and Dependence Fails Statistical Test

Abstract . The claim is analyzed that there is a Laffer-type relationship between welfare spending and poverty. Conservative analysts in recent years have asserted that over the last several decades poverty declined with increased welfare spending up to a point, beyond which increases in spending produced increases in poverty. Measures of pre-transfer and pre-welfare poverty are used in order to account for poverty due to welfare dependency. Employing data for 1959-1983, the authors find evidence which casts doubt on the validity of the hypothesis that there has been a Laffer-type relationship between welfare spending and poverty.     

Guidelines for technical management of chemical process safety

The American Institute for Chemical Engineers formed the Center for Chemical Process Safety (CCPS) in March, 1985, shortly after the Bhopal tragedy. CCPS has published several technical guidelines and has sponsored needed research projects to fill gaps in technology. In addition, CCPS has sponsored several international symposia in the interest of providing forums for the interchange of the latest technology in the prevention of catastrophic events.