Price behavior in tight oligopoly

The study examines price behavior in tight oligopoly. The investigation proceeds from the premise that tacit cooperation is the rational response of firms comprising tight oligopoly. The study’s thesis is that cooperative conduct in tight oligopoly will reflect one of two general pricing patterns: (1) shared monopoly pricing, or (2) mark-up pricing. A unique empirical test of this dual price hypotheses is developed. The test focuses on the nature of price responses to cost and demand changes as reflected in a price equation that is estimated for each of fifty four-digit SIC industries. The study’s results indicate infrequent, but still notable, instances of shared monopoly pricing. More common is evidence of mark-up pricing, a general category within which demand proved to be significant in roughly half of the industries examined. Theoretical implications of these findings are discussed.     

How behavioural science can improve financial advice services

Evidence from the behavioural sciences, notably economics and psychology, has profoundly changed the way policymakers and practitioners view expert advice to consumers. In this article, we take stock of the behavioural science evidence on financial advice and explore its implications for the profession. We organise the evidence in a comprehensive theoretical framework that also serves a practical purpose: the design of behaviour change interventions. We suggest various ways in which financial advisers can use the insights from behavioural science to improve the take-up and effectiveness of their advice. Finally, we discuss ethical and practical considerations for the financial advisor wishing to put behavioural science knowledge to use.     

Injecting Competition into Public-Sector Return to Work: Prospects for the "Ticket to Work" Initiative

The Ticket to Work legislation (1999) introduces private-sector competition into the provision of return-to-work services for persons with disabilities who receive Disability Insurance (DI) payments. This article examines the likely effects of the Ticket to Work initiative using data from the Social Security Administration's Project NetWork experiment (1993–98). The analysis demonstrates that the efficacy of the Ticket to Work program will depend on whether the private sector replaces the vocational rehabilitative services currently provided by the public sector, or whether it expands the delivery of services—both in terms of the level and range of services provided, as well as increasing the portion of DI beneficiaries receiving services. (JEL H4 , I0 , J2 )     

EXPLAINING ATTITUDES TOWARDS AMBIGUITY: AN EXPERIMENTAL TEST OF THE COMPARATIVE IGNORANCE HYPOTHESIS

Many theories have been put forward to explain attitudes towards ambiguity. This paper reports on an experiment designed to test for the existence of Comparative Ignorance when it is tested over events with a range of different likelihoods. A total of 93 subjects valued a series of gambles, one of which was played out for real. The results do not lend support to the theory, although the relationship between risk and ambiguity does appear to correspond with other theories and previous empirical work.