Cycles and multiple equilibria in the market for durable lemons

Summary. The paper investigates the nature of market failure in a dynamic version of Akerlof (1970) where identical cohorts of a durable good enter the market over time. In the dynamic model, equilibria with qualitatively different properties emerge. Typically, in equilibria of the dynamic model, sellers with higher quality wait in order to sell and wait more than sellers of lower quality. The main result is that for any distribution of quality there exist an infinite number of cyclical equilibria where all goods are traded within a certain number of periods after entering the market. Received: December 21, 2000; revised version: September 5, 2001     

Forced Freebies: A Note on Partial Deregulation with Pro Bono Supply Requirements

The liberalization of many former state governed natural monopolies in sectors such as electricity, railroad and telecommunications is done by partial deregulation. Typically, entry is invited into elements of the production chain, yet under strict price and quality controls. This note considers some potential welfare effects of an unconventional type of conditional deregulation, used in the electricity market in Flanders, Belgium, where the utility companies are held to deliver the households they supply a complimentary basic electricity package free of charge. It is shown that, while decreasing the number of new entrants into the liberalized market, such pro bono supply requirements can nevertheless increase net total production. A general condition for a welfare maximizing level of forced freebies is derived.     

Bank profitability during recessions

This paper contributes to the literature on the relation between bank profitability and economic activity. When allowing for stronger co-movement of bank profit with economic activity during deep recessions, we find a much larger impact of output growth on bank profitability than commonly found in the literature. Among the different components of bank profit, loan losses are the main driver of this result. We also find long-term interest rates in previous years to be important determinants of bank profit in times of high economic growth. Our findings are robust to the use of aggregate or individual bank data.     

The Scope for Increasing Total Hours Worked

Dutch women who work long hours mostly prefer to work shorter hours whereas women who work short hours mostly prefer to work longer hours. This paper shows that the point where preferred and actual working hours are on average equal depends on individual characteristics. This heterogeneity is of interest to policy makers who are aiming to increase the total number of hours worked by women. The tool this paper develops is informative in two ways. First, it shows in what hours range we find individuals of a certain type who want to work longer or shorter hours. Second, it calculates the relative sizes of these groups to examine the scope for policy.     

Early Bayesian modeling of a potassium lab-on-a-chip for monitoring of heart failure patients at increased risk of hyperkalaemia

ObjectivesInnovative point-of-care (POC) diagnostics are likely to have a strong impact on health care. The aim of this study is to conduct an early assessment of a point-of-care chip for the detection of a pathological deviation of the potassium levels in patients at increased risk, specifically in patients with heart failure (HF) requiring diuretics and ACE inhibitors that can both interfere with potassium levels, which may lead to serious clinical complications. This study also identifies the key factors that determine the success of the application under study.MethodsA Markov health state transition model was developed representing the disease process. Model parameters were obtained from various literature sources and estimated using interviews and related data. Simulation was carried out for 60 cycles of 1 month each. A discount rate of 3.5% was used, both for costs and utilities. In order to assess uncertainty a probabilistic sensitivity analysis was carried out from which a cost-effectiveness acceptability curve was derived.ResultsFor an anticipated number of 121 measurements per year with a cost of €16.60 per chip, an incremental cost-effectiveness ratio (ICER) of 34,856 €/QALY was found. Sensitivity analysis revealed that the threshold for the costs per chip was €19.30 in order to maintain a positive net monetary benefit. Also, model results are very sensitive to the utility of hyperkalaemia and to the probability to develop severe hyperkalaemia.ConclusionsThe question whether or not a POC chip to measure potassium concentrations in order to avoid a severe potassium imbalance is likely to be cost-effective cannot be definitively answered with the information at our disposal. Further research should focus on heart failure patients at particularly high risk of severe life-threatening hyperkalaemia, for instance in the presence of significant renal dysfunction. It may be expected that the use of the chip in such patient populations may render this point-of-care application very cost-effective.     

Weight-based pricing in the collection of household waste: the Oostzaan case

This paper provides an empirical analysis of the effects of weight-based pricing in the collection of household waste. Using a comprehensive panel data set on all households in a Dutch municipality we estimate short-run as well as long-run price effects for the amounts of both compostable and non-recyclable household waste. We find significant and sizeable price effects, with the elasticity for compostable waste being four times as large as the elasticity for non-recyclable waste. Long-run elasticities are about 30% larger than short-run elasticities.     

Energy intake and productivity of Guatemalan sugarcane cutters: An empirical test of the efficiency wage hypothesis part I

This study represents an empirical test of the productivity consumption relation of the efficiency wage hypothesis, which is briefly discussed here. The research setting and design of the study are described. An energy supplementation program was generally effective in raising the daily energy intake and energy expenditure levels of Guatemalan sugarcane workers who were moderately energy deficient. Increased energy availability did not result in increased energy expenditure at work, or in an increased supply of work units. The results do not provide evidence of a strong productive-energy intake relationship among these workers.     

Towards constructive design feedback dialogues: guiding peer and client feedback to stimulate children’s creative thinking

International Journal of Technology and Design Education - Design feedback is an essential pedagogical tool that can help young novice designers navigate divergent and convergent paths while...