Embedding economies of scale concepts for hub network design

We explore the idea of endogenous hub location on a network. In contrast to much of the literature, we propose that hub networks may emerge naturally out of a set of assumptions and conditions borrowed from equilibrium traffic assignment. To this end, we focus on applying a nonlinear cost function that rewards economies of scale on all network links. A model is presented and implemented in a GIS environment using both a 100-node intercity matrix and several synthesized interaction matrices. We compare solutions for different assumptions about network costs, and visualize the results. We find that under discounted conditions, network flow is re-routed to take advantage of the cost savings for amalgamation and that several cities emerge as centers through which large amounts of flow pass. Larger cities such as Los Angeles, New York and Chicago serve gateway functions. We also find that smaller cities such as Oklahoma City, Pittsburgh, Indianapolis, and Knoxville serve major gateway functions because of their locational advantages. Our paper should be of interest to the planner of a surface transportation system, or those interested in nodal concepts such as gateways and transport geography. Results are discussed in light of hub and spoke networks and suggestions are made for future research.     

New Labour's Reform of Britain's Employment Law: The Devil is not only in the Detail but in the Values and Policy Too

The Labour government's goal of social partnership embodies a particular view of the appropriate role of labour within the employment relationship, which requires the marginalization of trade unionism as an autonomous force. Its programme of employment law reform combines a dual focus: first, the reaffirmation of measures that weaken workers' collective power through the exclusion of autonomous trade unionism, and second, initiatives to regulate the labour market, strengthen workers' rights within the employment relationship, and include enterprise‐confined, cooperative unions as subordinate 'partners'. However, the second policy dimension has been diluted because of the commitment to free‐market values.     

Union exclusion—next steps

The Conservative Government has intensified its commitment to union exclusion policies: new legislation has been implemented and the state is being restructured. Parallel policies have been implemented by private employers. In consequence, collective bargaining has been devolved to subordinate unit level, and union recognition and membership has further declined.     

Union Exclusion and the Decollectivization of Industrial Relations in Contemporary Britain

A major focus of the Conservative government's employment policy since 1979 has been the reduction of union power within the labour market, the employment relationship and as representatives of a separate ‘labour interest’ in society ' union exclusion. The principal impact of the legislative changes is to deny workers access to resources of collective power, thereby commensurately increasing employers' discretion to determine the terms of the employment relationship. When forming new subsidiaries and establishments, or purchasing non-union subsidiaries, employers have been able to resist unionization and recognition except on their own terms, but comparatively few have terminated existing union recognition agreements, preferring to marginalize the role of unions through the adoption of partial exclusion policies ' joint consultation, direct communication, performance-related pay, and the fragmentation of common employment and bargaining.     

Cost-benefit evaluation of a new technology for treatment of peptic ulcer disease

Psychosocial benefit resists monetary expression. However, reduction in costs, with no loss of benefits assumed, improves a cost-benefit ratio. The effect of cimetidine on the costs of ulcer has been widely studied. Randomized clinical trials show reductions in surgery and work loss among cimetidine-treated patients versus placebo controls. In the community, time series studies have documented drops in ulcer surgery, averaging about 25% below the expected trend line, following marketing introduction of the drug. These, plus a cross-sectional study of Medicaid patients with and without use of cimetidine, indicate that the drug has reduced the net direct costs of ulcer disease.     

A generalized hazard rate

We present a general class of probability functions in which the hazard rate depends on both time and a shift parameter. It is used, for example, to generalize a model of innovation due to Loury and Dasgupta and Stiglitz.     

What matters in a price negotiation: Evidence from the U.S. auto retailing industry

While there is a great deal of theoretical and experimental literature on what factors affect bargaining outcomes, there is little empirical work based on data from real markets. In this paper we analyze negotiations for new cars, a $340 billion industry in the United States in 2010. Our results suggest that search costs, incomplete information, and bargaining disutility have an economically significant effect in real-world negotiations: we estimate that relative to an uninformed consumer, a consumer with basic information about the seller’s reservation price and his own outside options captures 15% of the average dealer margin from selling an automobile. We also find that a buyer’s search cost and bargaining disutility have significant effects on bargaining outcomes. Finally, our results show that while search is common, there remains a substantial group of consumers who do not engage in any of the search behaviors we measure. We hypothesize that these buyers are not aware of how easy and effective certain activities in improving negotiation outcomes can be.     

Objective estimation versus subjective perceptions of earnings patterns and post‐earnings‐announcement drift

We investigate how the market's subjective estimates of autocorrelation in quarterly earnings vary with objective time‐series estimates. Our results suggest that investors increasingly underestimate the correlation as the autocorrelation level increases, and as a result, the post‐earnings‐announcement drift (PEAD) increases with the level of autocorrelation. We further show that the ability of autocorrelation to explain variation in the PEAD is robust to alternative explanations based on risk and institutional factors. Additional analysis indicates that the market's inefficiency in assessing the existence and magnitude of autocorrelation (and the related impact on PEAD) is inversely related to the richness of the information environment.     

The effect of the summer doldrums on the market reaction to earnings announcements

Hong and Yu (2009) document a significant decrease in trading volume and returns during the summer months. Given the tendency of noise traders to buy shares following both positive and negative earnings surprises (Lee, 1992), we hypothesize that reduced trading activity by noise-traders results in less of an earnings announcement premium during the summer. Consistent with our hypothesis, we find lower abnormal returns surrounding summer earnings announcements compared to non-summer announcements. We also find lower abnormal returns in the ten days prior to the announcement, consistent with less front-running by sophisticated investors. Finally, we show that these summer effects are stronger in recent years characterized by more online trading and greater noise trader participation.