Examining the relationship between stock return volatility and trading volume: new evidence from an emerging economy

Using daily stock return data for individual stocks from an emerging economy, this article examines the relationship between return volatility and trading volume under the theoretical postulate of the mixture of distributions hypothesis. The results suggest that the contemporaneous trading volume as a proxy for latent information arrival to the market did not contribute to the removal of significant ARCH or Generalized Autoregressive Conditional Heteroscedasticity effects that are found in stocks at the first stage of the investigation. The same holds for the lagged volume except for one case. This, perhaps, suggests that the trading volume (contemporaneous or lagged) is not adequately conveying information to induce traders’ views of the desirability of trade and, therefore, points to the need for searching for other micro and macro variables to be used as potential proxy for information arrival to the stock market of the emerging economy.     

Did the Great Recession Affect Fertility? Examining the Impact of Job Displacements on the Timing of Births in the United States

We examine the impact of job losses during the Great Recession on fertility in the United States. We find that for married/cohabiting couples, job losses of males during the recession decreased the likelihood of birth. In contrast, job losses of married/cohabiting females had no impact, on average, on fertility because of opposing age-specific effects. Although younger women were reducing fertility after job losses to cope with the loss of income, older women, aged 40 and above, were more likely to have a child following their job loss. Moreover, we find that job losses of single/noncohabiting females decreased the likelihood of birth, particularly for women below the age of 25. This negative effect on fertility persisted in the medium-term, up to three years following the job losses. Overall, these results suggest that job losses during the recession may be partly responsible for the recent decline in the U.S. birth rates.     

Optimal sale across venues and auctions with a buy-now option

We characterize the optimal selling mechanism for a seller who faces demand demarcated by a high and a low end and who can access an (online) auction site (by paying an access cost) in addition to using his own store that can be used as a posted price selling venue. We first solve for the optimal mechanism of a direct revelation game in which there is no venue-restriction constraint. We find that the direct optimal mechanism must necessarily incorporate a certain kind of pooling. We then show that even with the venue constraint, the seller can use a two stage indirect mechanism that implements the allocation rule from the optimal direct mechanism, and uses the venues in an optimal fashion. The first stage of the indirect mechanism is a posted price at the store. If the object is not sold, we move to stage two, which involves an auction at the auction site. A feature of this auction is a buy-now option which is essential for implementing the pooling feature of the optimal direct mechanism. We also show that the buy-now option in the optimal mechanism is of a “temporary” variety, and that a “permanent” buy-now option, in contrast, cannot implement the optimal mechanism. Auctions with a temporary buy-now option are in widespread use on eBay. We thank the Associate Editor, George Deltas, for his insightful comments. We also thank seminar participants at the University of Basel and the SAET conference 2007.     

Exclusive Versus Non-exclusive Dealing in Auctions with Resale

We consider a seller who can either sell exclusively through resellers, or allow potential consumers to purchase directly from him. The consumers’ willingness to pay is private information. All transactions are in the form of second-price sealed bid auctions. We show that, if the resellers can gain access to a substantially bigger portion of the market than the seller himself, the seller obtains a higher revenue by dealing exclusively through them, i.e., by committing to not sell to any consumer. The result is due to a “winner’s curse” effect: the resellers win only if the consumers that they compete against submit lower bids, i.e., if part of their customer base has low valuations. This depresses the resellers’ willingness to pay relative to what they would be willing to pay under an exclusive resale contract. Our results do not depend on the presence of transaction costs: exclusive dealing yields strictly higher revenue even when the resellers can market the item at zero cost. We would like to thank Richard Engelbrecht-Wiggans, Michael Rothkopf and seminar participants at Iowa State University, the Midwest Mathematical Economics meetings, the Milken Institute, Rutgers University, SUNY at Stony Brook Summer Workshop on Game Theory, for helpful comments and suggestions.     

A preliminary investigation of factors affecting seafood consumption behaviour in the inland and coastal regions of Victoria,Australia

This paper examines whether there are any substantial differences in factors influencing seafood consumption (at‐home) behaviour of consumers from two different regions of Victoria, Australia. We have used the logit modelling procedure and found that there exist noticeable regional differences in seafood consumption behaviour. In the case of the inland region, it is found that the variables price, distance, taste, quality and season are significant at the conventional level. For the coastal region, the factors quality, age and number of persons employed (at the 5% level) and size of households (at the 10% level) significantly influence the seafood consumption behaviour.