Centralised order books versus hybrid order books: A paired comparison of trading costs on NSC (Euronext Paris) and SETS (London Stock Exchange)

This article compares the cost of trading large capitalisation equities on the hybrid order-driven segment of the London Stock Exchange and the centralised electronic order book of Euronext. Using samples of stocks matched according to economic sector, free float capitalisation, and trading volume, our study shows that transaction costs are lower on the centralised order book than on the hybrid order book. The presence of dealers outside the electronic order book favours the frequency of large trades, but is associated with higher execution costs for all other trades and higher adverse selection and inventory costs inside the order book.     

Welfare egalitarianism in non-rival environments

We study equity in economies where a set of agents commonly own a technology producing a non-rival good from their private contributions. A social ordering function associates to each economy a complete ranking of the allocations. We build social ordering functions satisfying the properties that individual welfare levels below the stand-alone lower bound (respectively, above the unanimity upper bound) should be increased (respectively, reduced). Combining either property with efficiency and robustness properties with respect to changes in the set of agents, we obtain a kind of welfare egalitarianism based on a constructed numerical representation of individual preferences.     

Commodity tax harmonization and the location of industry

We study the positive implications of commodity taxation and tax harmonization under the destination and origin principles when firms are monopolistic competitors facing variable demand elasticity and segmented markets. Our emphasis is on the international location of firms in the presence of market size asymmetries and trade costs. Under the destination principle, an increase in the tax rate of a country always causes some firms to relocate to the other. This effect may be reversed under the origin principle when economic integration is deep enough. Under tax harmonization the choice of a common tax principle is irrelevant for the market outcomes and for the global tax revenues. It affects, however, the distribution of revenues between small and large countries.     

The purchase versus illegal download of music by consumers: the influence of consumer response towards the artist and music

Based on qualitative and quantitative surveys, I show that consumer responses toward a particular song and toward its performer(s) play distinct roles in explaining consumer choices to either buy or illegally download that song. The various types of consumer responses to songs and artists are first identified through qualitative research and then validated through exploratory and confirmatory factor analyses (CFA) of survey data. While consumer responses to music explain the need to reexperience and acquire the song, consumer responses to performers explain purchase over illegal downloading. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.     

The Regulation of Pharmacists in Belgium and the Netherlands: In the Public or Private Interest?

The regulation of pharmacists in Belgium and the Netherlands is analysed in order to test the rent-seeking hypothesis put forward in the private interest literature. Both the self-regulation issued by the professional bodies and public regulations are examined. It appears that many regulations in both countries either restrict the entry into the profession or restrict competition within the profession. A qualitative comparative analysis of these regulations in both countries is presented as well as some empirical findings. The economic analysis and the empirical data seem to give some support to the rent-seeking hypothesis.     

Multi-Event Bonus-Malus Scales

This article is devoted to the design of bonus‐malus scales involving different types of claims. Typically, claims with or without bodily injuries, or claims with full or partial liability of the insured driver, are distinguished and entail different penalties. Under mild assumptions, claim severities can also be taken into account in this way. Numerical illustrations enhance the interest of the approach.     

A Bayesian adaptive design in clinical trials for continuous responses

Adaptive design is a popular concept in several clinical trials, especially in phase III trials. The idea is to allocate treatments to the entering patients according to the state of art of the present data, i.e., to allocate a larger number of patients to the better treatment. The present paper provides a Bayesian formulation of an adaptive allocation design for clinical trials that considers all the continuous responses along with the associated covariates for future allocation. Some Bayesian inferences followed by the allocation are discussed along with a Bayesian prediction for future allocation. The convergence of the allocation probabilities is also discussed along with some related logistics of the design.     

A Theory of Fraud and Overtreatment in Experts Markets

Consumers often rely on an expert's diagnosis to assess their needs. If the expert is also the seller of services, he may use his informational advantage to induce overtreatment, which is a pervasive phenomenon in experts markets. We offer and discuss conditions leading to equilibrium overtreatment in an otherwise purely competitive model. This market failure results from consumers' ability to turn down an expert's recommendation: experts defraud consumers to keep them uninformed, as this deters them from seeking a better price elsewhere.     

Fiscal competition and regional differentiation

Regions can benefit by offering infrastructure services that are differentiated. Competition between regions over potential investors is then less direct, allowing them to realize greater benefits from external investors. The two polar cases of full and incomplete information about investors' needs are studied. In both cases, there is regional differentiation. However, fiscal competition is efficient in the former case but not in the latter. Finally, it is shown that free entry in the location market calls for some regulation because of the excessive number of competing regions that would prevail in equilibrium.