The promise and peril of dynamic targeted pricing

Dynamic pricing is widely adopted in many industries, such as travel and insurance. These industries are also gaining extensive capabilities in identifying and segmenting customers, partly fueled by the increasing availability of data. It is natural to ask whether firms should take advantage of such developments by charging different prices to different customer segments. If so, under what conditions? We seek answers to these highly managerially relevant questions.We consider a market with two customer segments served by a monopolist. The monopolist can choose among a set of pricing strategies to exploit consumers’ inter-temporal preferences and/or inter-segment variations. At one end of the spectrum, the firm can charge a constant price to all customers, which is called static pricing. At the other end of the spectrum, the firm can charge different prices to different customer segments and vary these prices over time, which is referred to as dynamic targeted pricing. We systematically compare these alternative pricing strategies. We show that dynamic pricing without targeting can be more effective than static targeted pricing when customers are not very forward looking, which corroborates the findings in the empirical literature. Interestingly, we find that the monopolist can be worse off when she adopts targeting in addition to dynamic pricing. We conduct laboratory experiments to test several key model predictions. The studies show that individuals behave in a manner consistent with the predictions of our model.     

Financial stress,sovereign debt and economic activity in industrialized countries: Evidence from dynamic threshold regressions

We analyze how the impact of a change in the sovereign debt-to-GDP ratio on economic growth depends on the level of debt, the stress level on the financial market and the membership in a monetary union. A dynamic growth model is put forward demonstrating that debt affects macroeconomic activity in a non-linear manner due to amplifications from the financial sector. Employing dynamic country-specific and dynamic panel threshold regression methods, we study the non-linear relation between the growth rate and the debt-to-GDP ratio using quarterly data for sixteen industrialized countries for the period 1981Q1-2013Q2. We find that the debt-to-GDP ratio has impaired economic growth primarily during times of high financial stress and only for countries of the European Monetary Union and not for the stand-alone countries in our sample. A high debt-to-GDP ratio by itself does not seem to necessarily negatively affect growth if financial markets are calm.     

Dynamic DEA models with network structure: An application for Iranian airlines

Efficiency estimation of interdependent divisions within a company or assessing the interrelated processes in a production system provides insights for improving the operational performance. Recent developments in network data envelopment analysis (NDEA) models enable decision making units (DMUs) to be informed of inefficient processes within the system. The NDEA model assesses the processes of the system in a specific moment and ignores the dynamic effects within the production processes. Thus, without considering the temporal dimension of production processes, biased efficiency measurement will be obtained that provides misleading information to DMUs. For evaluating the performance of a DMU with interrelated processes during specified multiple periods, this paper proposes a relational dynamic NDEA (DNDEA) model which measures the efficiencies of the system and its internal processes over the time, simultaneously. To illustrate the capability of the proposed model, this study for the first time measures the efficiency of eight Iranian airlines in several periods connected to each other by carry over flows. The actual data is gathered in three periods from 2010 to 2012 and the results are compared with the dynamic DEA and network DEA models in the same time span.     

Exploring the relationship between truck load capacity and traffic accidents in the European Union

Applying econometric techniques to EU28 panel data and controlling for explanatory variables such as road types, we find that increased truck load capacity does not necessarily aggravate road traffic safety. Specifically, heavy trucks do not seem to be linked with greater numbers of traffic fatalities/accidents, medium trucks appear to be the worst performers in terms of fatalities, and light trucks seem to be the worst for accidents. In summary, our results clarify the complex relationship between truck load capacity and road safety, pointing to the existence of a negative correlation for accidents per capita and an inverse U-shaped curve for fatalities per capita.     

Currency crisis early warning systems: Why they should be dynamic

Traditionally, financial crisis Early Warning Systems (EWSs) have relied on macroeconomic leading indicators when forecasting the occurrence of such events. This paper extends such discrete-choice EWSs by taking the persistence of the crisis phenomenon into account. The dynamic logit EWS is estimated using an exact maximum likelihood estimation method in both a country-by-country and a panel framework. The forecasting abilities of this model are then scrutinized using an evaluation methodology which was designed recently, specifically for EWSs. When used for predicting currency crises for 16 countries, this new EWS turns out to exhibit significantly better predictive abilities than the existing static one, both in- and out-of-sample, thus supporting the use of dynamic specifications for EWSs for financial crises.     

Travel and tourism competitiveness index: The impact of air transportation,railways transportation,travel and transport services on international inbound and outbound tourism

The objective of the study is to examine the impact of air transportation, railways transportation, travel and transport services on international inbound and outbound tourism in a panel of 19 tourists - oriented countries, over a period of 1990–2014. By applying principal component analysis, the study constructs travel and tourism competitiveness index for inbound and outbound tourism. The main constructs of inbound tourism index include international tourists' arrival, tourism receipts, receipts of passengers' transports items and travel items while the constructs of the outbound index include international tourists' departure, tourism expenditures, and expenditures for passengers transport and travel items. The result of panel Fully Modified OLS (FMOLS) regression shows that the presence of air transportation, railways transportation, and trade openness positively affect inbound tourism index, while travel and transport services negatively affect tourism competitiveness index. The causality results confirm the bidirectional relationship between inbound tourism, air transportation, railways passengers carried, trade openness and travel and transport services, while there is a unidirectional causality running from inbound index to railway goods transported, from air transport freight to trade factor, and from travel services to air transport freight. Outbound tourism index confirmed the bidirectional causality relationship with air transportation, railways transportation, and travel and transport services, while the causality running from outbound index to trade factor, from air transport passenger carried to travel services, and from railway goods transported to trade and transport services, which support the unidirectional causality relationship between them. The variance decomposition results show that air transportation freight is the contributor that largely influences inbound-outbound tourism, while railways passengers carried and trade openness has the least share to influence inbound and outbound tourism index for the next 10-year period. The impulse response function indicates that air transportation, railways transportation, trade openness and travel services will positively impact on inbound truism while travel and transport services will positively affect outbound tourism for the next 10-year period. The study concludes with the importance of transportation sector that deem desirable to promote tourism worldwide. The concentration of different modes of transportation including air transportation, railways transportation, and travel and transport system would helpful to advance international tourism.     

The Post-entry Performance of Cohorts of Export Starters in German Manufacturing Industries☆

This paper investigates four cohorts of firms from German manufacturing industries that started to export between 1998 and 2002, and follows them for five years after the start. Export starters are a rare species and small in Germany. Around 30–40% of those starters studied became continuous exporters. The share of total exports contributed by export starters of a cohort is tiny in the start year, and it remains so over the years that follow. Contrary to the market selection hypothesis, there is no evidence that productivity in the start year is systematically related to survival in the export market. There is no evidence of a negative impact of a smaller firm size in the start year on the chance of surviving in the export market. Starting with a higher share of exports in total sales, however, tends to increase the probability of continuing to export.     

Corporate bond market interdependence: Credit spread correlation between and within U.S. and Canadian corporate bond markets

This study investigates the correlation and interdependence between and within the U.S. and Canadian corporate bond markets. The empirical framework adopted allows credit spreads to depend on common systematic risk factors derived from structural models and incorporates dynamic conditional correlations (DCC) between spreads. Results show that there is a surprisingly weak correlation between the two markets in normal times. However, during crises, there is a sudden and strong increase in the correlation between U.S. and Canadian credit spreads. The analysis of credit spread correlation within each market also shows an unusual increase in credit spread correlations between sectors and between risk classes in the U.S. during the 2007–2009 global financial crisis. This increase persists over the post-crisis period. By contrast, in Canada, credit spread correlations between sectors remain remarkably stable over time, suggesting an interdependence of credit spreads within the Canadian market.     

Optimal investment strategies in an international economy with stochastic interest rates

We investigate how investors should optimally choose to invest in a dynamically complete international market. We find closed-form solutions for the optimal investment strategy and for the wealth loss an investor suffers from not investing internationally. Theoretically, we show that the gain from international investment is due to the speculative investment only, and why it is important for an investor from a large economy to invest in a small economy. In a numerical example we compare the wealth losses investors from Denmark and the U.S. suffer due to home bias.     

后危机时代政府干预与银行信贷—基于国有经济视角

本文利用我国2007-2016年的省级面板数据,对后危机时代政府干预与银行信贷以 及不良贷款率进行了实证研究。本文发现：地方政府干预显著带来地区信贷增长以及不良贷款 率下降;地方政府通过对国有经济进行干预,可以显著带来地区信贷增长,但对降低地区不良 贷款率不显著。进一步研究发现：东部地区政府干预有助于提高地区信贷增长并降低不良贷款 率;西部地区政府通过干预国有经济能带来地区信贷增长;无论是东部、中部还是西部,政府 通过对国有经济的干预降低地区不良贷款率均不会产生太大效果。