How effective is European merger control?

This paper applies an intuitive approach based on stock market data to a unique dataset of large concentrations during the period 1990–2002 to assess the effectiveness of European merger control. The basic idea is to relate announcement and decision abnormal returns. Under a set of four maintained assumptions, merger control might be interpreted to be effective if rents accruing due to the increased market power observed around the merger announcement are reversed by the antitrust decision, i.e. if there is a negative relation between announcement and decision abnormal returns. To clearly identify the events' competitive effects, we explicitly control for the market expectation about the outcome of the merger control procedure and run several robustness checks to assess the role of our maintained assumptions. We find that only outright prohibitions completely reverse the rents measured around a merger's announcement. On average, remedies seem to be only partially capable of reverting announcement abnormal returns. Yet they seem to be more effective when applied during the first rather than the second investigation phase and in subsamples where our assumptions are more likely to hold. Moreover, the European Commission appears to learn over time.     

The high/low divide: Self-selection by values in auction choice

Most prior theoretical and experimental work involving auction choice has assumed bidders find out their value after making a choice of which auction to enter. We examine whether or not bidders knowing their value prior to making a choice of which among multiple alternative auction formats to enter impacts their choice decision and/or the outcome of the auctions. The results show a strong impact on auction choice. Subjects with low values choose the first price sealed bid auction more often while subjects with high values choose the ascending auction more often. The number of bidders in each auction, revenue, efficiency and average bidder surplus all end up equalized.     

EXPERIMENTAL EVIDENCE ON ENGLISH AUCTIONS: ORAL OUTCRY VERSUS CLOCK

This paper tests experimentally, in a common value setting, the equivalence between the Japanese English auction (or clock auction) and an oral outcry auction where bidders are allowed to call their own bids. We find that (i) bidding behaviour is different in each type of auction, but also that (ii) this difference in bidding behaviour does not affect significantly the auction prices. This lends some support to the equivalence between these two types of auction. The winner's curse is present: overbidding led to higher than expected prices (under Nash bidding strategies) in both types of auction. Although interesting and encouraging, the results clearly indicate that further research is necessary, particularly with a modified experimental design.     

UNDERSTANDING THE INTERACTION BETWEEN INTERNATIONAL AND EURO AREA OUTPUT VOLATILITY

This paper addresses two main questions. First, it seeks to establish whether the stylized facts of the ‘great moderation’ that have been documented for the UK and US economies can be found for the Euro area. Second, it explores possible explanations for any changes that have occurred in the volatility of Euro area output fluctuations. In examining why business cycles have moderated, much of the existing literature has tended to concentrate on a few key factors. These include shifts in the structure of the economy, improved monetary policy and a ‘good luck’ factor. This paper, however, follows a relatively new branch of the great moderation literature by focusing on whether international business cycle linkages have changed in a way that may have perpetuated the dampening in Euro area output fluctuations. The results show Euro area output fluctuations to have significantly reduced in variability over the last quarter of a century. The results go on to highlight that, although Euro area cycles differ little from rest of the world cycles, the moderation in Euro area output fluctuations is only marginally due to changes in international business cycle linkages and smaller international and domestic shock variances.     

Underemployment in Australia: a panel investigation

This 2001–2013 panel study finds 33% of part-time employees to be underemployed, disproportionately affecting males, immigrants, youth, the blue-collared and new to our study, those on casual contracts. Within the underemployed sample, we report that the gap between preferred and actual hours (working hour tension) also varies by personal and labour characteristics, largely consistent with that found for the determinants of underemployment. The continued growth of part-time employment and casualization in recent years has been more pronounced among males, raising their rates of underemployment as they disproportionately prefer to work more hours vis-à-vis their part-time female peers.     

Welfare and equity impacts of cross-border factor mobility in Bangladesh: A general equilibrium analysis

We develop a dynamic computable general equilibrium model with cross-border factor mobility to assess the impacts of a foreign wage shock and the effects of counteractive policy measures in Bangladesh. The model features migration of workers and foreign direct investment (FDI) in the ready-made garments (RMG) sector. Our simulation results show that returning migrants induced by a foreign wage fall would reduce household welfare by lowering wages and increasing unemployment, particularly for unskilled workers in the domestic labor market. To counteract this negative shock, FDI promotion in the RMG sector and a human-capital development program are considered. The former policy minimizes the negative impacts of the foreign labor market shock, while a combination of both policies is more equitable.     

The impact of information signals on market prices when agents have non-linear trading rules

Several methods have been developed for filtering seasonal influences and extreme returns in financial and economic time series. The theoretical support for these approaches is rather questionable since it focuses on the effects of shocks on prices and not on their sources. Removing such effects modifies the true generating system of market dynamics because of the non-proportional character of non-linearity. Thus, taking into account that the underlying process of economic time series is highly non-linear we cannot be certain a priori what the impact of new information will be on the dynamic structure of a system. The main contribution of this paper is to demonstrate using the methodology of simulations the eventual distortions in time series data arising from the arrival of news when agents follow non-linear trading strategies. We argue that if news can really modify the dynamical behaviour of a system, then the methodology of filtering exogenous distortions needs to be re-examined.     

Intergenerational Correlations of Extreme Right‐Wing Party Preferences and Attitudes toward Immigration

In this paper, we analyze the importance of parental socialization on the development of children's far right‐wing preferences and attitudes toward immigration. Using longitudinal data from Germany, our intergenerational estimates suggest that the strongest and most important predictor for young people's right‐wing extremism are their parents' right‐wing extremist attitudes. While intergenerational associations in attitudes toward immigration are equally high for sons and daughters, we find a positive intergenerational transmission of right‐wing extremist party affinity for sons, but not for daughters. Compared to the intergenerational correlation of other party affinities, the high association between fathers' and sons' right‐wing extremist attitudes is particularly striking.     

Unmediated communication in games with complete and incomplete information

We study the effects of adding unmediated communication to static, finite games of complete and incomplete information. We characterize S^U(G), the set of outcomes of a game G, that are induced by sequential equilibria of cheap talk extensions. A cheap talk extension of G is an extensive-form game in which players communicate before playing G. A reliable mediator is not available and players exchange private or public messages that do not affect directly their payoffs. We first show that if G is a game of complete information with five or more players and rational parameters, then S^U(G) coincides with the set of correlated equilibria of G. Next, we demonstrate that if G is a game of incomplete information with at least five players, rational parameters and full support (i.e., all profiles of types have positive probability), then S^U(G) is equal to the set of communication equilibria of G.     

What drives housing price dynamics in Greece: New evidence from asymmetric ARDL cointegration

In this paper, we study the dynamics between house prices and selected macroeconomic fundamentals in Greece. The empirical analysis applies the asymmetric ARDL cointegration methodology proposed by Shin, Yu and Greenwood-Nimmo (2011) over the period from January 1999 to May 2011. The evidence suggests that ignoring the intrinsic nonlinearities may lead to misleading inference. In particular, the results reveal significant differences in the response of house prices to positive or negative changes of the explanatory variables in both the long- and short-run time horizons. The obtained evidence of asymmetry could be of major importance for more efficient policymaking and forecasting in the Greek house market.