Why factors facilitating collusion may not predict cartel occurrence — experimental evidence

Factors facilitating collusion may not successfully predict cartel occurrence: When a factor predicts that collusion (explicit and tacit) becomes easier, firms might be less inclined to set up a cartel simply because tacit coordination already tends to go in hand with supra-competitive profits. We illustrate this issue with laboratory data. We run n-firm Cournot experiments with written cheap-talk communication between players and we compare them to treatments without the possibility to talk. We conduct this comparison for two, four, and six firms. We find that two firms indeed find it easier to collude tacitly but that the number of firms does not significantly affect outcomes with communication. As a result, the payoff gain from communication increases with the number of firms, at a decreasing rate.     

Interconnectedness and systemic risk in the US CDS market

This study assesses systemic risk in the US credit default swap (CDS) market. First, this study estimates the bilateral exposures matrix using aggregate fair value data and theoretically analyze interconnectedness in the US CDS network using various network measures. Second, this study theoretically analyzes the contagious defaults. The default analysis shows the theoretical occurrence of many stand-alone defaults and one contagious default via the CDS network during the global financial crisis. A stress test based on a hypothetical severe stress scenario predicts almost no future contagious defaults. Thus, risk contagion via the CDS network is unlikely.     

A SPATIAL MODEL OF CARTEL STABILITY: THE INFLUENCE OF PRODUCTION COST CONVEXITY

We uniquely introduce convex production costs into a cartel model involving spatial price discrimination. We demonstrate that greater convexity improves cartel stability and that for sufficient convexity first best locations will be adopted. We show that allowing locations to vary over the game reduces cartel stability but that greater convexity continues to improve that stability. Moreover, when the degree of convexity does not support the first best collusive locations, other collusive locations exist that require less stability and these may either increase or decrease social welfare relative to competition. Critically, these locations that require less stability are more dispersed in sharp contrast to the known result assuming linear production costs.     

How does risk transference to private partner impact on public-private partnerships’ success? Empirical evidence from developing economies

This work analyses how risk transference to the private partner affects the success of public-private partnerships (PPP). For this purpose, a broad sample from the World Bank database of 6,022 PPP infrastructure projects in 59 developing countries in the period 1997 to 2016 is analysed. Using multilevel logistic models our results show that PPPs' success is more likely when the private partner takes more risk and the economic and institutional environments are better. Another interesting finding is that an excessive transference of risks to the private party when certain institutional features show good records could prejudice PPPs’ performance.     

Hospitals’ strategic behaviours and patient mobility: Evidence from Italy

This study explores the behaviour of hospitals in Lombardy in attracting patients from outside the region and investigates the effects on the quality of care to regional patients, where treatment of the latter is constrained by a budget cap while extra-regional patients represent an unconstrained source of revenue. The data suggest that hospitals use waiting time and length of stay to attract extra-regional patients. Regional patients in both private and public hospitals with higher proportions of extra-regional patients are characterized by lower mortality rates and reimbursement costs. These results suggest that the market for extra-regional patients has no negative effects on resident patients. Finally, the pattern of reimbursement for extra-regional care generates a financial flow in favour of wealthier regions, exacerbating the North–South divide in the National Health Service. Some form of regulation for extra-regional mobility is advisable to reduce the gap.     

A theory of return‐seeking firms

We introduce a theory of return‐seeking firms to study the differences between this and profit‐maximising models. A return‐seeking objective takes into account the opportunity cost of each additional resource input to a firm's production as being a potential capital input choice in an alternative project. We find that firm supply curves cease to exist in perfectly competitive markets, that supply curves may slope up as well as down, that economies of scale are necessary for any production to occur and that firms always produce on a decreasing portion of their cost curve.     

Terrain ruggedness and limits of political repression: Evidence from China’s Great Leap Forward and Famine (1959-61)

Chairman Mao Zedong’s Great Leap Forward development plan strongly affected food security in rural China at the time, given that many of the associated policies exploited rural labor and extracted resources. A few months after the plan’s initial implementation in August 1958, food shortages were reported; by the spring of 1961, more than 30 million citizens had died of starvation and famine-related illnesses. However, as the national plan was rolled out and then upheld over three years, on-the-ground implementation was nonuniform. Using georeferenced terrain ruggedness data which captures small-scale topological irregularities and information on provincial leadership attitudes towards Mao’s plan, I provide evidence on forces underlying the famine’s intensity and distribution. The analysis is based on a differential effect, in which a fear-based incentive structure characterizing the plan’s implementation is implicitly embedded. The baseline results indicate that rugged terrain protected more than 4.6 million rural Chinese from dying in the famine. By identifying an additional benefit of ruggedness to health and well-being in some rural communities, I show that not only does a causal relationship exist at a local level between Great Leap policies and famine mortality, but also that the lethality of the policies varied per state power at the time.     

ALTERNATIVE STRATEGIES OF A PUBLIC ENTERPRISE IN OLIGOPOLY REVISITED: AN EXTENSION TO STACKELBERG COMPETITION

This paper revisits De Fraja and Delbono (1989), which is the seminal paper on mixed oligopoly, in order to pay more attention to Stackelberg competition. First, we show that, even in Cournot competition, if the number of private firms is sufficiently small, privatization necessarily reduces social welfare. Second, we demonstrate that when a public firm is a Stackelberg leader before and after privatization, privatization necessarily reduces welfare irrespective of the number of private firms. Moreover, we show that even when a public firm remains a follower, privatization reduces welfare if the number of private firms is relatively small.     

Financial development and economic growth nexus: A rejoinder to Tsionas

Tsionas has offered a more revisionist approach to the empirics of the nexus between financial development and economic growth following our paper entitled ‘Financial development and economic growth nexus: A revisionist approach’. In the current note, we engage Tsionas’ approach in tandem with our original finance–growth nexus review. We concur with Tsionas’ approach and reiterate that the debate on the relationship between financial development and economic growth remains a complex terrain both on the theoretical and empirical fronts.     

“三微一博”融合的高校教师移动学习策略研究

在高速的网络时代,微博、微信、微课程、博客等的应用日益广泛。笔者以自己运用这些社交媒体进行移动学习的实践为研究对象,得出这些社交媒体是可以整合起来,为教师的个人移动学习搭建一种移动的社会性合作的虚拟学习环境,给教师的个人移动学习提供方便、快捷的服务。