Price competition in an inflationary environment

Valuation in an Inflationary Environment

Using illustrative examples, this paper shows that the Net Present Value for project evaluation should be based on estimates of free cash flows at nominal prices. It is a widespread practice to evaluate projects at constant or real prices. These days, the use of constant or real prices is an unnecessary oversimplification. In particular, we present an example where the results from the constant...

NEW MORTGAGE DESIGNS an INFLATIONARY ENVIRONMENT

Quality competition versus price competition goods: An empirical classification

Based on the recent trade models of the Heterogeneous Firms Trade (HFT) model and the Quality Heterogeneous Firms Trade (QHFT) model, we classify export goods (at the HS 6-digit level of disaggregation) by quality and price competition. We find a high proportions of quality-competition goods for the major EU countries and lower proportions for Canada, Australia and China. However, the overlap o...

price competition in California

Critics of health care reform proposals that incorporate managed competition contend that it has never been broadly implemented. However, insurance plans that combine insurance with the provision of care have been widely implemented and have been tested most extensively in California. This DataWatch explores California’s experience with health maintenance organizations (HMOs) and preferred prov...

Price Competition for an Informed Buyer

This paper investigates price competition with private information on the demand side. Two sellers each offer a different variety of a good to a buyer endowed with a private binary signal on their relative quality. The model provides an informational foundation to differentiation in Hotelling's price competition game. Equilibrium comparative statics is performed with respect to the prior belief...