Abstract. An insurance activity model that allows to evaluate the duration of the negative surplus is presented in this paper. Assuming the surplus process as continuing if ruin occurs, we consider how long this process will stay below zero. The compound Poisson continuous time surplus process is used for the model development. Analytical formulas are obtained for estimating the expected value ...

The economic implications of network topologies are studied via a monopolist’s model of market networks originally proposed by Phan, et al. (2003). By embedding the market into a larger collection of network topologies, in particular, a class of scale-free networks, we extend the early analysis built upon a class of ring networks. To facilitate the study of the impacts of network topologies upo...

We show that introducing an external capital market with information asymmetry into a product market model reduces opportunistic substitution of sub-standard goods and encourages producers to concentrate on long-run reputation building. We test this result with a laboratory experiment. We find that, when the problem of product market opportunism is moderate, i.e., reputation formation equilibri...

The paper provides a possible explanation for the occurrence of uniform, fixedproportion rules for sharing surplus in two-sided markets. We study a two-sided matching model with transferable utility where agents are characterized by privately known, multi-dimensional attributes that jointly determine the surplus of each potential partnership. We ask the following question: for what divisions of...

Search engines, referrals services, advisors, and other forms of information gatekeepers and recommenders, are omnipresent in today’s information-heavy economy. These services widely employ sponsored recommendations, wherein merchants pay the recommender in return for favorable placement in the recommender’s list. As a form of advertising, sponsored results can serve as a signaling mechanism wh...

The paper compares the economic progress of two countries, South Africa and China, in relation to Lewis model. These economies are chosen because they have interesting similarities also differences. At start reform China with advent democracy Africa, both countries had surplus labour: were at first, labour-surplus, stage It is shown that, since then, has continued experience unemployment rate r...

Releaving traffic congestion by developing public transport as an alternative mode of travel is a common practice all over the world. However, the increasing public transport subsidies have created a financial burden for governments. Encouragingly, private capital supplies an opportunity for public transport in sustainable finance. Previous research mainly focuses on qualitative analysis and mo...

This paper demonstrates that the economic surplus which agents produce in bilateral interactions is extractable by an outside party having sufficient initial resources. The third party achieves this outcome using a class of ‘‘exclusive-interaction’’ contracts. A basic extractability result is shown to be robust to several extensions: competition among outside parties, multiplicity of interactin...

Economists have long recognized that regulation is an imperfect solution to market failure. Do the inefficiencies of regulation outweigh the inefficiencies of market failure? In this paper, we develop a stylized model of a monopolist offering two services, one more widely demanded than the other. We compare aggregate surplus from unregulated monopoly with aggregate surplus from a median voter m...