We test the hypothesis that capacity constraints significantly influence hedge fund families’ decision to open new funds. Hedge fund families face diseconomies of scale because of the non-scalability of their investment strategies. We propose that as the existing funds approach critical size, hedge fund families may prefer opening new funds rather than accepting new investment in the existing f...

This paper extends the existing research on real estate investment trust (REIT) operating efficiencies. We estimate stochastic-frontier, panel-data models specifying a translog cost function. The specified model updates the cost frontier with new information as it becomes available over time. The model can identify frontier cost improvements, returns to scale, and cost inefficiencies over time....

An exploratory home health care (HHC) cost-function model is estimated using State rate-setting data for the 74 traditional (nonprofit) Connecticut agencies. The analysis demonstrates U-shaped average costs curves for agencies' provision of skilled nursing visits, with substantial diseconomies of scale in the observable range. It is determined from the estimated cost function that the sample re...

A general discrete hub network model that accounts for fixed, capacity, and operating/congestion costs on links and at hubs, with both economies and diseconomies of scale, selects hubs and links, determines their capacities, and assigns O-D flows over paths, while minimizing all system costs. Initially formulated as a mixed-integer non-linear program, the model is transformed into a mixed-integ...

Prior research has examined audit pricing for publicly held firms and provided some evidence of a Big 8 premium in pricing. We investigate audit pricing among private firms for the first time, and we compare audit pricing for private and public clients. We present evidence of a pricing premium, on average, for non-Big 5 auditors among large private clients after controlling for other effects. W...

We analyze the design of the optimal price for a firm which is a monopolist at home but competes abroad against foreign firms. The price rule depends on whethere there are economies or diseconomies of scope between home and foreign output and on the relative weights the regulator assigns to foreignand home-earned profits. Informational asymmetry introduces a distortion in the price rule, which ...