Job Market Signaling and Employer Learning This paper extends the job market signaling model of Spence (1973) by allowing firms to learn the ability of their employees over time. Contrary to the model without employer learning, we find that the Intuitive Criterion does not always select a unique separating equilibrium. When the Intuitive Criterion bites and information is purely asymmetric, the...

This study extends from Liu and Mei (1992) by further investigation of assets, real estate related securities, which includes both equity and mortgage real estate investment trusts (REITs), the stocks of builderand owner-companies, and mortgagebacked securities (MBSs). There are five major findings. First, expected excess returns of real estate related securities are more predictable than the e...

In critical energy infrastructure sectors (e.g. electric power generation, natural gas transportation, oil refining capacity) maintaining certain level of excess capacity is socially valuable (as it serves to protect against unexpected market conditions) but not necessarily compatible with the incentives for individual firms in the market. In this paper, we develop a dynamic oligopoly model wit...

In a model with endogenous number of innovating firms, we show that whether patent protection increases R&D investment is ambiguous, and depends on the market demand function and the cost of R&D. If the market size increases with number of firms, patent protection reduces R&D investment if the cost of R&D is sufficiently high, and higher product differentiation increases the possibility of lowe...

This paper presents the case for and the evidence in favour of passive investment strategies and examines the major criticisms of the technique. I conclude that the evidence strongly supports passive investment management in all markets—smallcapitalisation stocks as well as large-capitalisation equities, US markets as well as international markets, and bonds as well as stocks. Recent attacks on...

The approval by FERC of a regulated natural gas pipeline’s market-based rate application depends upon the availability of substitute pipelines with sufficient capacity to maintain the current transport price. But how much alternate capacity is enough? Clearly, the price will not increase when alternate pipelines have unsubscribed capacity equal to the capacity of the applicant pipeline, since t...

This paper quantifies the economic benefits associated with the introduction of greater spatial granularity in short-term pricing in the California wholesale electricity market. On April 1, 2009, California switched to a nodalpricing market with an integrated day-ahead forward market and real-time imbalance market from its original zonal market design with bilateral day-ahead scheduling, a real...