In this note we show that the results developed in Singh and Vives (1984) are sensitive to the duopoly assumption (Rand Journal of Economics 15, 546-554). If there are more than two firms, prices may be higher under price competition than under quantity competition. This will be the case if quality differences are large and goods are complements. If goods are substitutes, high-quality firms may...

ELECTIONS AND ASSET PRICING: THE POLITICALLY SENSITIVE EQUITY OF US MILITARY CONTRACTORS by

In contrast with the classical models of frictionless financial markets, market models with proportional transaction costs, even satisfying usual no-arbitrage properties, may admit arbitrage opportunities of the second kind. This means that there are self-financing portfolios with initial endowments laying outside the solvency region but ending inside. Such a phenomenon was discovered by M. Rás...

Focus is here on coalitional games among economic agents plagued by aggregate pollutions of diverse sorts. Defecting players presumably pollute more than others. Then, granted convex preferences and technologies, the core is proven nonempty. In fact, under natural assumptions, a specific, computable core solution comes in terms of shadow prices on the said aggregates. Such prices may, in large ...

For portfolio choice problems with proportional transaction costs, we discuss whether or not there exists a shadow price, i.e., a least favorable frictionless market extension leading to the same optimal strategy and utility. By means of an explicit counter-example, we show that shadow prices may fail to exist even in seemingly perfectly benign situations, i.e., for a log-investor trading in an...

Both the heartwood and the sapwood of living hard maple trees, and to some extent of other hardwoods, of the Lake States and northeastern forests commonly are disfigured by deep olive or greenish black discolorations generally known as mineral stain or mineral streak. These may appear on sawed materials as individual lenticular streaks of various lengths paralleling the grain or as mass discolo...

The price dispersion means different prices for same goods. In the Internet economy, many economists reckon that the price dispersion in the e-commerce markets should descend along with the dropping of search cost. However, the correlative empirical studies reach a contrary opinion: there not only exist price dispersion in the e-commerce market, but also has larger dispersion degree than the tr...

Quality-Adjusted Life Years (QALYs) are the most widely-used measure of health in cost– effectiveness analysis and cost–benefit analysis. Within a welfarist framework QALYs are consistent with people’s preferences under stringent assumptions. Several authors have argued that QALYs are a valid measure of health within an extra-welfarist framework. This paper studies the applicability of QALYs wi...

Tradable permits are celebrated as a political instrument since they allow (i) firms to equalize marginal abatement costs through trade and (ii) the government to distribute the burden of the policy in a politically fair and feasible way. These two concerns, however, conflict in a dynamic setting. Anticipating that high-cost firms will receive more permits in the future, firms purchase excessiv...