As economists use the term, price discrimination means charging some buyers more than others for essentially the same product or service. Is it a bad thing? Buyers paying the higher prices understandably resent the practice. They might thus be surprised to learn that it often enables them to enjoy both lower prices and higher quality than would be possible if sellers charged the same price to e...

Why Mergers Reduce Profits and Raise Share Prices — A Theory of Preemptive Mergers* by Sven-Olof Fridolfsson and Johan Stennek We explain the empirical puzzle why mergers reduce profits and raise share prices. If being an “insider” is better than being an “outsider,” firms may merge to preempt their partner merging with a rival. The stock-value of the insiders is increased, since the risk of be...

with the development of e-commerce in the recent couple of decades, one of the newly-emerged subjects in global communications and virtual space is hoarding in e-commerce. hoarding is entailing the common essential commodities in order to expect the prices to increase; and in jurisprudence its scope is limited to the four cereals, oil, and edible oil. entailing and storage of public essential n...

This study examines annual earnings announcements for Chinese A-shares, a market dominated by retail investors where short selling is prohibited. We document a significant tendency for A-share prices to increase on the days, both, before and after the earnings announcement date. In contrast, we find a significant tendency for A-share prices to decline on the day of the announcement, immediately...

We study a framework where two duopolists compete repeatedly in prices and where chosen prices potentially affect future market shares, but certainly do not affect current sales. This assumption of consumer inertia causes (noncooperative) coordination on high prices only to be possible as an equilibrium for low values of the discount factor. In particular, high discount factors increase opportu...

This paper provides an empirical analysis of the long-run market shares of four ENERGY STAR (ES) appliances in the United States: refrigerators, dishwashers, clothes washers, and room air conditioners. We relate state-level market shares to electricity prices, demographics, and energy efficiency. We then use the results to estimate how a carbon pricing mechanism might influence the market share...

Housing is an important component of the consumption basket. Since both rental prices and goods prices are sticky, the literature suggests that optimal monetary policy should stabilize both types of prices, with the optimal weight on rental inflation proportional to the housing expenditure share. In a two-sector DSGE model with sticky rental prices and goods prices, however, we find that the op...

This paper considers the relation between immigration and prices for a large number of cities across the world over the period from 1990 to 2006. Immigration is shown to have a negative impact on international relative prices. A 10 percent increase in the share of immigrant workers in total employment decreases the prices of final goods and services by more than 2.5 percent. Our results suggest...

We study a framework where two duopolists compete repeatedly in prices and where chosen prices potentially affect future market shares, but certainly do not affect current sales. This assumption of consumer inertia causes (noncooperative) coordination on high prices only to be possible as an equilibrium for low values of the discount factor. In particular, high discount factors increase opportu...