Losses from Horizontal Merger: an Extension to a Successive Oligopoly Model with Product Differentiation

This paper generalizes the model of Salant et al. (1983; Quarterly Journal of Economics, Vol. 98, pp. 185–199) to a successive oligopoly model with product differentiation. Upstream firms produce differentiated goods, retailers compete in quantities, and supply contracts are linear. We show that if retailers buy from all producers, downstream mergers do not affect wholesale prices. Our result replicates that of Salant's, where mergers are not profitable unless the size of the merged firm exceeds 80 per cent of the industry. This result is robust to the type of competition.

On the construction of new bent functions from the max-weight and min-weight functions of old bent functions

Given a bent function f (x) of n variables, its max-weight and min-weight functions are introduced as the Boolean functions f + (x) and f − (x) whose supports are the sets {a ∈ Fn2 | w( f ⊕la) = 2n−1+2 n 2 −1} and {a ∈ Fn2 | w( f ⊕la) = 2n−1−2 n 2 −1} respectively, where w( f ⊕ la) denotes the Hamming weight of the Boolean function f (x) ⊕ la(x) and la(x) is the linear function defined by a ∈ Fn2 . f + (x) and f − (x) are proved to be bent functions. Furthermore, combining the 4 minterms of 2 variables with the max-weight or min-weight functions of a 4-tuple ( f0(x), f1(x), f2(x), f3(x)) of bent functions of n variables such that f0(x) ⊕ f1(x) ⊕ f2(x) ⊕ f3(x) = 1, a bent function of n + 2 variables is obtained. A family of 4-tuples of bent functions satisfying the above condition is introduced, and finally, the number of bent functions we can construct using the method introduced in this paper are obtained. Also, our construction is compared with other constructions of bent functions.

Life-cycle portfolio choice with liquid and illiquid financial assets

Traditionally, quantitative models that have studied households׳ portfolio choices have focused exclusively on the different risk properties of alternative financial assets. We introduce differences in liquidity across assets in the standard life-cycle model of portfolio choice. More precisely, in our model, stocks are subject to transaction costs, as considered in recent macroliterature. We show that when these costs are calibrated to match the observed infrequency of households׳ trading, the model is able to generate patterns of portfolio stock allocation over age and wealth that are constant or moderately increasing, thus more in line with the existing empirical evidence.

Is financial instability male-driven? Gender and cognitive skills in experimental asset markets

The hypothesis that price stability would reliably increase with the fraction of women operating in financial markets has been frequently suggested in policy discussions. To test this hypothesis we conducted 10 male-only, 10 female-only and 10 mixed-gender experimental asset markets, and compared the effects of gender composition, confidence, risk attitude and cognitive skills. Male and female markets have comparable volatility and deviations from fundamentals, whereas mixed-gender markets are substantially more stable. On the other hand, higher average cognitive skills of the group are associated with reduced market volatility. Individual-level analysis shows that subjects with higher cognitive skills trade at prices closer to fundamental values and earn significantly higher profits; similarly, mixed markets exhibit lower mispricing, particularly for traders with lower cognitive skills. Our results are demonstrated to hold in other experimental asset market studies, suggesting that a mixed-gender composition reduces mispricing across different types of asset markets.

Export and import market-specific characteristics. How they drive the decision to trade and how much

Using a rich firm-level dataset on the Italian manufacturing industry, this paper provides a comprehensive analysis of the role that firms and market characteristics play in shaping firms’ trade activities. We enhance the previous analyses by considering firms’ engagement in international transactions, by focusing on either exports or imports. We show that the determinants of a firm’s export participation and value across countries also drive import behavior. Our research is consistent with the presence of country-specific sunk costs and with a qualitatively similar role of gravity forces and other country attributes on both sides of trading activities. Our evidence, however, militates in favor of a framework where variations in market characteristics have a larger impact on imports than exports.

How relevant is the origin of human capital for immigrant wages? Evidence from Spain

The objective of this article is to analyse the role played by the different components of human capital in the wage determination of immigrants in the Spanish labour market. Using microdata from the Encuesta Nacional de Inmigrantes, we find that human capital of immigrants acquired in Spain presents higher returns than human capital obtained in home countries, reflecting the limited international transferability of the latter. This result is reinforced by the strong heterogeneity observed in wage returns to different kinds of human capital across immigrants from different origins and, in particular, by the fact that immigrants with the higher returns to human capital acquired in their home countries are those coming from other developed countries and Latin America, the two regions more similar to Spain in terms of development and/or culture.

Exploring the relationship between educational mismatch, earnings and job satisfaction in the tourism industry

This article analyses the interrelationship between educational mismatch, wages and job satisfaction in the Spanish tourism sector in the first years of the global economic crisis. It is shown that there is a much higher incidence of over-education among workers in the Spanish tourism sector than in the rest of the economy despite this sector recording lower educational levels. This study estimates two models to analyse the influence of the educational mismatch on wages and job satisfaction for workers in the tourism industry and for the Spanish economy as a whole. The first model shows that in the tourism sector, the wage penalty associated with over-education is approximately 10%. The second reveals that in the tourism sector the levels of satisfaction of over-educated workers are considerably lower than those corresponding to workers well assigned. With respect to the differences between tourism and the overall economy in both aspects, the wage penalty is substantially lower in the case of tourism industries and the effect of over-education on job satisfaction is very similar to that of the economy as a whole in a context where both wages and the private returns to education are considerably lower in the tourism sector.

Cost sharing solutions defined by non-negative eigenvectors

The problem of sharing a cost M among n individuals, identified by some characteristic ci∈R+,ci∈R+, appears in many real situations. Two important proposals on how to share the cost are the egalitarian and the proportional solutions. In different situations a combination of both distributions provides an interesting approach to the cost sharing problem. In this paper we obtain a family of (compromise) solutions associated to the Perron’s eigenvectors of Levinger’s transformations of a characteristics matrix A. This family includes both the egalitarian and proportional solutions, as well as a set of suitable intermediate proposals, which we analyze in some specific contexts, as claims problems and inventory cost games.

Metodologías docentes en asignaturas de Economía

En la presente memoria se recoge el trabajo realizado por los profesores integrantes de la red docente Metodologías docentes en asignaturas de Economía durante el curso académico 2014-2015. En esta memoria se analiza, por un lado, los determinantes de la habilidad cognitiva a partir de una base de datos de la Universidad de Alicante (UA) que recoge la información sobre alumnos que han participado en experimentos sociales en el periodo 2013-15. El análisis realizado confirma la importancia de medir la habilidad de los individuos precisamente, tomando en cuenta mecanismos cognitivos y psicológicos. De todas formas, el nivel preliminar del análisis y los datos obtenidos en experimentos no permiten generalizar los resultados antes de verificar en qué medida la muestra es representativa de los alumnos de la UA. Por otro lado, se describen las metodologías docentes aplicadas en varias asignaturas de Economía durante el curso 2014-15, así como los principales resultados obtenidos.