The Complete Information First. Price Auction or the Importance of Being Indivisible

Abstract Despite the popularity of auction theoretical thinking, it appears that no one has presented an elementary equilibrium analysis of the first-price sealed-bid auction mechanism under complete information. This paper aims to remedy that omission. We show that the existence of pure strategy undominated Nash equilibria requires that the bidding space is not "too divisible" (that is, a continuum). In fact, when bids must form part of a finite grid there always exists a "high price equilibrium". However, there might also be "low price equilibria" and when the bidding space is very restrictive the revenue obtained in these "low price equilibria" might be very low. We discuss the properties of the equilibria and an application of auction theoretical thinking in which "low price equilibria" may be relevant. Keywords: First-price auctions, undominated Nash equilibria. JEL Classification Numbers: C72 (Noncooperative Games), D44 (Auctions).

Estudi sobre la relació entre el preu i l’energia aportada per les piles

Treball de recerca realitzat per una alumna d’ensenyament secundari i guardonat amb un Premi CIRIT per fomentar l'esperit científic del Jovent l’any 2008. Existeixen al mercat una gran varietat de piles de diversos costos. Mitjançant un aproximació teòrica s’explica el concepte de pila, el seu funcionament i els tipus, així com també els fonaments teòrics per fer les mesures de l’energia de cada pila. Posteriorment s’ha mesurat l’energia de tretze piles per tal de: determinar quines són la pila més rendible i la menys rendible del mercat (entenent per rendible aquella que aporta més energia per menys preu, determinar si existeix alguna relació entre el preu i l’energia de les piles (és a dir, si la pila més cara és la que aporta més energia); i, finalment, comparar una pila salina, una pila alcalina i una pila de liti.

Requerimientos sectoriales de energía eléctrica en México. Una aplicación del concepto de entropía de Theil al análisis insumo-producto

La investigación estima los requerimientos sectoriales de energía eléctrica en México. Se utilizan tres metodologías: 1) la que calcula los requerimientos de energía primaria a través de los balances energéticos; 2) las necesidades de energía eléctrica obtenido del modelo insumo-producto y 3) el uso del índice de Theil y una medida de concentración con vínculos hacia delante y hacia atrás que mide el grado de inter-conectividad. Los altos valores de las entropías confirman que la importancia creciente del uso de energía disponible para la producción de la economía mexicana se debe a la gran integración de sus sectores productivos.

(No)competition in the Spanish retailing gasoline market: a variance filter approach

Various methodologies in economic literature have been used to analyse the international hydrocarbon retail sector. Nevertheless at a Spanish level these studies are much more recent and most conclude that generally there is no effective competition present in this market, regardless of the approach used. In this paper, in order to analyse the price levels in the Spanish petrol market, our starting hypothesis is that in uncompetitive markets the prices are higher and the standard deviation is lower. We use weekly retail petrol price data from the ten biggest Spanish cities, and apply Markov chains to fill the missing values for petrol 95 and diesel, and we also employ a variance filter. We conclude that this market demonstrates reduced price dispersion, regardless of brand or city.

Leading indicator properties of US high-yield credit spreads

In this paper we examine the out-of-sample forecast performance of high-yield credit spreads regarding real-time and revised data on employment and industrial production in the US. We evaluate models using both a point forecast and a probability forecast exercise. Our main findings suggest the use of few factors obtained by pooling information from a number of sector-specific high-yield credit spreads. This can be justified by observing that, especially for employment, there is a gain from using a principal components model fitted to high-yield credit spreads compared to the prediction produced by benchmarks, such as an AR, and ARDL models that use either the term spread or the aggregate high-yield spread as exogenous regressor. Moreover, forecasts based on real-time data are generally comparable to forecasts based on revised data. JEL Classification: C22; C53; E32 Keywords: Credit spreads; Principal components; Forecasting; Real-time data.

Market Competition and Lower Tier Incentives

The relationship between competition and performance-related pay has been analyzed in single-principal-single-agent models. While this approach yields good predictions for managerial pay schemes, the predictions fail to apply for employees at lower tiers of a firm's hierarchy. In this paper, a principal-multi-agent model of incentive pay is developed which makes it possible to analyze the effect of changes in the competitiveness of markets on lower tier incentive payment schemes. The results explain why the payment schemes of agents located at low and mid tiers are less sensitive to changes in competition when aggregated firm data is used. Journal of Economic Literature classiffication numbers: D82, J21, L13, L22. Keywords: Cournot Competition, Contract Delegation, Moral Hazard, Entry, Market Size, Wage Cost.

Congested hubs

Hub congestion is a major problem and a relevant policy issue because it causes delays and many organizational problems at airports that end up implying unpleasant consequences both for air travelers and airlines. In a competitive framework in which carriers choose aircraft size, this paper suggests that airlines schedule too many flights using overly small aircraft, which constitutes a major contributor to congestion. Two- part congestion tolls, accounting for the congestion imposed on other carriers and the congestion imposed on all passengers, are needed to recover e¢ ciency. Finally, we analyze the validity of the results by studying the effects of network size, airport capacity, competition in layover time, and the formation of airline alliances. Keywords: congestion; hub-and-spoke networks; overprovision of frequency; con- gestion internalization; congestion tolls JEL Classiffication Numbers: L13; L2; L93

Dispersión de precios en la industria de seguros sanitarios privados

Presentamos un modelo de diferenciación vertical y horizontal de productos que explica la dispersión de precios de la industria de seguros sanitarios con prestación de servicios en España. El modelo capta la competencia en precios de grandes aseguradoras con pequeñas mutualidades de ámbito local y establece que las primeras cargan, en general, primas mayores. También obtenemos que, aunque el mercado permite la entrada de un número excesivo de empresas, la presencia de aseguradoras de ámbito local aumenta el bienestar social, al completar la gama de productos disponibles por los consumidores, a partir de unos reducidos costes de entrada en la industria. Organización industrial, seguros sanitarios, economía de la salud

Scheduled Service Versus Personal Transportation: The Role of Distance

This paper presents a theoretical and empirical analysis of the relationship be- tween frequency of scheduled transportation services and their substitutability with personal transportation (using distance as a proxy). We study the interaction between a monopoly firm providing a high-speed scheduled service and private transportation (i.e., car). Interestingly, the carrier chooses to increase the frequency of service on longer routes when competing with personal transportation because by providing higher frequency (at extra cost) it can also charge higher fares which can boost its profits. However, in line with the results of earlier studies, frequency decreases for longer flights when driving is not a viable option. An empirical application of our analysis to the European airline industry confirms the predictions of our theoretical model. Keywords: short-haul routes; long-haul routes; flight frequency; distance JEL Classification Numbers: L13; L2; L93

The international trade as the sole engine of growth for an economy

Can international trade act as the sole engine of growth for an economy? If yes, what are the mechanisms through which trade operates in transmitting permanent growth? This paper answers these questions with two simple two-country models, in which only one country enjoys sustained growth in autarky. The models differ in the assumptions on technical change, which is either labour- or capital-augmenting. In both cases, the stagnant economy imports growth by trading. In the first model, growth is transmitted because of permanent increases in the trade volume. In the alternative framework, the stagnant economy imports sustained growth because its terms of trade permanently improve.

Transmisión intergeneracional de la pobreza en Uruguay

El deterioro de los niveles de desigualdad y el empeoramiento de los niveles de pobreza que se registraron en Uruguay durante la crisis de comienzos del siglo XXI, tuvieron una especial repercusión en la infancia y la juventud, haciendo más vulnerable el futuro desempeño socioeconómico de las nuevas generaciones. El presente trabajo pretende ahondar en la existencia y extensión de la transmisión intergeneracional de la pobreza (TIP) en Uruguay. La ausencia de datos de panel impide la utilización de algunas de las metodologías más difundidas, como la correlación intergeneracional de ingresos, por lo cual se opta por centrar el análisis en la correlación intergeneracional educativa, mediante la utilización de la Encuesta Continua de Hogares del año 2005. Los resultados comprueban la existencia de correlación intergeneracional educativa en Uruguay, que se ubica por debajo de la registrada en la mayoría de los países de América Latina, y por encima de la registrada en los países más desarrollados. Para ahondar en los determinantes de la TIP se ha estimado un modelo de selección discreta que permite explicar la probabilidad de los jóvenes de terminar la enseñanza secundaria (umbral que permite situarse fuera de la situación de pobreza) en función de una serie de variables vinculadas con el entorno familiar. Se comprueba así la significativa importancia de la educación de los padres en la explicación de los resultados de los hijos, respaldando los enfoques teóricos del capital humano y de la transmisión de habilidades. El análisis también evidencia el efecto negativo de un mayor número de hermanos en la familia, comprobando la importancia del enfoque de cantidad calidad de Becker. Finalmente, los resultados permiten entrever la importancia de otros mecanismos de la TIP como la segregación residencial, el assortative mating y el embarazo adolescente.

Análisis del gasto de los turistas que acceden a España por avión

El sector turístico se ha convertido en una de las principales actividades económicas tanto a nivel regional, nacional como mundial. Por otro lado, el transporte aéreo ha contribuido en gran manera a este desarrollo, incluyendo potencias mundiales como España, donde tres de cada cuatro turistas acceden por este medio. Una de las razones que ha favorecido esta situación son las aerolíneas de bajo coste. En este trabajo se analizará y comparará el gasto y su distribución de los turistas que acceden a España con estas aerolíneas y con las tradicionales. Dicho conocimiento será de gran utilidad para el desarrollo de estrategias de promoción y marketing en el destino turístico, así como en la mejora de la caracterización del mismo.

Small firms, growth and financial constraints

This paper analyses the impact of different sources of finance on the growth of firms. Using panel data from Spanish manufacturing firms for the period 2000-2006, we investigate the effects of internal and external finances on firm growth. In particular, we examine three dimensions of these financial sources: a) the performance of the firms’ capital structure in accordance with firm size; b) the effects of internal and external financial sources on growth performance; c) the combined effect of equity, external debt and cash flow on firm growth. We find that low-growth firms are sensitive to cash flow and short-term bank debt, while high-growth firms are more sensitive to long-term debt. Furthermore, equity capital seems to reduce barriers to external finance. Our main conclusion is that during the start-up phase, firms are unable to increase their financial leverage and so their capital structure fails to promote correct investment strategies. However, as their equity capital increases, alternative financial mechanisms, in particular long-term debt, become available, which have a positive impact on firm growth.

Inter-regional redistribution through infrastructure investment: tactical or programmatic?

In this paper we analyze the effects of both tactical and programmatic politics on the inter-regional allocation of infrastructure investment. We use a panel of data for the Spanish electoral districts during the period 1964-2004 to estimate an equation where investment depends both on economic and political variables. The results show that tactical politics do matter since, after controlling for economic traits, the districts with more ‘Political power’ still receive more investment. These districts are those where the incumbents’ Vote margin of victory/ defeat in the past election is low, where the Marginal seat price is low, where there is Partisan alignment between the executives at the central and regional layers of government, and where there are Pivotal regional parties which are influential in the formation of the central executive. However, the results also show that programmatic politics matter, since inter-regional redistribution (measured as the elasticity of investment to per capita income) is shown to increase with the arrival of the Democracy and EU Funds, with Left governments, and to decrease the higher is the correlation between a measure of ‘Political power’ and per capita income.

The Commons and anti-commons problems in the tourism economy

Countries specialised in tourism tend to face two problems with contradictory effects: the commons and the anti-commons, which lead to tourism over- and under-production, respectively. This paper develops a two-period model to analyse the joint effects of both problems on a small and remote tourism economy. Congestion and the complementariness between foreign transport and local tourism services are key features in this type of markets. As a result, direct selling and the presence of foreign tour-operators emerge as possible market arrangements with different implications in terms of welfare and public intervention. Four main results are obtained. First, in the direct selling situation the optimal policy depends on the relative importance of the problems. Second, the existence of tour-operators always leads to tourism over-production. Third, the presence of a single tour-operator does not solve the congestion problem. Lastly, the switch from several tour-operators to a single one is welfare reducing.