Long run relationships and price rigidity

I study a repeated buyer-seller relationship for the exchange of a givengood. Asymmetric information over the buyer's reservation price, which issubject to random shocks, may lead the seller to use a rigid pricing policydespite the possibility of making higher profits through price discriminationacross the different satates of the buyer's reservation price. The existence of a flexible price subgame perfect equilibrium is shown for the buyerssufficiently locked-in. When the seller faces a population of buyers whose degree of involvmentin the relatioship is unknown, the flexible price equilibrium is notnecessarily optimal. Thus tipically the seller will prefer to use therigid price strategy. A learning process allowing the seller to screenthe population of buyers is derived abd the existence of a switching pointbetween the two regimes (i.e. price rigidity and price felxibility) isshown.

Increasing political returns and rural-urban migrations

This paper analyzes the different equilibria in rural-urban migrationsand political redistribution that result from the interaction betweenincreasing political returns, the distribution of land, and creditmarket imperfections. Governments that put a special weight on thewelfare of urban workers when setting agricultural prices generate apolitical externality in the urban sector, giving peasants anincentive to migrate in anticipation of policy determination. Ifcredit markets are imperfect, land ownership confers higherproductivity to peasants, who require large price changes to migrate.In this context, land inequality would lead to large migrations and tolarge policy change, while an egalitarian land distribution would leadto no migration and to a small policy change. This interaction shedslight on the contrasting experience of Latin America and East Asia atthe outset of World War II.

Endogenous information structures

Many models in the economics literature deal with strategic situations withprivately informed agents. In those models the information structure isassumed to be exogenous and common knowledge. We consider whether suchmodels, and the results they produce, are robust with respect theendogenization of the information structure. The results depend on whetherinformation acquisition is secret or private, and on whether the strategicsituation involves simultaneous or sequential moves. In particular we findthat only when information is secretly acquired and moves are simultaneous,the results are fully robust. When information is acquired secretly butmoves are sequential additional equilibria may appear. Instead, privateinformation acquisition may make the equilibrium set smaller.

First price auctions: Monotonicity and uniqueness

I study monotonicity and uniqueness of the equilibrium strategies in a two-person first price auction with affiliated signals. I show thatwhen the game is symmetric there is a unique Nash equilibrium thatsatisfies a regularity condition requiring that the equilibrium strategies be{\sl piecewise monotone}. Moreover, when the signals are discrete-valued, the equilibrium is unique. The central part of the proof consists of showing that at any regular equilibrium the bidders' strategies must be monotone increasing within the support of winning bids. The monotonicity result derived in this paper provides the missing link for the analysis of uniqueness in two-person first price auctions. Importantly, this result extends to asymmetric auctions.

Flexibility vs. rigidity: Does Spain have the worst of both worlds?

In this paper we study the structure of labor market flows in Spain and compare them with France and the US. We characterize a number of empirical regularities and stylized facts. One striking result is that the job finding rate is slightly higher than in France, while the jon loss rate is much higher, putting Spain half-way between France and the US. This suggests that while Spain has borne the full cost of its labor market reforms in terms of job precarity, the benefits in terms of job creation have been quite modest. We hypothesize that this has been due to the reform s credibility being imperfect, which leads toexpectation of reversal.

Unemployment insurance with endogenous search intensity and precautionary saving

A welfare analysis of unemployment insurance (UI) is performed in a generalequilibrium job search model. Finitely-lived, risk-averse workers smooth consumption over time by accumulating assets, choose search effort whenunemployed, and suffer disutility from work. Firms hire workers, purchasecapital, and pay taxes to finance worker benefits; their equity is the assetaccumulated by workers. A matching function relates unemployment, hiringexpenditure, and search effort to the formation of jobs. The model is calibrated to US data; the parameters relating job search effort to the probability of job finding are chosen to match microeconomic studies ofunemployment spells. Under logarithmic utility, numerical simulation shows rather small welfaregains from UI. Even without UI, workers smooth consumption effectivelythrough asset accumulation. Greater risk aversion leads to substantiallylarger welfare gains from UI; however, even in this case much of its welfareimpact is due not to consumption smoothing effects, but rather to decreased work disutility, or to a variety of externalities.

The macroeconomic effects of oil price shocks: Why are the 2000s so different from the 1970s?

We characterize the macroeconomic performance of a set of industrialized economies in the aftermath of the oil price shocks of the 1970s and of the last decade, focusing on the differences across episodes. We examine four different hypotheses for the mild effects on inflation and economic activity of the recent increase in the price of oil: (a) good luck (i.e. lack of concurrent adverse shocks), (b) smaller share of oil in production, (c) more flexible labor markets, and (d) improvements in monetary policy. Weconclude that all four have played an important role.

Report on a special investigation of the UNI Malcolm Price Laboratory School for the period July 1, 2006 through March 31, 2009

Report on a special investigation of the UNI Malcolm Price Laboratory School for the period July 1, 2006 through March 31, 2009

Improving electricity market price scenarios by means of forecasting factor models

In liberalized electricity markets, generation Companies must build an hourly bidthat is sent to the market operator. The price at which the energy will be paid is unknown during the bidding process and has to be forecast. In this work we apply forecasting factor models to this framework and study its suitability.

Expression and presentation of endogenous mouse mammary tumor virus superantigens by thymic and splenic dendritic cells and B cells.

Tolerance against superantigens (SAgs) encoded by endogenous mouse mammary tumor virus (Mtv) loci involves the intrathymic deletion of SAg-reactive T cells expressing a particular TCR V beta-chain, presumably upon presentation of the SAg by specialized APC. However, although the role of dendritic cells (DC) in the induction of tolerance against conventional Ags has been demonstrated, little is known about the role played by DC in tolerance induction against Mtv SAgs. Moreover, there is conflicting evidence concerning the capacity of DC to express and present Mtv SAgs. In this report we have analyzed the expression of Mtv SAgs in highly purified thymic and splenic DC and B cells by reverse transcriptase-PCR, using primers amplifying Mtv SAg-specific spliced mRNAs. DC express Mtv SAgs at levels comparable to B cells, but display a differential expression pattern of the various Mtv loci compared with B cells. Furthermore, our results show that DC are able to induce the deletion of SAg-reactive thymocytes in an in vitro assay, indicating that Mtv SAgs are functionally expressed on the DC surface. Collectively, our data are consistent with the hypothesis that DC play a role in the induction of intrathymic tolerance to Mtv SAgs.

Monetary policy and rational asset price bubbles

I examine the impact of alternative monetary policy rules on arational asset price bubble, through the lens of an overlapping generations model with nominal rigidities. A systematic increase in interestrates in response to a growing bubble is shown to enhance the fluctuations in the latter, through its positive effect on bubble growth. Theoptimal monetary policy seeks to strike a balance between stabilization of the bubble and stabilization of aggregate demand. The paper'smain findings call into question the theoretical foundations of the casefor "leaning against the wind" monetary policies.

Optimal public rationing and price response.

We study optimal public health care rationing and private sector price responses. Consumers differ in their wealth and illness severity (defined as treatment cost). Due to a limited budget, some consumers must be rationed. Rationed consumers may purchase from a monopolistic private market. We consider two information regimes. In the first, the public supplier rations consumers according to their wealth information (means testing). In equilibrium, the public supplier must ration both rich and poor consumers. Rationing some poor consumers implements price reduction in the private market. In the second information regime, the public supplier rations consumers according to consumers' wealth and cost information. In equilibrium, consumers are allocated the good if and only if their costs are below a threshold (cost effectiveness). Rationing based on cost results in higher equilibrium consumer surplus than rationing based on wealth.

Investigations on hydrogen isotope ratios of endogenous urinary steroids: reference-population-based thresholds and proof-of-concept.

Carbon isotope ratio (CIR) analysis has been routinely and successfully used in sports drug testing for many years to uncover the misuse of endogenous steroids. One limitation of the method is the availability of steroid preparations exhibiting CIRs equal to endogenous steroids. To overcome this problem, hydrogen isotope ratios (HIR) of endogenous urinary steroids were investigated as a potential complement; results obtained from a reference population of 67 individuals are presented herein. An established sample preparation method was modified and improved to enable separate measurements of each analyte of interest where possible. From the fraction of glucuronidated steroids; pregnanediol, 16-androstenol, 11-ketoetiocholanolone, androsterone (A), etiocholanolone (E), dehydroepiandrosterone (D), 5α- and 5β-androstanediol, testosterone and epitestosterone were included. In addition, sulfate conjugates of A, E, D, epiandrosterone and 17α- and 17β-androstenediol were considered and analyzed after acidic solvolysis. The obtained results enabled the calculation of the first reference-population-based thresholds for HIR of urinary steroids that can readily be applied to routine doping control samples. Proof-of-concept was accomplished by investigating urine specimens collected after a single oral application of testosterone-undecanoate. The HIR of most testosterone metabolites were found to be significantly influenced by the exogenous steroid beyond the established threshold values. Additionally, one regular doping control sample with an extraordinary testosterone/epitestosterone ratio of 100 without suspicious CIR was subjected to the complementary methodology of HIR analysis. The HIR data eventually provided evidence for the exogenous origin of urinary testosterone metabolites. Despite further investigations on HIR being advisable to corroborate the presented reference-population-based thresholds, the developed method proved to be a new tool supporting modern sports drug testing procedures.