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.

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.

Reputation and honesty in a market for information

Previous works on asymmetric information in asset markets tendto focus on the potential gains in the asset market itself. We focus on the market for information and conduct an experimental study to explore, in a game of finite but uncertain duration, whether reputation can be an effective constraint on deliberate misinformation. At the beginning of each period, an uninformed potential asset buyer can purchase information, at a fixed price and from a fully-informed source, about the value of the asset in that period. The informational insiders cannot purchase the asset and are given short-term incentives to provide false information when the asset value is low. Our model predicts that, in accordance with the Folk Theorem, Pareto-superior outcomes featuring truthful revelation should be sustainable. However, this depends critically on beliefs about rationality and behavior. We find that, overall, sellers are truthful 89% of the time. More significantly, the observed frequency of truthfulness is 81% when the asset value is low. Our result is consistent with both mixed-strategy and trigger strategy interpretations and provides evidence that most subjects correctly anticipate rational behavior. We discuss applications to financial markets, media regulation, and the stability of cartels.

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.

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.

Ecological temporal stability of Staphylococcus aureus nasal carriage.

We described the colonization dynamics of Staphylococcus aureus in a group of 266 healthy carriers over a period of approximately 1 year. We used precise genotyping methods, i.e., amplified fragment length polymorphism (AFLP), spa typing, and double-locus sequence typing (DLST), to detect changes in strain identity. Strain change took place rather rarely: out of 89 carriers who had initially been colonized, only 7 acquired a strain different from the original one. Approximately one-third of the carriers eliminated the colonization, and a similar number became newly colonized. Some of these events probably represent detection failure rather than genuine colonization loss or acquisition. Lower bacterial counts were associated with increased probability of eliminating the colonization. We have confirmed a high mutation rate in the spa locus: 6 out of 53 strains underwent mutation in the spa locus. There was no overall change in S. aureus genotype composition.

Second differential of the entropy as a criterion for the stability in low-dimensional climate models

The second differential of the entropy is used for analysing the stability of a thermodynamic climatic model. A delay time for the heat flux is introduced whereby it becomes an independent variable. Two different expressions for the second differential of the entropy are used: one follows classical irreversible thermodynamics theory; the second is related to the introduction of response time and is due to the extended irreversible thermodynamics theory. the second differential of the classical entropy leads to unstable solutions for high values of delay times. the extended expression always implies stable states for an ice-free earth. When the ice-albedo feedback is included, a discontinuous distribution of stable states is found for high response times. Following the thermodynamic analysis of the model, the maximum rates of entropy production at the steady state are obtained. A latitudinally isothermal earth produces the extremum in global entropy production. the material contribution to entropy production (by which we mean the production of entropy by material transport of heat) is a maximum when the latitudinal distribution of temperatures becomes less homogeneous than present values

PCAF regulates the stability of the transcriptional regulator and cyclin-dependent kinase inhibitor p27Kip1

P27(Kip1) (p27) is a member of the Cip/Kip family of cyclin-dependent kinase inhibitors. Recently, a new function of p27 as transcriptional regulator has been reported. It has been shown that p27 regulates the expression of target genes mostly involved in splicing, cell cycle, respiration and translation. We report here that p27 directly binds to the transcriptional coactivator PCAF by a region including amino acids 91-120. PCAF associates with p27 through its catalytic domain and acetylates p27 at lysine 100. Our data showed that overexpression of PCAF induces the degradation of p27 whereas in contrast, the knockdown of PCAF stabilizes the protein. A p27 mutant in which K100 was substituted by arginine (p27-K100R) cannot be acetylated by PCAF and has a half-life much higher than that of p27WT. Moreover, p27-K100R remains stable along cell-cycle progression. Ubiquitylation assays and the use of proteasome inhibitors indicate that PCAF induces p27 degradation via proteasome. We also observed that knockdown of skp2 did not affect the PCAF induced degradation of p27. In conclusion, our data suggest that the p27 acetylation by PCAF regulates its stability.