Experimental duopolies under price guarantees

In a symmetric differentiated experimental duopoly we test the ability of Price Guarantees (PGs) to raise prices above the competitive levels. Different types of PGs (‘aggressive’ and ‘soft’ price-beating and price-matching) are implemented either as an exogenously imposed market rule or as a business strategy. Our results show that PGs may lead close to the collusive outcome, depending on whether the interaction between duopolists is repeated and provided that the guarantee is not of the ‘aggressive’ price-beating type.

Pro-competitive price beating guarantees: experimental evidence

We report experimental results on duopoly pricing with and without price beating guarantees (PBG). In two control treatments, price beating is either imposed as an industry-wide rule or offered as a business strategy. Our major finding is that when price beating guarantees are imposed as a rule or offered as an option, effective prices are equal to or lower than those in a baseline treatment in which price beating is forbidden. Also, when price beating is treated as a business strategy, less than 50% of subjects adopted the guarantee, suggesting that, subjects realize the pro-competitive effects of the guarantee.

Identified consumers: an experiment on the informativeness of cross-demand price effects

Often, firms have no information on the specification of the true demand model they are faced with. It is, however, a well established fact that trial-and-error algorithms may be used by them in order to learn how to make optimal decisions. Using experimental methods, we identify a property of the information on past actions which helps the seller of two asymmetric demand substitutes to reach the optimal prices more precisely and faster. The property concerns the possibility of disaggregating changes in each product’s demand into client exit/entry and shift from one product to the other.

Adaptive behavior by single-product and multiproduct price setting firms in experimental markets

We focus on the learning dynamics in multiproduct price-setting markets, where firms use past strategies and performance to adapt to the corresponding equilibrium.

Assessing the impact on chronic disease of incorporating the societal cost of greenhouse gases into the price of food: an econometric and comparative risk assessment modelling study

Objectives To model the impact on chronic disease of a tax on UK food and drink that internalises the wider costs to society of greenhouse gas (GHG) emissions and to estimate the potential revenue. Design An econometric and comparative risk assessment modelling study. Setting The UK. Participants The UK adult population. Interventions Two tax scenarios are modelled: (A) a tax of £2.72/tonne carbon dioxide equivalents (tCO2e)/100 g product applied to all food and drink groups with above average GHG emissions. (B) As with scenario (A) but food groups with emissions below average are subsidised to create a tax neutral scenario. Outcome measures Primary outcomes are change in UK population mortality from chronic diseases following the implementation of each taxation strategy, the change in the UK GHG emissions and the predicted revenue. Secondary outcomes are the changes to the micronutrient composition of the UK diet. Results Scenario (A) results in 7770 (95% credible intervals 7150 to 8390) deaths averted and a reduction in GHG emissions of 18 683 (14 665to 22 889) ktCO2e/year. Estimated annual revenue is £2.02 (£1.98 to £2.06) billion. Scenario (B) results in 2685 (1966 to 3402) extra deaths and a reduction in GHG emissions of 15 228 (11 245to 19 492) ktCO2e/year. Conclusions Incorporating the societal cost of GHG into the price of foods could save 7770 lives in the UK each year, reduce food-related GHG emissions and generate substantial tax revenue. The revenue neutral scenario (B) demonstrates that sustainability and health goals are not always aligned. Future work should focus on investigating the health impact by population subgroup and on designing fiscal strategies to promote both sustainable and healthy diets.

Futures trading, spot price volatility and market efficiency: evidence from European real estate securities futures

In 2007 futures contracts were introduced based upon the listed real estate market in Europe. Following their launch they have received increasing attention from property investors, however, few studies have considered the impact their introduction has had. This study considers two key elements. Firstly, a traditional Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model, the approach of Bessembinder & Seguin (1992) and the Gray’s (1996) Markov-switching-GARCH model are used to examine the impact of futures trading on the European real estate securities market. The results show that futures trading did not destabilize the underlying listed market. Importantly, the results also reveal that the introduction of a futures market has improved the speed and quality of information flowing to the spot market. Secondly, we assess the hedging effectiveness of the contracts using two alternative strategies (naïve and Ordinary Least Squares models). The empirical results also show that the contracts are effective hedging instruments, leading to a reduction in risk of 64 %.

Testing for bubbles in indirect property price cycles

Speculative bubbles are generated when investors include the expectation of the future price in their information set. Under these conditions, the actual market price of the security, that is set according to demand and supply, will be a function of the future price and vice versa. In the presence of speculative bubbles, positive expected bubble returns will lead to increased demand and will thus force prices to diverge from their fundamental value. This paper investigates whether the prices of UK equity-traded property stocks over the past 15 years contain evidence of a speculative bubble. The analysis draws upon the methodologies adopted in various studies examining price bubbles in the general stock market. Fundamental values are generated using two models: the dividend discount and the Gordon growth. Variance bounds tests are then applied to test for bubbles in the UK property asset prices. Finally, cointegration analysis is conducted to provide further evidence on the presence of bubbles. Evidence of the existence of bubbles is found, although these appear to be transitory and concentrated in the mid-to-late 1990s.

Tests of non-linearity using LIFFE futures transactions price data

This paper presents and implements a number of tests for non-linear dependence and a test for chaos using transactions prices on three LIFFE futures contracts: the Short Sterling interest rate contract, the Long Gilt government bond contract, and the FTSE 100 stock index futures contract. While previous studies of high frequency futures market data use only those transactions which involve a price change, we use all of the transaction prices on these contracts whether they involve a price change or not. Our results indicate irrefutable evidence of non-linearity in two of the three contracts, although we find no evidence of a chaotic process in any of the series. We are also able to provide some indications of the effect of the duration of the trading day on the degree of non-linearity of the underlying contract. The trading day for the Long Gilt contract was extended in August 1994, and prior to this date there is no evidence of any structure in the return series. However, after the extension of the trading day we do find evidence of a non-linear return structure.

MALDI mass spectrometry in prostate cancer biomarker discovery

Matrix-assisted laser desorption/ionisation (MALDI) mass spectrometry (MS) is a highly versatile and sensitive analytical technique, which is known for its soft ionisation of biomolecules such as peptides and proteins. Generally, MALDI MS analysis requires little sample preparation, and in some cases like MS profiling it can be automated through the use of robotic liquid-handling systems. For more than a decade now, MALDI MS has been extensively utilised in the search for biomarkers that could aid clinicians in diagnosis, prognosis, and treatment decision making. This review examines the various MALDI-based MS techniques like MS imaging, MS profiling and proteomics in-depth analysis where MALDI MS follows fractionation and separation methods such as gel electrophoresis, and how these have contributed to prostate cancer biomarker research. This article is part of a Special Issue entitled: Biomarkers: A Proteomic Challenge.

Information sources, ICTs and price information in rural agricultural markets

The spread and rapid uptake of mobile telephony in Sub-Saharan Africa has highlighted the potential role of Information Communication Technologies in improving market participation and welfare outcomes for farm producers in agricultural produce markets. This article explores the influence of different sources of information and transmission technologies on the quantum and reliability of market information flowing to farm producers, based on a survey of farm households in northern Ghana. Our results suggest that the principal role of radio broadcasts and mobile telephony is in providing a broader knowledge of markets by enhancing the quantum of market information flowing to farm producers. They do not, however, appear to have a significant impact on the quality/reliability of price information obtained by farmers for making marketing decisions. Information sources appear to be the chief determinant of the reliability of price information, with price information obtained from extension agents being the most credible. Our results provide some useful insights for the design and implementation of Market Information Systems aimed at encouraging market participation by rural farm producers in agricultural markets.

Residential property loans and bank performance during property price booms: evidence from Europe

Understanding the performance of banks is of the utmost importance due to the impact the sector may have on economic growth and financial stability. Residential mortgage loans constitute a large proportion of the portfolio of many banks and are one of the key assets in the determination of their performance. Using a dynamic panel model, we analyse the impact of residential mortgage loans on bank profitability and risk, based on a sample of 555 banks in the European Union (EU-15), over the period from 1995 to 2008. We find that an increase in residential mortgage loans seems to improve bank’s performance in terms of both profitability and credit risk in good market, pre-financial crisis, conditions. These findings may aid in explaining why banks rush to lend to property during booms because of the positive effect it has on performance. The results also show that credit risk and profitability are lower during the upturn in the residential property cycle.

Commodity price dynamics and derivatives valuation: a review

This paper reviews extant research on commodity price dynamics and commodity derivatives pricing models. In the first half, we provide an overview of stylized facts of commodity price behavior that have been explored and documented in the theoretical and empirical literature. In the second half, we review existing derivatives pricing models and discuss how the peculiarities of commodity markets have been integrated in these models. We conclude the paper with a brief outlook on important research questions that need to be addressed in the future.

Information analytics for healthcare service discovery

The concept of being ‘patient-centric’ is a challenge to many existing healthcare service provision practices. This paper focuses on the issue of referrals, where multiple stakeholders, i.e. general practitioners and patients, are encouraged to make a consensual decision based on patient needs. In this paper, we present an ontology-enabled healthcare service provision, which facilitates both patients and GPs in jointly deciding upon the referral decision. In the healthcare service provision model, we define three types of profile, which represents different stakeholders’ requirements. This model also comprises of a set of healthcare service discovery processes: articulating a service need, matching the need with the healthcare service offerings, and deciding on a best-fit service for acceptance. As a result, the healthcare service provision can carry out coherent analysis using personalised information and iterative processes that deal with requirements change over time.

Hierarchical clustering based web service discovery

This paper presents a hierarchical clustering method for semantic Web service discovery. This method aims to improve the accuracy and efficiency of the traditional service discovery using vector space model. The Web service is converted into a standard vector format through the Web service description document. With the help of WordNet, a semantic analysis is conducted to reduce the dimension of the term vector and to make semantic expansion to meet the user’s service request. The process and algorithm of hierarchical clustering based semantic Web service discovery is discussed. Validation is carried out on the dataset.

Discovery of a mammalian splice variant of myostatin that stimulates myogenesis

Myostatin plays a fundamental role in regulating the size of skeletal muscles. To date, only a single myostatin gene and no splice variants have been identified in mammals. Here we describe the splicing of a cryptic intron that removes the coding sequence for the receptor binding moiety of sheep myostatin. The deduced polypeptide sequence of the myostatin splice variant (MSV) contains a 256 amino acid N-terminal domain, which is common to myostatin, and a unique C-terminus of 65 amino acids. Western immunoblotting demonstrated that MSV mRNA is translated into protein, which is present in skeletal muscles. To determine the biological role of MSV, we developed an MSV over-expressing C2C12 myoblast line and showed that it proliferated faster than that of the control line in association with an increased abundance of the CDK2/Cyclin E complex in the nucleus. Recombinant protein made for the novel C-terminus of MSV also stimulated myoblast proliferation and bound to myostatin with high affinity as determined by surface plasmon resonance assay. Therefore, we postulated that MSV functions as a binding protein and antagonist of myostatin. Consistent with our postulate, myostatin protein was co-immunoprecipitated from skeletal muscle extracts with an MSV-specific antibody. MSV over-expression in C2C12 myoblasts blocked myostatin-induced Smad2/3-dependent signaling, thereby confirming that MSV antagonizes the canonical myostatin pathway. Furthermore, MSV over expression increased the abundance of MyoD, Myogenin and MRF4 proteins (P,0.05), which indicates that MSV stimulates myogenesis through the induction of myogenic regulatory factors. To help elucidate a possible role in vivo, we observed that MSV protein was more abundant during early post-natal muscle development, while myostatin remained unchanged, which suggests that MSV may promote the growth of skeletal muscles. We conclude that MSV represents a unique example of intra-genic regulation in which a splice variant directly antagonizes the biological activity of the canonical gene product.