Quantity-setting competition with differentiated goods under uncertain demand

We consider a quantity-setting duopoly model, and we study the decision to move first or second, by assuming that the firms produce differentiated goods and that there is some demand uncertainty. The competitive phase consists of two periods, and in either period, the firms can make a production decision that is irreversible. As far as the firms are allowed to choose (non-cooperatively) the period they make the decision, we study the circumstances that favour sequential rather than simultaneous decisions.

Long-run consumption risk with durable goods : UK evidence for equity and bond markets

"It is a widely accepted fact that the consumption-based capital asset pricing model (CCAPM) fails to provide a good explanation of many important features of the behaviour of financial market returns in a large range of countries over a long period of time. However, within a representative consumer/investor model, it is hard to see how the basic structure of the consumption based model can be safely abandoned." [introdução]

Symbolic dynamics and big bang bifurcation in Weibull-Gompertz-Fréchet's growth models

In this paper, motivated by the interest and relevance of the study of tumor growth models, a central point of our investigation is the study of the chaotic dynamics and the bifurcation structure of Weibull-Gompertz-Fréchet's functions: a class of continuousdefined one-dimensional maps. Using symbolic dynamics techniques and iteration theory, we established that depending on the properties of this class of functions in a neighborhood of a bifurcation point PBB, in a two-dimensional parameter space, there exists an order regarding how the infinite number of periodic orbits are born: the Sharkovsky ordering. Consequently, the corresponding symbolic sequences follow the usual unimodal kneading sequences in the topological ordered tree. We verified that under some sufficient conditions, Weibull-Gompertz-Fréchet's functions have a particular bifurcation structure: a big bang bifurcation point PBB. This fractal bifurcations structure is of the so-called "box-within-a-box" type, associated to a boxe ω1, where an infinite number of bifurcation curves issues from. This analysis is done making use of fold and flip bifurcation curves and symbolic dynamics techniques. The present paper is an original contribution in the framework of the big bang bifurcation analysis for continuous maps.

Strategic trade policy and signaling costs with differentiated goods

We consider a trade policy model, where the costs of the home firm are private information but can be signaled through the output levels of the firm to a foreign competitor and a home policymaker. We compute the separating equilibrium and the Bayesian Nash equilibrium, and we compare the subsidies, firms’ expected profits and home government’s welfare in both equilibria, for different values of the own price effect parameter.

Continuous improvement logidtics project: A study on the increase of the finished goods warehouse of Unilever at Sta. Iria

This project is called Improvement Logistics Project and aims to study an opportunity of expansion of the output in 80% of the Unilever warehouse at Sta. Iria via an increase in exportations for the next two years. This has been done using the Distibuidora Luís Simões tariff rates as basis of comparison for the as-is and to-be situations. For this matter, an allocation of all the costs of the warehouse is prepared and described with the goal of comparing the differences with and without expansion. The results show that a better outcome is achieved with the investment, but the warehouse is yet to prove its efficiency against the distribution company.

On the provision of global public goods : experimental evidence on climate change mitigation issues

Magdeburg, Univ., Fak. für Wirtschaftswiss., Diss., 2011

Endogenous integration and welfare in complementary goods markets

This paper analyzes the strategic decision to integrate by firms that produce complementary products. Integration entails bundling pricing. We find out that integration is privately profitable for a high enough degree of product differentiation, that profits of the non-integrated firms decrease, and that consumer surplus need not necessarily increase when firms integrate despite the fact that prices diminish. Thus, integration of a system is welfare-improving for a high enough degree of product differentiation combined with a minimum demand advantage relative to the competing system. Overall, and from a number of extensions undertaken, we conclude that bundling need not be anti-competitive and that integration should be permitted only under some circumstances.

Double implementation in a market for indivisible goods with a price constraint

I consider the problem of assigning agents to objects where each agent must pay the price of the object he gets and prices must sum to a given number. The objective is to select an assignment-price pair that is envy-free with respect to the true preferences. I prove that the proposed mechanism will implement both in Nash and strong Nash the set of envy-free allocations. The distinguishing feature of the mechanism is that it treats the announced preferences as the true ones and selects an envy-free allocation with respect to the announced preferences.

Manipulation via endowments in exchange markets with indivisible goods

We consider exchange markets with heterogeneous indivisible goods. We are interested in exchange rules that are efficient and immune to manipulations via endowments (either with respect to hiding or destroying part of the endowment or transferring part of the endowment to another trader). We consider three manipulability axioms: hiding-proofness, destruction-proofness, and transfer-proofness. We prove that no rule satisfying efficiency and hiding-proofness (which implies individual rationality) exists. For two-agent exchange markets with separable and responsive preferences, we show that efficient, individually rational, and destruction-proof rules exist. However, for separable preferences, no rule satisfies efficiency, individual rationality, and destruction-proofness. In the case of transfer-proofness the compatibility with efficiency and individual rationality for the two-agent case extends to the unrestricted domain. For exchange markets with separable preferences and more than two agents no rule satisfies efficiency, individual rationality, and transfer-proofness.

Social capital and government in the production of public goods

As a response to the rapidly growing empirical literature on social capital and the evidence of its correlation with government performance, we build a theoretical framework to study the interactions between social capital and government's action. This paper presents a model of homogeneous agents in an overlapping generations framework incorporating social capital as the values transmitted from parent to child. The government's role is to provide public goods. First, government expenditure is exogenously given. Then, it will be chosen at the preferred level of the representative agent. For both setups the equilibrium outcomes are characterized and the resulting dynamics studied. Briefly we include an analysis of the effect of productivity growth on the evolution of social capital. The results obtained caution caution against both the crowding out effect of the welfare state and the impact of sustained economic growth on social capital.

Communication for Public Goods

This paper studies information transmission between multiple agents with di¤erent preferences and a welfare maximizing decision maker who chooses the quality or quantity of a public good (e.g. provision of public health service; carbon emissions policy; pace of lectures in a classroom) that is consumed by all of them. Communication in such circumstances suffers from the agents' incentive to "exaggerate" their preferences relative to the average of the other agents, since the decision maker's reaction to each agent's message is weaker than in one-to-one communication. As the number of agents becomes larger the quality of information transmission diminishes. The use of binary messages (e.g. "yes" or "no") is shown to be a robust mode of communication when the main source of informational distortion is exaggeration.

The long run relationship between stock prices and goods prices: new evidence from panel cointegration

We examine the long run relationship between stock prices and goods prices to gauge whether stock market investment can hedge against inflation. Data from sixteen OECD countries over the period 1970-2006 are used. We account for different inflation regimes with the use of sub-sample regressions, whilst maintaining the power of tests in small sample sizes by combining time-series data across our sample countries in a panel unit root and panel cointegration econometric framework. The evidence supports a positive long-run relationship between goods prices and stock prices with the estimated goods price coefficient being in line with the generalized Fisher hypothesis.

Development Accounting with Intermediate Goods

Do intermediate goods help explain relative and aggregate productivity differences across countries? Three observations suggest they do: (i) intermediates are relatively expensive in poor countries; (ii) goods industries demand intermediates more intensively than service industries; (iii) goods industries are more prominent intermediate suppliers in poor countries. I build a standard multi-sector growth model accommodating these features to show that inefficient intermediate production strongly depresses aggregate labor productivity and increases the price ratio of final goods to services. Applying the model to data, low and high income countries in fact reveal similar relative efficiency levels between goods and services despite clear differences in relative sectoral labor productivity. Moreover, the main empirical exercise suggests that poorer countries are substantially less efficient at producing intermediate relative to final goods and services. Closing the cross-country efficiency gap in intermediate input production would strongly narrow the aggregate labor productivity difference across countries as well as turn final goods in poorer countries relatively cheap compared to services.