Imperfect competition and market liquidity with a supply informed trader

We develop a model of insider trading where agents have private information either about liquidation value or about supply and behave strategically to maximize their profits. The supply informed trader plays a dual role in market making and in information revelation. This trader not only reveals a part of the information he owns, but he also induces the other traders to reveal more of their private information. The presence of different types of information decreases market liquidity and induces non-monotonicity of the market indicators with respect to the variance of liquidation value. Replacing the noise introduced by liquidity traders with a random supply also allows us to study the effect the shocks on different components of supply have on prices and quantities.

Co-movements between US and UK stock prices: the roles of macroeconomic information and time-series varying conditional correlations

This paper provides evidence on the sources of co-movement in monthly US and UK stock price movements by investigating the role of macroeconomic and financial variables in a bivariate system with time-varying conditional correlations. Crosscountry communality in response is uncovered, with changes in the US Federal Funds rate, UK bond yields and oil prices having similar negative effects in both markets. Other variables also play a role, especially for the UK market. These effects do not, however, explain the marked increase in cross-market correlations observed from around 2000, which we attribute to time variation in the correlations of shocks to these markets. A regime-switching smooth transition model captures this time variation well and shows the correlations increase dramatically around 1999-2000. JEL classifications: C32, C51, G15 Keywords: international stock returns, DCC-GARCH model, smooth transition conditional correlation GARCH model, model evaluation.

Overtime Working and Contract Efficiency

We present a wage-hours contract designed to minimize costly turnover given investments in specific training combined with firm and worker information asymmetries. It may be optimal for the parties to work ‘long hours’ remunerated at premium rates for guaranteed overtime hours. Based on British plant and machine operatives, we test three predictions. First, trained workers with longer tenure are more likely to work overtime. Second, hourly overtime pay exceeds the value of marginal product while the basic hourly wage is less than the value of marginal product. Third, the basic hourly wage is negatively related to the overtime premium.

The Minimum Safety Standard, Consumers’ Information, and Competition, February 2007

This paper explores the effects of a standard influencing care choice. Firm(s) may increase the probability of offering safe products by incurring a cost. Under duopoly, they compete either in prices or in quantities. Under perfect information about safety for consumers, the selected standard that corrects a safety underinvestment is always compatible with competition. Safety over investment only emerges under competition in quantities and relatively low values of the cost. Under imperfect information about safety for consumers, the standard leads to a monopoly situation. However, for relatively large values of the cost, a standard cannot impede the market failure coming from the lack of information.

Full insurance, asymmetric information and genetic testing

This paper extends previous resuls on optimal insurance trading in the presence of a stock market that allows continuous asset trading and substantial personal heterogeneity, and applies those results in a context of asymmetric informationwith references to the role of genetic testing in insurance markets.We find a novel and surprising result under symmetric information:agents may optimally prefer to purchase full insurance despitethe presence of unfairly priced insurance contracts, and other assets which are correlated with insurance.Asymmetric information has a Hirschleifer-type effect whichcan be solved by suspending insurance trading. Nevertheless,agents can attain their first best allocations, which suggeststhat the practice of restricting insurance not to be contingenton genetic tests can be efficient.

Patents in the Information and Communications Technology Sector - Development Trends, Problem Areas and Pressures for Change

The patent system was created for the purpose of promoting innovation by granting the inventors a legally defined right to exclude others in return for public disclosure. Today, patents are being applied and granted in greater numbers than ever, particularly in new areas such as biotechnology and information andcommunications technology (ICT), in which research and development (R&D) investments are also high. At the same time, the patent system has been heavily criticized. It has been claimed that it discourages rather than encourages the introduction of new products and processes, particularly in areas that develop quickly, lack one-product-one-patent correlation, and in which theemergence of patent thickets is characteristic. A further concern, which is particularly acute in the U.S., is the granting of so-called 'bad patents', i.e. patents that do not factually fulfil the patentability criteria. From the perspective of technology-intensive companies, patents could,irrespective of the above, be described as the most significant intellectual property right (IPR), having the potential of being used to protect products and processes from imitation, to limit competitors' freedom-to-operate, to provide such freedom to the company in question, and to exchange ideas with others. In fact, patents define the boundaries of ownership in relation to certain technologies. They may be sold or licensed on their ownor they may be components of all sorts of technology acquisition and licensing arrangements. Moreover, with the possibility of patenting business-method inventions in the U.S., patents are becoming increasingly important for companies basing their businesses on services. The value of patents is dependent on the value of the invention it claims, and how it is commercialized. Thus, most of them are worth very little, and most inventions are not worth patenting: it may be possible to protect them in other ways, and the costs of protection may exceed the benefits. Moreover, instead of making all inventions proprietary and seeking to appropriate as highreturns on investments as possible through patent enforcement, it is sometimes better to allow some of them to be disseminated freely in order to maximize market penetration. In fact, the ideology of openness is well established in the software sector, which has been the breeding ground for the open-source movement, for instance. Furthermore, industries, such as ICT, that benefit from network effects do not shun the idea of setting open standards or opening up their proprietary interfaces to allow everyone todesign products and services that are interoperable with theirs. The problem is that even though patents do not, strictly speaking, prevent access to protected technologies, they have the potential of doing so, and conflicts of interest are not rare. The primary aim of this dissertation is to increase understanding of the dynamics and controversies of the U.S. and European patent systems, with the focus on the ICT sector. The study consists of three parts. The first part introduces the research topic and the overall results of the dissertation. The second part comprises a publication in which academic, political, legal and business developments that concern software and business-method patents are investigated, and contentiousareas are identified. The third part examines the problems with patents and open standards both of which carry significant economic weight inthe ICT sector. Here, the focus is on so-called submarine patents, i.e. patentsthat remain unnoticed during the standardization process and then emerge after the standard has been set. The factors that contribute to the problems are documented and the practical and juridical options for alleviating them are assessed. In total, the dissertation provides a good overview of the challenges and pressures for change the patent system is facing,and of how these challenges are reflected in standard setting.

Improving Transportation and Warehousing Efficiency with Simulation-Based Decision Support Systems

Transportation and warehousing are large and growing sectors in the society, and their efficiency is of high importance. Transportation also has a large share of global carbondioxide emissions, which are one the leading causes of anthropogenic climate warming. Various countries have agreed to decrease their carbon emissions according to the Kyoto protocol. Transportation is the only sector where emissions have steadily increased since the 1990s, which highlights the importance of transportation efficiency. The efficiency of transportation and warehousing can be improved with the help of simulations, but models alone are not sufficient. This research concentrates on the use of simulations in decision support systems. Three main simulation approaches are used in logistics: discrete-event simulation, systems dynamics, and agent-based modeling. However, individual simulation approaches have weaknesses of their own. Hybridization (combining two or more approaches) can improve the quality of the models, as it allows using a different method to overcome the weakness of one method. It is important to choose the correct approach (or a combination of approaches) when modeling transportation and warehousing issues. If an inappropriate method is chosen (this can occur if the modeler is proficient in only one approach or the model specification is not conducted thoroughly), the simulation model will have an inaccurate structure, which in turn will lead to misleading results. This issue can further escalate, as the decision-maker may assume that the presented simulation model gives the most useful results available, even though the whole model can be based on a poorly chosen structure. In this research it is argued that simulation- based decision support systems need to take various issues into account to make a functioning decision support system. The actual simulation model can be constructed using any (or multiple) approach, it can be combined with different optimization modules, and there needs to be a proper interface between the model and the user. These issues are presented in a framework, which simulation modelers can use when creating decision support systems. In order for decision-makers to fully benefit from the simulations, the user interface needs to clearly separate the model and the user, but at the same time, the user needs to be able to run the appropriate runs in order to analyze the problems correctly. This study recommends that simulation modelers should start to transfer their tacit knowledge to explicit knowledge. This would greatly benefit the whole simulation community and improve the quality of simulation-based decision support systems as well. More studies should also be conducted by using hybrid models and integrating simulations with Graphical Information Systems.

Backpacker 2.0 - Contemporary backpackers and their use of social media as an information and communication platform

Long-term independent budget travel to countries far away has become increasingly common over the last few decades, and backpacking has now entered the tourism mainstream. Nowadays, backpackers are a very important segment of the global travel market. Backpacking is a type of tourism that involves a lot of information search activities. The Internet has become a major source of information as well as a platform for tourism business transactions. It allows travelers to gain information very effortlessly and to learn about tourist destinations and products directly from other travelers in the form of electronic word-of-mouth (eWOM). Social media has penetrated and changed the backpacker market, as now modern travelers can stay connected to people at home, read online recommendations, and organize and book their trips very independently. In order to create a wider understanding on modern-day backpackers and their information search and share behavior in the Web 2.0 era, this thesis examined contemporary backpackers and their use of social media as an information and communication platform. In order to achieve this goal, three sub-objectives were identified: 1. to describe contemporary backpacker tourism 2. to examine contemporary backpackers’ travel information search and share behavior 3. to explore the impacts of new information and communications technologies and Web 2.0 on backpacker tourism The empirical data was gathered with an online survey, thus the method of analysis was mainly quantitative, and a qualitative method was used for a brief analysis of open questions. The research included both descriptive and analytical approaches, as the goal was to describe modern-day backpackers, and to examine possible interdependencies between information search and share behavior and background variables. The interdependencies were tested for statistical significance with the help of five research hypotheses. The results suggested that backpackers no longer fall under the original backpacker definitions described some decades ago. Now, they are mainly short-term travelers, whose trips resemble more those of mainstream tourists. They use communication technologies very actively, and particularly social media. Traditional information sources, mainly guide books and recommendations from friends, are of great importance to them but also eWOM sources are widely used in travel decision making. The use of each source varies according to the stage of the trip. All in all, Web 2.0 and new ICTs have transformed the backpacker tourism industry in many ways. Although the experience has become less authentic in some travelers’ eyes, the backpacker culture is still recognizable.

Prediction of market switching and delisting events from OMX First North Nordic multilateral stock exchange

This thesis studies the predictability of market switching and delisting events from OMX First North Nordic multilateral stock exchange by using financial statement information and market information from 2007 to 2012. This study was conducted by using a three stage process. In first stage relevant theoretical framework and initial variable pool were constructed. Then, explanatory analysis of the initial variable pool was done in order to further limit and identify relevant variables. The explanatory analysis was conducted by using self-organizing map methodology. In the third stage, the predictive modeling was carried out with random forests and support vector machine methodologies. It was found that the explanatory analysis was able to identify relevant variables. The results indicate that the market switching and delisting events can be predicted in some extent. The empirical results also support the usability of financial statement and market information in the prediction of market switching and delisting events.

Re-engineering and Re-defining University Libraries in the context of modern Information and Communication Technologies: a study with special reference to the University Libraries in Kerala

Information and communication technologies are the tools that underpin the emerging “Knowledge Society”. Exchange of information or knowledge between people and through networks of people has always taken place. But the ICT has radically changed the magnitude of this exchange, and thus factors such as timeliness of information and information dissemination patterns have become more important than ever.Since information and knowledge are so vital for the all round human development, libraries and institutions that manage these resources are indeed invaluable. So, the Library and Information Centres have a key role in the acquisition, processing, preservation and dissemination of information and knowledge. ln the modern context, library is providing service based on different types of documents such as manuscripts, printed, digital, etc. At the same time, acquisition, access, process, service etc. of these resources have become complicated now than ever before. The lCT made instrumental to extend libraries beyond the physical walls of a building and providing assistance in navigating and analyzing tremendous amounts of knowledge with a variety of digital tools. Thus, modern libraries are increasingly being re-defined as places to get unrestricted access to information in many formats and from many sources.The research was conducted in the university libraries in Kerala State, India. lt was identified that even though the information resources are flooding world over and several technologies have emerged to manage the situation for providing effective services to its clientele, most of the university libraries in Kerala were unable to exploit these technologies at maximum level. Though the libraries have automated many of their functions, wide gap prevails between the possible services and provided services. There are many good examples world over in the application of lCTs in libraries for the maximization of services and many such libraries have adopted the principles of reengineering and re-defining as a management strategy. Hence this study was targeted to look into how effectively adopted the modern lCTs in our libraries for maximizing the efficiency of operations and services and whether the principles of re-engineering and- redefining can be applied towards this.Data‘ was collected from library users, viz; student as well as faculty users; library ,professionals and university librarians, using structured questionnaires. This has been .supplemented by-observation of working of the libraries, discussions and interviews with the different types of users and staff, review of literature, etc. Personal observation of the organization set up, management practices, functions, facilities, resources, utilization of information resources and facilities by the users, etc. of the university libraries in Kerala have been made. Statistical techniques like percentage, mean, weighted mean, standard deviation, correlation, trend analysis, etc. have been used to analyse data.All the libraries could exploit only a very few possibilities of modern lCTs and hence they could not achieve effective Universal Bibliographic Control and desired efficiency and effectiveness in services. Because of this, the users as well as professionals are dissatisfied. Functional effectiveness in acquisition, access and process of information resources in various formats, development and maintenance of OPAC and WebOPAC, digital document delivery to remote users, Web based clearing of library counter services and resources, development of full-text databases, digital libraries and institutional repositories, consortia based operations for e-journals and databases, user education and information literacy, professional development with stress on lCTs, network administration and website maintenance, marketing of information, etc. are major areas need special attention to improve the situation. Finance, knowledge level on ICTs among library staff, professional dynamism and leadership, vision and support of the administrators and policy makers, prevailing educational set up and social environment in the state, etc. are some of the major hurdles in reaping the maximum possibilities of lCTs by the university libraries in Kerala. The principles of Business Process Re-engineering are found suitable to effectively apply to re-structure and redefine the operations and service system of the libraries. Most of the conventional departments or divisions prevailing in the university libraries were functioning as watertight compartments and their existing management system was more rigid to adopt the principles of change management. Hence, a thorough re-structuring of the divisions was indicated. Consortia based activities and pooling and sharing of information resources was advocated to meet the varied needs of the users in the main campuses and off campuses of the universities, affiliated colleges and remote stations. A uniform staff policy similar to that prevailing in CSIR, DRDO, ISRO, etc. has been proposed by the study not only in the university libraries in kerala but for the entire country.Restructuring of Lis education,integrated and Planned development of school,college,research and public library systems,etc.were also justified for reaping maximum benefits of the modern ICTs.

Buyer information and brand Choice behavior in markets with asymmetries

This thesis Entitled Buyer information and brand choice behaviour in markets with asymmetries.The period of transition set in by globalization and liberalization has ensued a onsiderable degree of homogeneity with western societies with respect to quantity and quality of goods and services.The study is aimed at finding out how the buyers adapt to the prevalent complex and dynamic market configuration by taking an archetypical situation of information gathering and brand- choice decision of select household consumer durables.The study was based on a set of 301 sample respondents who were either first time purchasers or repeat purchasers for household use, of the items under study in the sample area comprising of rural, urban and semi-urban areas. Data were collected using interview schedule and analysis of the same was done with standard statistical computer programs.Buyer confidence as perceived by buyers with respect to information acquisition and brand-choice represents the felt competence to effectively function in the market.In general, lower levels of education, income and occupation showed lower levels of search. The oldest were also low searchers. The repeat purchasers of the product searched less than the first purchasers. The most important source of information was word of mouth or information from others followed by television advertisements. The least important source of information was billboards, displays and similar forms of advertisements.The second factor is characterized by items representing ‘social attributes’ like, use by many others, use by peers, recommendation by significant others and reputation of the brand. The third factor represents ‘susceptibility to incentives and promotions’.

The visibility of agricultural subsidies and market illusions in the Common Agricultural Policy: Some evidence from farmers' views in Germany, Portugal and the United Kingdom

This article demonstrates that the design and nature of agricultural support schemes has an influence on farmers' perception of their level of dependence on agricultural support. While direct aid payments inform farmers about the extent to which they are subsidised, indirect support mechanisms veil the level of subsidisation, and therefore they are not fully aware of the extent to which they are supported. To test this hypothesis, we applied data from a survey of 4,500 farmers in three countries: the United Kingdom, Germany and Portugal. It is demonstrated that indirect support, such as that provided through artificially high consumer prices, gives an illusion of free and competitive markets among farmers. This 'visibility' hypothesis is evaluated against an alternative hypothesis that assumes farmers have complete, or at least a fairly comprehensive level of, information on agricultural support schemes. Our findings show that this alternative hypothesis can be ruled out.

'Doctor, Doctor...' entrepreneurial diagnosis and market making

Doctor-patient jokes are universally popular because of the information asymmetries within the diagnostic relationship. We contend that entrepreneurial diagnosis is present in markets where consumers are unable to diagnose their own problems and, instead, may rely on the entrepreneur to diagnose them. Entrepreneurial diagnosis is a cognitive skill possessed by the entrepreneur. It is an identifiable subset of entrepreneurial judgment and can be modeled – which we attempt to do. In order to overcome the information asymmetries and exploit opportunities, we suggest that entrepreneurs must invest in market making innovations (as distinct from product innovations) such as trustworthy reputations. The diagnostic entrepreneur described in this paper represents a creative response to difficult diagnostic problems and helps to explain the success of many firms whose products are not particularly innovative but which are perceived as offering high standards of service. These firms are trusted not only for their truthfulness about the quality of their product, but for their honesty, confidentiality and understanding in helping customers identify the most appropriate product to their needs.

Mobile phones and radios: effects on transactions costs and market participation for households in Northern Ghana

The literature on agricultural markets suggests that transactions costs are the main obstacles preventing households from participating in agricultural markets. We examine the impact of the recent massive penetration of information communication technologies (ICTs), particularly mobile phones and radios, in developing countries to investigate the role of information in economic transactions and participation in food crop markets. To fully capture market participation behaviours, the current theoretical framework on market participation and transactions costs is extended to include those households that sell and buy in the same time period. We correct for endogeneity and selectivity throughout our models. We used a novel dataset of 393 households in northern Ghana with detailed information on market transactions and ICTs usage. Results show that receiving market information via mobile phones has a positive and significant impact on market participation, with a greater impact for households with a surplus of food crops. We find that radios have a larger impact on the quantity traded. This may reflect the nature of mobile phones in reducing searching costs, whereas radios provide an updated and regular flow of information which affects the pattern of crops consumed and sold. We also emphasise that the most significant factor is how ICTs are used, rather than their ownership.

Why designate market makers? affirmative obligations and market quality

We study why most financiaI markets designate one or more agents who precommit to provide more liquidity than they would endogenously choose, and identify two reasons that such affirmative obligations can improve welfare. The first relies on the insight that the informational component of the competi tive bid-ask spread represents a transfer across traders, not a social cost to completing trades. As such, this trading cost dissuades efficient trading, while a restriction on spread widths encourages efficient trading. Secondly, a restriction on spread widths encourages traders to become informed, which speeds the rate at which market prices move toward true asset values in the wake of information events. We consider the setting where competition ensures that affirmative obligations impose net trading losses on designated market makers that must be compensated by side payments, as observed on the Euronext limit order market, and also the setting where the designated market maker is allowed some advantages relative to limit order traders so that profits can be eamed during tranquil periods to offset losses incurred when affirmative obligations are binding, as observed on the NYSE.