Bundling under the Threat of Parallel Trade

This paper examines the use of bundling by a firm that sells in two national markets and faces entry by parallel traders. The firm can bundle its main product, - a tradable good- with a non-traded service. It chooses between the strategies of pure bundling, mixed bundling and no bundling. The paper shows that in the low-price country the threat of grey trade elicits a move from mixed bundling, or no bundling, towards pure bundling. It encourages a move from pure bundling towards mixes bundling or no bundling in the high-price country. The set of parameter values for which the profit maximizing strategy is not to supply the low price country is smaller than in the absence of bundling. The welfare effects of deterrence of grey trade are not those found in conventional models of price arbitrage. Some consumers in the low-price country may gain from the threat of entry by parallel traders although they pay a higher price. This is due to the fact that the firm responds to the threat of arbitrageurs by increasing the amount of services it puts in the bundle targeted at consumers in that country. Similarly, the threat of parallel trade may affect some consumers in the hight-price country adversely.

Inferring conduct under the threat of entry : the case of Brazilian cement industry

This paper demonstrates that when an industry faces potential entry and this threat of entry constrains pre-entry prices, cost and conduct are not identified from the comparative statics of equilibrium. In such a setting, the identifying assumption behind the well-established technique of relying on exogenous demand perturbations to empirically distinguish between alternative hypotheses of conduct is shown to fail. The Brazilian cement industry, where the threat of imports restrains market outcomes, provides an empirical illustration. In particular, pricecost margins estimated using this established technique are considerably biased downward, underestimating the degree of market power. A test of conduct is proposed, adapted to this constrained setting, which suggests that outcomes in the industry are collusive and characterised by market division.

Effect of Acute Psychological Stress on Prefrontal GABA Concentration Determined by Proton Magnetic Resonance Spectroscopy

Objective Impaired function of the central gamma-aminobutyric acid (GABA) system, which provides the brain’s major inhibitory pathways, is thought to play an important role in the pathophysiology of anxiety disorders. The effect of acute psychological stress on the human GABA-ergic system is still unknown, however. The purpose of this study was to determine the effect of acute stress on prefrontal GABA levels. Method A recently developed noninvasive magnetic resonance spectroscopy method was used to measure changes in the GABA concentration of the prefrontal cortex in 10 healthy human subjects during a threat-of-shock condition and during a safe condition (two sessions on different days). The main outcome measure was the mean GABA concentration within a 3×3×2-cm3 voxel selected from the medial prefrontal cortex. Results Prefrontal GABA decreased by approximately 18% in the threat-of-shock condition relative to the safe condition. This reduction was specific to GABA, since the concentrations of N-acetyl-aspartate, choline-containing compounds, and glutamate/glutamine levels obtained in the same spectra did not change significantly. Conclusions This result appeared compatible with evidence from preclinical studies in rodents, which showed rapid presynaptic down-regulation of GABA-ergic neurotransmission in response to acute psychological stress. The molecular mechanism and functional significance of this reduced inhibitory effect of acute psychological stress in relation to impaired GABA-ergic function in anxiety disorders merit further investigation.

Molecular diagnostics for gonorrhoea: implications for antimicrobial resistance and the threat of untreatable gonorrhoea

This Essay from Nicola Low and colleagues discusses the importance of the nucleic acid amplification tests for rapid detection of N. gonorrhoeae and its resistance determinants, as well as the importance of ensuring their rational use, as priorities for controlling both gonorrhoea and antimicrobial resistance. Please see later in the article for the Editors' Summary.

Minimizing the Threat of a Positive Majority Deficit in Two-tier Voting Systems with Equipopulous Units

The mean majority deficit in a two-tier voting system is a function of the partition of the population. We derive a new square-root rule: For odd-numbered population sizes and equipopulous units the mean majority deficit is maximal when the member size of the units in the partition is close to the square root of the population size. Furthermore, within the partitions into roughly equipopulous units, partitions with small even numbers of units or small even-sized units yield high mean majority deficits. We discuss the implications for the winner-takes-all system in the US Electoral College.

Threat of alveolar echinococcosis to public health - a challenge for Europe

Alveolar echinococcosis (AE) is a neglected 'malignant' parasitic disease. The European endemic area of Echinococcus multilocularis in foxes is larger than previously anticipated, and there is new evidence that both fox populations and the prevalence of E. multilocularis have increased in many areas, indicating increased pressure for infection with E. multilocularis eggs in intermediate and accidental hosts, including humans. This may result in more human AE cases within the next decades. Current numbers of both immunocompetent and immunocompromised AE patients, and the anticipated future increase, call for scaling-up research to rapidly improve the development and implementation of prevention measures, early diagnosis, and curative treatment of human AE.