The influence of price changes on consumers' purchase decisions

The development of an effective pricing strategy requires the acquaintance of consumers’ price perception as well as the range of elements that influence the price sensitivity. This paper analyses the relationships between product features, individual characteristics and the level of price increase/decrease that induces the consumers to change their purchase decisions. The results of a dedicated survey show, that price sensitivity, individual preferences, type of product and direction of price change and individual characteristics of consumers (gender, age, professional situation) have a significant impact on a threshold at which people are willing to choose the less attractive, but cheaper alternative to their favorite product or give up the variety in consumption. From a consumer behavior perspective, these findings play a fundamental role in pricing.

Price linkages in pharmaceutical markets

This paper studies the existing price linkage between generics and branded pharmaceuticals, in which the generic price must be a fraction of the latter. Using a vertical differentiation model, we look at the market equilibrium, the effects on the incentives for the brand producer to develop new products, and the possibility of predation by the brand producer over the generic firm. We find that the price linkage increases prices compared to no indexation and it may increase the incentives for the brand producer to expand its set of products. When prices are freely set, the branded firm may also want to expand a new product with a higher quality, but will prefer to remove the original one from the market. Predation may equally occur in both schemes but the price linkage may give fewer incentives for the branded firm to predate while compensating losses with a new drug.

Measuring the effects of price movements on private consumption

This paper studies how shocks in the prices of Food, Energy and Financial Assets affect private consumption using a VAR Model. Then, the total effects are broken into direct and indirect effects, using the coefficients taken from the previous model. We use quarterly data for the Portuguese economy from the last 20 years. We found that energy prices and financial assets have a strong connection with consumption, suggesting that the economy may be too exposed to shocks in these markets.

The price of honour: The corporate governance of Banco Espirito Santo

The Price of Honour is a case study, supported with teaching notes, which describes the events and circumstances surrounding the implosion of one of Portugal’s most systemically important banks - Banco Espírito Santo (BES). The case focuses on BES’s corporate governance and how the Espírito Santo family’s tight control of the bank led to its exploitation. Although the situation caught the attention of the bank’s supervisors, their untimely actions could not prevent BES’s financial health from crumbling only two months after a rights issue. With little leeway, the supervisors put forward a resolution which dramatically ended the bank’s centennial legacy.

Equity offerings, stock price crash risk, and the impact of securities regulation: international evidence

We examine whether earnings manipulation around seasoned equity offerings (SEOs) is associated with an increase in the likelihood of a stock price crash post-issue and test whether the enactment of securities regulations attenuate the relation between SEOs and crash risk. Empirical evidence documents that managerial tendency to conceal bad news increases the likelihood of a stock price crash (Jin and Myers, 2006; Hutton, Marcus, and Tehranian, 2009). We test this hypothesis using a sample of firms from 29 EU countries that enacted the Market Abuse Directive (MAD). Consistent with our hypothesis, we find that equity issuers that engage in earnings management experience a significant increase in crash risk post-SEO relative to control groups of non-issuers; this effect is stronger for equity issuers with poor information environments. In addition, our findings show a significant decline in crash risk post-issue after the enactment of MAD that is stronger for firms that actively manage earnings. This decline in post-issue crash risk is more effective in countries with high ex-ante institutional quality and enforcement. These results suggest that the implementation of MAD helps to mitigate managers’ ability to manipulate earnings around SEOs.

Earnings management and stock price crashes post-crossdelisting

We test whether cross-delisted firms from the major U.S. stock exchanges experience an increase in crash risk associated with earnings management. Consistent with our prediction, we find that earnings management have a greater positive impact on stock price crash risk post-cross-delisting when compared to a sample of still cross-listed firms. Moreover, our results suggest that this effect is more pronounced for crossdelisted firms from countries with weaker investor protection and poorer quality of their information environment. We further examine whether managers’ ability to manipulate earnings increases post-cross-delisting around seasoned equity offerings. Our evidence shows that cross-delisted firms that engage in earnings management to inflate reported earnings prior to a seasoned equity offering are more likely to observe a subsequent stock price crash.

Behavior-based price discrimination in a multi-dimensional preferences market

NIPE WP 04/ 2016

Reducciones Jesuiticas en el Chaco, Noroeste y Sur Argentino. Emplazamiento Territorial. Desarrollo Urbano y Arquitectónico entre los siglos XVII y XVIII. Evolución, Funciones y Tipologías. Reductions in the Chaco, Argentine Northwest and South. Territorial emplazan. Architectural and Urban Development between the seventeenth and eighteenth centuries. Evolution, Functions and Typologies.

Las reducciones jesuíticas en Argentina reconocen generalmente un único aporte en la región guaraní. Pero lo cierto es que una cantidad importante de reducciones, equivalente en número con las anteriormente mencionadas, se desarrollaron en el interior del país, fundamentalmente en las regiones del Chaco, noroeste y sur argentino. Muchas de ellas reconocen hoy su continuidad en centros urbanos y otras tan sólo, y en el mejor de los casos, en vestigios arqueológicos. Se propone el análisis de este conjunto desde las primeras incursiones en "misiones volantes" en el siglo XVII hasta la expulsión de los jesuitas en 1767. También se abordarán las modalidades y procesos generadores de centros reduccionales en estas regiones y sus interrelaciones territoriales. Además se pretende analizar sus funciones y morfologías originales, su evolución, traslados y posibles transformaciones posteriores, en las etapas previas al impacto originado ante la ausencia de la Compañía de Jesús. Los resultados incluirán la interpretación de los procesos formativos, con su diversidad de casos, en escalas regionales y locales, la recopilación de cartografía regional y urbana, y la determinación de series tipológicas de formas de trazados y organizaciones de tejidos, tanto en las demarcaciones de origen como en sus remodelaciones y ensanches cuando así correspondiere.

The challenges of establishing the electric vehicle in Ireland

This thesis investigates the challenges of establishing the electric vehicle (EV) in Ireland and how the Irish government and industry are trying to meet them. It further seeks to provide information on Irish consumers’ attitudes towards the electric vehicle and their willingness to purchase it. The review of the literature showed that the Irish government is investing significant funds in trying to establish the market for the electric vehicle and position itself as a world leader in adopting the electric vehicle. The EV will also have an important role to play in how Ireland meets its targets for CO2 reductions towards 2020. Climate change and use of fossil fuels are driving the need for increased use of renewable energy and increased energy independence while reducing the greenhouse gas emissions that are the leading cause of climate change. The transport sector is almost completely dependent on the use of fossil fuel and resultantly is one of the largest sources of these GHG emissions. These issues are leading to the design and production of more energy efficient and environmentally friendly vehicles. The ultimate goal is to achieve a zero emissions vehicle. The electric vehicle is presently the only vehicle being mass produced that has the potential to be zero emissions. There are however issues that customers may not be willing to overlook such as the lower range of the vehicle and the length of time it takes to recharge. Vehicle cost is also an important issue that customers may not overlook. Knowing what the consumer’s attitudes are towards the EV and their willingness to purchase them is important as these new vehicles begin to appear in the showrooms. The consumers will be vital to how successful this market becomes. Using an online questionnaire methodology, in a sample of 118 consumers, the major conclusion to be drawn from the research is that the vehicle price, the convenience to recharge and vehicle range were the three most essential issues for the consumers if they were purchasing an EV. The success of the electric vehicle market may depend on what measures are taken to overcome them.

List of species of mammals, principally rodents, obtained by W. W. Price, S. E. Meek, G. K. Cherrie and E. S. Thompson, in the States of Iowa, Wyoming, Montana, Idaho, Nevada and California, with descriptions of new species, by D. E. Elliot.

v.1:no.10(1898)

Trade disclosure and price dispersion

This paper determines the effects of post-trade opaqueness on market performance. We find that the degree of market transparency has important effects on market equilibria. In particular, we show that dealers operating in a transparent structure set regret-free prices at each period making zero expected profits in each of the two trading rounds, whereas in the opaque market dealers invest in acquiring information at the beginning of the trading day. Moreover, we obtain that if there is no trading activity in the first period, then market makers only change their quotes in the opaque market. Additionally, we show that trade disclosure increases the informational efficiency of transaction prices and reduces volatility. Finally, concerning welfare of market participants, we obtain ambiguous results. Keywords: Market microstructure, Post-trade transparency, Price experimentation, Price dispersion.

Tacit collusion and capacity withholding in repeated uniform price auctions

This paper contributes to the study of tacit collusion by analyzing infinitely repeated multiunit uniform price auctions in a symmetric oligopoly with capacity constrained firms. Under both the Market Clearing and Maximum Accepted Price rules of determining the uniform price, we show that when each firm sets a price-quantity pair specifying the firm's minimum acceptable price and the maximum quantity the firm is willing to sell at this price, there exists a range of discount factors for which the monopoly outcome with equal sharing is sustainable in the uniform price auction, but not in the corresponding discriminatory auction. Moreover, capacity withholding may be necessary to sustain this out-come. We extend these results to the case where firms may set bids that are arbitrary step functions of price-quantity pairs with any finite number of price steps. Surprisingly, under the Maximum Accepted Price rule, firms need employ no more than two price steps to minimize the value of the discount factor

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.

Collusion and fights in an experiment with price-setting firms and production in advance

We present results from 50-round market experiments in which firms decide repeatedly both on price and quantity of a completely perishable good. Each firm has capacity to serve the whole market. The stage game does not have an equilibrium in pure strategies. We run experiments for markets with two and three identical firms. Firms tend to cooperate to avoid fights, but when they fight bankruptcies are rather frequent. On average, pricing behavior is closer to that for pure quantity than for pure price competition and price and efficiency levels are higher for two than for three firms. Consumer surplus increases with the number of firms, but unsold production leads to higher efficiency losses with more firms. Over time prices tend to the highest possible one for markets both with two and three firms.

Elicited bid functions in (a)symmetric first-price auctions

We report on a series of experiments that examine bidding behavior in first-price sealed bid auctions with symmetric and asymmetric bidders. To study the extent of strategic behavior, we use an experimental design that elicits bidders' complete bid functions in each round (auction) of the experiment. In the aggregate, behavior is consistent with the basic equilibrium predictions for risk neutral or homogenous risk averse bidders (extent of bid shading, average seller's revenues and deviations from equilibrium). However, when we look at the extent of best reply behavior and the shape of bid functions, we find that individual behavior is not in line with the received equilibrium models, although it exhibits strategic sophistication.