"We sold a million units": the role of advertising past-sales

In a market where past-sales embed information about consumers’ tastes (quality), we analyze the seller’s incentives to invest in a costly advertising campaign to report them under two informational assumptions. In the …rst scenario, a pooling equilibrium with past-sales advertising is derived. Information revelation only occurs when the seller bene…ciates from the herding behaviour that the advertising campaign induces on the part of consumers. In the second informational regime, a separating equilibrium with past-sales advertising is computed. Information revelation always happens, either through prices or through costly advertisements.

The new economy: Essays in network economics and two-sided markets

Following the Introduction, which surveys existing literature on the technology advances and regulation in telecommunications and on two-sided markets, we address specific issues on the industries of the New Economy, featured by the existence of network effects. We seek to explore how each one of these industries work, identify potential market failures and find new solutions at the economic regulation level promoting social welfare. In Chapter 1 we analyze a regulatory issue on access prices and investments in the telecommunications market. The existing literature on access prices and investment has pointed out that networks underinvest under a regime of mandatory access provision with a fixed access price per end-user. We propose a new access pricing rule, the indexation approach, i.e., the access price, per end-user, that network i pays to network j is function of the investment levels set by both networks. We show that the indexation can enhance economic efficiency beyond what is achieved with a fixed access price. In particular, access price indexation can simultaneously induce lower retail prices and higher investment and social welfare as compared to a fixed access pricing or a regulatory holidays regime. Furthermore, we provide sufficient conditions under which the indexation can implement the socially optimal investment or the Ramsey solution, which would be impossible to obtain under fixed access pricing. Our results contradict the notion that investment efficiency must be sacrificed for gains in pricing efficiency. In Chapter 2 we investigate the effect of regulations that limit advertising airtime on advertising quality and on social welfare. We show, first, that advertising time regulation may reduce the average quality of advertising broadcast on TV networks. Second, an advertising cap may reduce media platforms and firms' profits, while the net effect on viewers (subscribers) welfare is ambiguous because the ad quality reduction resulting from a regulatory cap o¤sets the subscribers direct gain from watching fewer ads. We find that if subscribers are sufficiently sensitive to ad quality, i.e., the ad quality reduction outweighs the direct effect of the cap, a cap may reduce social welfare. The welfare results suggest that a regulatory authority that is trying to increase welfare via regulation of the volume of advertising on TV might necessitate to also regulate advertising quality or, if regulating quality proves impractical, take the effect of advertising quality into consideration. 3 In Chapter 3 we investigate the rules that govern Electronic Payment Networks (EPNs). In EPNs the No-Surcharge Rule (NSR) requires that merchants charge at most the same amount for a payment card transaction as for cash. In this chapter, we analyze a three- party model (consumers, merchants, and a proprietary EPN) with endogenous transaction volumes and heterogenous merchants' transactional benefits of accepting cards to assess the welfare impacts of the NSR. We show that, if merchants are local monopolists and the network externalities from merchants to cardholders are sufficiently strong, with the exception of the EPN, all agents will be worse o¤ with the NSR, and therefore the NSR is socially undesirable. The positive role of the NSR in terms of improvement of retail price efficiency for cardholders is also highlighted.

The pricing of academic journals: A two-sided market perspective

More and more academic journals adopt an open-access policy, by which articlesare accessible free of charge, while publication costs are recovered through authorfees. We study the consequences of this open access policy on a journal s qualitystandard. If the journal s objective was to maximize social welfare, open accesswould be optimal as long as the positive externalities generated by its diffusionexceed the marginal cost of distribution. However, we show that if an open accessjournal has a different objective (such as maximizing readers payoffs, the impactof the journal or its profit), it tends to choose a quality standard below the sociallyefficient level.

Doctors´ remuneration schemes and hospital competition in two-sided markets with common network externalities

This paper uses a two-sided market model of hospital competition to study the implications of di§erent remunerations schemes on the physiciansí side. The two-sided market approach is characterized by the concept of common network externality (CNE) introduced by Bardey et al. (2010). This type of externality occurs when occurs when both sides value, possibly with di§erent intensities, the same network externality. We explicitly introduce e§ort exerted by doctors. By increasing the number of medical acts (which involves a costly e§ort) the doctor can increase the quality of service o§ered to patients (over and above the level implied by the CNE). We Örst consider pure salary, capitation or fee-for-service schemes. Then, we study schemes that mix fee-for-service with either salary or capitation payments. We show that salary schemes (either pure or in combination with fee-for-service) are more patient friendly than (pure or mixed) capitations schemes. This comparison is exactly reversed on the providersíside. Quite surprisingly, patients always loose when a fee-for-service scheme is introduced (pure of mixed). This is true even though the fee-for-service is the only way to induce the providers to exert e§ort and it holds whatever the patientsívaluation of this e§ort. In other words, the increase in quality brought about by the fee-for-service is more than compensated by the increase in fees faced by patients.

Efficient Legendre spectral tau algorithm for solving two-sided space-time Caputo fractional advection-dispersion equation

In this paper we present the operational matrices of the left Caputo fractional derivative, right Caputo fractional derivative and Riemann–Liouville fractional integral for shifted Legendre polynomials. We develop an accurate numerical algorithm to solve the two-sided space–time fractional advection–dispersion equation (FADE) based on a spectral shifted Legendre tau (SLT) method in combination with the derived shifted Legendre operational matrices. The fractional derivatives are described in the Caputo sense. We propose a spectral SLT method, both in temporal and spatial discretizations for the two-sided space–time FADE. This technique reduces the two-sided space–time FADE to a system of algebraic equations that simplifies the problem. Numerical results carried out to confirm the spectral accuracy and efficiency of the proposed algorithm. By selecting relatively few Legendre polynomial degrees, we are able to get very accurate approximations, demonstrating the utility of the new approach over other numerical methods.

Both Sides of the Story: Skill-biased Technological Change, Labour Market Frictions, and Endogenous Two-Sided Heterogeneity

This paper presents a stylised framework to examine how skill-biased technological change and labour market frictions affect the relationship between economic expansion and unskilled unemployment. The first part of the analysis focuses on the investment decisions in skill-acquisition and technology adoption activities faced by workers and firms in response to the introduction of an innovative technology. The second part examines how endogenous two-sided heterogeneity in the labour market affects the macroeconomic outcomes in terms of unemployment, technological diffusion, and economic expansion. To conclude, the framework is used to discuss the effects of alternative forms of policy intervention on agents' investment decisions and on the macroeconomic outcomes.

Pecuniary Externality through Credit Constraints: Two Examples without Uncertainty

This paper is a contribution to the growing literature on constrained inefficiencies in economies with financial frictions. The purpose is to present two simple examples, inspired by the stochastic models in Gersbach-Rochet (2012) and Lorenzoni (2008), of deterministic environments in which such inefficiencies arise through credit constraints. Common to both examples is a pecuniary externality, which operates through an asset price. In the second example, a simple transfer between two groups of agents can bring about a Pareto improvement. In a first best economy, there are no pecuniary externalities because marginal productivities are equalised. But when agents face credit constraints, there is a wedge between their marginal productivities and those of the non-credit-constrained agents. The wedge is the source of the pecuniary externality: economies with these kinds of imperfections in credit markets are not second-best efficient. This is akin to the constrained inefficiency of an economy with incomplete markets, as in Geanakoplos and Polemarchakis (1986).

Moduli of smoothness and growth properties of Fourier transforms: two-sided estimates

We prove two-sided inequalities between the integral moduli of smoothness of a function on R d[superscript] / T d[superscript] and the weighted tail-type integrals of its Fourier transform/series. Sharpness of obtained results in particular is given by the equivalence results for functions satisfying certain regular conditions. Applications include a quantitative form of the Riemann-Lebesgue lemma as well as several other questions in approximation theory and the theory of function spaces.

Two-sided learning in new keynesian models: dynamics, (lack of) convergence and the value of information

This paper investigates the role of learning by private agents and the central bank (two-sided learning) in a New Keynesian framework in which both sides of the economy have asymmetric and imperfect knowledge about the true data generating process. We assume that all agents employ the data that they observe (which may be distinct for different sets of agents) to form beliefs about unknown aspects of the true model of the economy, use their beliefs to decide on actions, and revise these beliefs through a statistical learning algorithm as new information becomes available. We study the short-run dynamics of our model and derive its policy recommendations, particularly with respect to central bank communications. We demonstrate that two-sided learning can generate substantial increases in volatility and persistence, and alter the behavior of the variables in the model in a signifficant way. Our simulations do not converge to a symmetric rational expectations equilibrium and we highlight one source that invalidates the convergence results of Marcet and Sargent (1989). Finally, we identify a novel aspect of central bank communication in models of learning: communication can be harmful if the central bank's model is substantially mis-specified

Quality uncertainty and allocation of decision rights in the European protected designation of origin

The paper considers some issue in the governance of the European Protected Designation of Origin (PDO). The PDO systems are the outcomes of both farmers and consumers expectations and connect the valorisation of the agricultural and rural resources of given territories to the quality of typical products. A critical point in the governance of the PDO systems is represented by the connection between the quality strategies and the uncertainty. The paper argues that the PDO systems can be thought of as strictly coordinated subsystems in which the ex post governance play a critical role in coping with quality uncertainty. The study suggests that the society's inducements given raise to complex organizational systems in which the allocation of decision rights to PDO collective organizations play a major role. The empirical analysis is carried out by examining ten Italian PDO systems in order to identify the decision rights allocated.

Two-sided learning in New Keynesian models: Dynamics, (lack of) convergence and the value of information

This paper investigates the role of learning by private agents and the central bank(two-sided learning) in a New Keynesian framework in which both sides of the economyhave asymmetric and imperfect knowledge about the true data generating process. Weassume that all agents employ the data that they observe (which may be distinct fordifferent sets of agents) to form beliefs about unknown aspects of the true model ofthe economy, use their beliefs to decide on actions, and revise these beliefs througha statistical learning algorithm as new information becomes available. We study theshort-run dynamics of our model and derive its policy recommendations, particularlywith respect to central bank communications. We demonstrate that two-sided learningcan generate substantial increases in volatility and persistence, and alter the behaviorof the variables in the model in a significant way. Our simulations do not convergeto a symmetric rational expectations equilibrium and we highlight one source thatinvalidates the convergence results of Marcet and Sargent (1989). Finally, we identifya novel aspect of central bank communication in models of learning: communicationcan be harmful if the central bank's model is substantially mis-specified.

Threading dislocation lines in two-sided flux-array decorations

Two-sided flux decoration experiments indicate that threading dislocation lines (TDLs), which cross the entire film, are sometimes trapped in metastable states. We calculate the elastic energy associated with the meanderings of a TDL. The TDL behaves as an anisotropic and dispersive string with thermal fluctuations largely along its Burgers vector. These fluctuations also modify the structure factor of the vortex solid. Both effects can, in principle, be used to estimate the elastic moduli of the material.

Energy deficit and length of hospital stay can be reduced by a two-step quality improvement of nutrition therapy: the intensive care unit dietitian can make the difference.

OBJECTIVE: Critically ill patients are at high risk of malnutrition. Insufficient nutritional support still remains a widespread problem despite guidelines. The aim of this study was to measure the clinical impact of a two-step interdisciplinary quality nutrition program. DESIGN: Prospective interventional study over three periods (A, baseline; B and C, intervention periods). SETTING: Mixed intensive care unit within a university hospital. PATIENTS: Five hundred seventy-two patients (age 59 ± 17 yrs) requiring >72 hrs of intensive care unit treatment. INTERVENTION: Two-step quality program: 1) bottom-up implementation of feeding guideline; and 2) additional presence of an intensive care unit dietitian. The nutrition protocol was based on the European guidelines. MEASUREMENTS AND MAIN RESULTS: Anthropometric data, intensive care unit severity scores, energy delivery, and cumulated energy balance (daily, day 7, and discharge), feeding route (enteral, parenteral, combined, none-oral), length of intensive care unit and hospital stay, and mortality were collected. Altogether 5800 intensive care unit days were analyzed. Patients in period A were healthier with lower Simplified Acute Physiologic Scale and proportion of "rapidly fatal" McCabe scores. Energy delivery and balance increased gradually: impact was particularly marked on cumulated energy deficit on day 7 which improved from -5870 kcal to -3950 kcal (p < .001). Feeding technique changed significantly with progressive increase of days with nutrition therapy (A: 59% days, B: 69%, C: 71%, p < .001), use of enteral nutrition increased from A to B (stable in C), and days on combined and parenteral nutrition increased progressively. Oral energy intakes were low (mean: 385 kcal*day, 6 kcal*kg*day ). Hospital mortality increased with severity of condition in periods B and C. CONCLUSION: A bottom-up protocol improved nutritional support. The presence of the intensive care unit dietitian provided significant additional progression, which were related to early introduction and route of feeding, and which achieved overall better early energy balance.

The role of network externalities in value creating process of the commercial web service for two-sided international markets

Network externalities and two-sided markets in the context of web services and value creation is not very well discussed topic in academic literature. The explosive rise of the Internet users has created a strong base for many successful web services and pushed many firms towards e-business and online service based business models. Thus the subject of this thesis, the role of network externalities in value creating process of the commer-cial web service for two-sided international markets is very current and interesting topic to examine. The objective of this Master’s Thesis is to advance the study of network externalities from the viewpoint of two-sided markets and network effects as well as describe the value creation & value co-creation process in commercial web service business models. The main proposition suggests that the larger network of customers and the bigger number of users the web service is able to attract, the more value and stronger positive net-work externalities the service is able to create for each customer group. The empirical research of this study was implemented for commercial web service, targeted to Russian consumers and Finnish business users. The findings suggest that the size of the network is highly related to the experi-enced value of the customers and the whole value creation process of commercial web targeted for two-sided international markets varies from the value creation for one-sided or pure domestic markets.