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As worldwide food prices rise, there is a growing interest in understanding the effect of these increases on households. Building on previous work, while applying recent methodological advances, we focus our attention on México during the COVID-19 pandemic. We document these price escalations for a basket of foods representative of Mexican households' diets. The price increases are substantial across the basket, ranging from 20 percent in meat to 40 percent in tortilla. Using these estimates, we calculate the welfare effect from the recent food price escalation to cost households $17.07 billion annually, close to 1.5 percent of Mexico's Gross Domestic Product in 2020. We estimate households would need to increase their food expenditure budgets by 28.66 percent, the compensating variation, to achieve pre-price increase utility levels. [ABSTRACT FROM AUTHOR]

The issue of volatile food prices is a consistent problem for American consumers, as rising prices make it challenging to afford nutritious food that meets dietary standards. Various complex factors influence this price volatility, including economic conditions, weather patterns, global trade, energy prices, and more. Notably, the impact of food price increases is not equal for everyone. Low-income individuals and those in rural areas are disproportionately affected. A comprehensive understanding of the driving factors is essential to tackle this issue effectively. We employ advanced time-series techniques such as Vector Error Correction Models (VECM) and modern causal inference methods such as probabilistic graphical models implemented via machine learning and artificial intelligence approaches on monthly data from 2000 to 2021 to investigate the U.S. food price inflation issue. These methods help unravel the intricate dynamics among key variables driving food price inflation. The study aims to achieve several objectives. It intends to (1) clarify how factors influencing food price inflation in the U.S. change over time using VECM models, (2) establish causal relationships among interconnected variables to develop probabilistic graphical models using innovative search algorithms, and (3) create and validate forecasts related to U.S. food price inflation. The end goal is to provide actionable insights for policy design. Results show that food price inflation is heavily tied to commodity pricing and pricing for medical services. Additionally, historical decompositions for COVID-19 show ties between food price inflation and energy inflation. [ABSTRACT FROM AUTHOR]

How do output prices respond to trade shocks? Using detailed firm‐product level data on sales and quantity between 1996 and 2007, we study the causal effect of Chinese import competition on prices for Indian manufacturing firms. We find that Chinese import competition induces a significant decline in firm‐product prices. A 1 percentage point increase in the Chinese import penetration ratio reduces firm‐product prices by 3.5%. Further, this decline in prices is driven by a decline in markup, conditional on costs, as opposed to the pass through of cost savings to prices – providing evidence for pro‐competitive effect. This decline in prices and markup is less pronounced for firms owned by Business Groups compared to stand‐alone, privately owned firms. We also document a large decrease in marginal costs and an increase in markup with no significant effect on prices for firms on account of increased access to imported Chinese inputs. [ABSTRACT FROM AUTHOR]

We use a large cross section of equity returns to estimate a rich affine model of equity prices, dividends, returns, and their dynamics. Our model prices dividend strips of the market and equity portfolios without using strips data in the estimation. Yet model‐implied equity yields closely match yields on traded strips. Our model extends equity term‐structure data over time (to the 1970s) and across maturities, and generates term structures for various equity portfolios. The novel cross section of term structures from our model covers 45 years and includes several recessions, providing a novel set of empirical moments to discipline asset pricing models. [ABSTRACT FROM AUTHOR]

Availability of inventory is a crucial issue while adopting a consignment strategy. The issue becomes paramount when demand depends on stock. To address the issue, a one-vendor one-buyer model under consignment stock (CS) policy is addressed in this paper. Both the channel members are assumed to have space limitations in their respective warehouses. The display area for the buyer is also limited. The buyer receives the product from the vendor under consignment stock policy, and transfers it in small batches to the display area. The market demand is affected by the price, freshness and on-hand stock level. Price is assumed to be dynamic in order to accurately depict real-world scenarios and to exhibit its important role in driving demand and influencing other decision-making factors. This study derives the optimal decisions to maximize the total profit of the supply chain system. Numerical experiments illustrate the optimal strategies such as production rate, shipment sizes, warehouse space limit, and number of shipments. Managerial insights are provided to establish the applicability of the model. [ABSTRACT FROM AUTHOR]

An obstacle to using market mechanisms to allocate indivisible goods is the lack of competitive equilibria (CEs). Arrow and Hahn introduced social-approximate equilibria: price vectors with "small" excess demands. We define preferences called Δ-substitutes, where social-approximate equilibria exist with good-by-good excess demand bounded by 2 (Δ − 1) , independent of economy size. For Δ = 1 , CEs exist even with income effects. A Δ greater than 1 allows for richer substitutability and complementarity patterns, broadening the scope for market mechanisms to allocate indivisible goods. [ABSTRACT FROM AUTHOR]

The TSpVARX model can be used in inflation and money outflow forecasting by accommodating the reciprocal relationship among endogenous variables, the influence of exogenous variables, inter-regional linkages, and the nonlinearity of the relationship between endogenous and predetermined variables. However, the impact of some events, such as Eid al-Fitr and fuel price adjustments, still cannot be accommodated in the TSpVARX model. This condition causes inflation and money outflow forecasting using TSpVARX to be unsatisfactory. Our study is to improve the forecasting performance of the TSpVARX model by adding subset and dummy variables. We use a 12th lag subset variable to capture seasonal effects and a dummy variable to represent fuel price changes. These additions enhance the model's accuracy in forecasting inflation and money outflow by accounting for recurring patterns and specific events, like fuel price changes. Based on the RMSE values of the training and testing data, we can conclude that forecasting inflation and money outflow using TSpVARX with the addition of subset and dummy variables is better than the regular TSpVARX. The inflation and money outflow forecasting generated after the addition of subset and dummy variables are also more fluctuating as in the movement of the actual data. [ABSTRACT FROM AUTHOR]

This study examined the vertical transmission of wheat price among the main value chain, looking at the pricing behaviour of certain role players in the wheat production/supply and the distribution of bread, which is a major staple food consumed in South Africa. A nonlinear autoregressive distributed lag (NARDL) model was used to analyse the yearly time series data for the period of 2000 to 2022. The results of the stationarity test showed that all variables were of order one, I (1). The study used two pairs, namely farmgate price and retail price, and farmgate price and wholesale price, to examine the existence of asymmetry between these prices, with rainfall and temperature as control variables. The results indicate the existence of a positive long-run asymmetry of 35.9% between the farmgate price of wheat and retail price of bread, and 3.49% asymmetry between the farmgate price and wholesale price of wheat. To develop informed policies on food security, this study suggests that the government should enhance regular access to data and sustain its monitoring and communication of food price information across the whole country. For farmers, a policy on price transparency can help them to establish a public platform to share market prices, ensuring that they receive fair prices. This paper also recommends the provision of subsidies for wheat farmers to help the wheat industry, reduce the cost of bread production, and make bread more affordable and accessible for consumers. [ABSTRACT FROM AUTHOR]

The purpose of this article is to identify differences, similarities, advantages and disadvantages of directly operated stores and franchises. Both are successful business models. Differences can not only be described about traditional variables and context, such as capital structure and agency costs, but also about new technologies and strategies. In addition to theoretical review, a comparative analyse was made through the examples of Starbucks and Dunkin's, showing that both models are successful, even with specific strength and weaknesses in relation with nowadays challenges such as e-commerce encroachment and increased competition. Franchising has been constantly evolving in recent decades, with gradual evolution towards the dominance of multi-unit solutions and structured formats that can enable consistent national and international replication. One of biggest challenges that franchisors will face in the future due to the development of e-commerce is the alternative between establishing an "e-profit sharing" system and strengthening the franchise or reducing the readiness for growth and thus investing more in directly operated stores. On the other hand, one important challenge of a premium price directly operated store like Starbucks comes from low entry barriers and price competition. [ABSTRACT FROM AUTHOR]

This paper examines problems in decision theory where the number of alternatives and states of nature are finite. Previous studies have defined the concept of "the value of perfect information for the problem" (VPIP). This metric allows us to obtain an upper bound on the amount a decision-maker would be willing to pay for perfect information under the specific conditions of a problem. This bound is particularly important when the decision is unrepeatable, providing a more accurately adjusted measure than the one traditionally obtained with "the expected value of perfect information" (EVPI). Supported by linear programming, this work proposes a sensitivity analysis of these bounds by seeking to identify the intervals in which the problem values can vary without essentially modifying the structure of the problem. Specifically, the study aims to determine how this variation might affect the EVPI and VPIP bounds, as well as the difference in the price a decision-maker would be willing to pay for perfect information if any of the problem values were altered. By identifying alternatives and scenarios taking into account the role they play in the problem, this research classifies the data involved in a finite decision problem to ensure the conclusions can be understood as generally as possible. Although the proposed sensitivity analysis is applied to the oil-drilling problem, a classic in decision theory, the conclusions of this work have potential applications in improving environmental decision-making processes. [ABSTRACT FROM AUTHOR]

The start of a forced execution in which the debtor's patrimonial asset is liquidated is the premise for the activation of the privileges, perceived as tools for ordering the creditors when the "price of the debtor's assets" is divided [art. 2.326 para. (1) Civil Code]. A privileged creditor is preferred to the other creditors, even if their rights were born or registered earlier (art. 2.335 Civil Code). The law thus seeks to insure the creditor against the risk of the debtor's insolvency, by removing equality between creditors. For example, in the case of the sale of a good, the claim of the privileged creditor will be satisfied with priority and in its entirety, following that the claims of the other creditors will also be honored. The principle of absolute preference of privileges comes from ethical, social and economic needs, which substantiated the recognition of legal favor. [ABSTRACT FROM AUTHOR]

This study considers an effective policy to mitigate market powers held by retail liquefied petroleum gas distributors in Japan. A bilateral spatial competition model is constructed to analyse the effect of switching costs of consumers on retail competition in designated areas where stores provide free delivery service at uniform prices. Model analysis shows that, at equilibrium, stores have exclusive delivery areas which are their natural territories given endogenously. If stores commit to their territories, promoting competition with the adjacent market would be effective. Whereas, if stores do not commit, policies to lower the switching cost are effective. [ABSTRACT FROM AUTHOR]

This paper investigates whether the world crude oil market is globalised in a 'one great pool' or is regionalised by examining the prices of 21 different types of crude oil from various regions worldwide. We employ monthly data from October 2011 to November 2020 to construct spatial panel data models. Using three weight matrices, we account for the physical properties affecting crude oil quality and geographical factors. The resulting empirical evidence reveals that although we cannot refute the globalisation hypothesis, there are distinct price mechanisms specific to each type of crude oil. The pricing of crude oil appears to be influenced by a combination of similar and dissimilar qualities, including American Petroleum Institute gravity (API) gravity, sulfur content and geographical location. [ABSTRACT FROM AUTHOR]

The rigid assumptions underlying conventional parametric option-pricing models prevent them from accurately capturing the underlying nature of the market. Most of these models must be estimated numerically, because they cannot be solved analytically, which inevitably leads to estimation errors. Previous studies of option pricing, which have focused primarily on a single option variable, have not taken into account the effects of other options traded within the same time period. In order to address these issues, the authors use convolutional neural network (CNN) pattern recognition to fit the option panel data and provide a feature-rearrangement mechanism to account for the correlations between non-adjacent options. The suggested feature-rearranged CNN (FR-CNN) model is entirely data-driven without any preliminary assumptions. The authors' experiments with the Chinese SSE 50 ETF option show that the proposed FR-CNN outperformed the jump-diffusion model and CNN by 59.59% and 17.34%, respectively. [ABSTRACT FROM AUTHOR]

This article discusses the issue of option pricing in a continuous-time framework with transaction costs. Using the replication strategy that depends on the percentage of transaction costs and the revision interval, the authors develop a closed-form option pricing formula for European call options whose underlying asset price follows a sub-mixed fractional Brownian motion, which can better describe the characteristics of leptokurtosis, fat-tail, and long memory of the underlying asset. In- and out-of-sample empirical analyses on Shanghai Stock Exchange 50 ETF options illustrate the efficiency and accuracy of the sub-mixed fractional Brownian motion model and highlight the importance of including transaction costs in option pricing. [ABSTRACT FROM AUTHOR]

A preceding article has demonstrated that, using the Analytic Recovery Method, unconditional density functions can be recovered with highest accuracy from a series of call and put option prices. For each individual maturity, the closest approximation free of butterfly arbitrage is identified. From these unconditional densities, the conditional densities between maturities, as well as their moments, are recovered with equal precision. As functions of the moments, super moments are defined whose additive behavior creates maximum transparency. They are represented as functions of maturity. In the time-homogeneous case, linear dependence on maturity is obtained. The comparison with mean, volatility, skewness, and kurtosis extracted from option prices of major stock indices reveals certain discontinuities, and points to possible inconsistencies between market data for different maturities. [ABSTRACT FROM AUTHOR]

The authors introduce a Monte Carlo model to value de-SPAC warrants. These warrants contain path-dependent cumulative Parisian redemption features that are ignored by simpler valuation methods. The authors' model prices basic de-SPAC warrants accurately, provides an upper bound for more complex warrants, and shows that the cumulative Parisian redemption features often have material impacts on warrant values. The authors offer a detailed description and sample code to implement and extend their procedure. [ABSTRACT FROM AUTHOR]

More than a quarter century after implementing fiscal rules, and despite extensions of the convergence phase, West African Economic and Monetary Union (WAEMU) countries are still unable to comply with the fiscal rules established. In addition, these countries are facing multiple shocks, exerting pressure on public finances. Based on this context, this paper empirically investigates the drivers of fiscal rules policy credibility of seven WAEMU countries over the period 1994–2019. Using two measures of fiscal rules policy credibility and pooled mean group (PMG) econometric estimator of dynamic panel, we find that internal and external macroeconomic variables are the main determinants of fiscal rules policy credibility in WAEMU countries in the long run. The institutional and political variables have mitigated effects. Specifically, we find that debt accumulation, economic activity fluctuation (gross domestic product), fiscal space reduction, and international commodity price fluctuation harm fiscal rules policy credibility, meaning that these variables deviate the fiscal policy from its target value. Our results suggest that WAEMU governments should pay attention to global shocks to reduce their macroeconomic vulnerabilities and better manage their economic resilience. In addition, they should better manage debt by allocating it to productive sectors, or improve the quality of institutions by establishing a genuine democracy that improves decision‐making and reduces deviant behaviour. [ABSTRACT FROM AUTHOR]

The objective of this research paper is to understand and analyze the behavior of the prices of luxury goods and services in the two most important recessive periods that have occurred, which are the financial crisis of 2007 and COVID-19. This analysis was carried out for different purposes in the United States, Europe, China and in the world from January 2005 to July 2023. The results using fractional integration suggest that after the negative shocks caused by financial crisis and COVID-19, respectively, the time series return by themselves to their long-term projections. In the case of United States and Europe, the series will recover themselves faster than for the rest of the areas. [ABSTRACT FROM AUTHOR]

This paper investigates the effect of product substitutability on subgame perfect Nash equilibrium pricing structures (Uniform vs. Two-part Pricing) in a duopoly where each firm chooses its pricing policy first and then decides the level of the strategic variables (unit price and fixed fee) associated with the chosen pricing policy to maximize its own profit. Previous studies on two-part pricing in a monopoly situation showed that two-part pricing yields higher profits than uniform pricing, and we show that two-part pricing is also a subgame perfect Nash Equilibrium at all degrees of product substitutability even in a duopoly situation. However, this paper shows that if the degree of substitutability is quite high, uniform pricing can also become a subgame perfect Nash equilibrium strategy, although both firms can afford higher profits if both firms adopt two-part pricing. This paper also shows how the equilibrium unit price and fixed fee change as the product substitutability increases in each pricing structure and how the consumers in the market behave for these prices (purchase none, one of the products, or both). When both firms choose the two-part pricing policy, unit price and fixed fee show distinctive forms of U-shape and inverted U-shape as the substitutability increases, for which we explore the rationale. [ABSTRACT FROM AUTHOR]

In this paper, we analyze the dynamic-pricing decisions of differentiated products for retailers operating in a competitive environment, for a finite-time horizon, limited initial inventory, and in the presence of the reference effect. Customers learn from the past prices of retailers and form their estimate of sales prices, called the reference price effect, and use it to make a decision on choosing a retailer to make a purchase. The demand is uncertain, and the customer choice behavior is modeled based on a Multinomial Logit model, modified to incorporate the reference effect. The complexity of the problem increases under conditions of competition and demand uncertainty and cannot be analyzed using conventional methods. Therefore, we have used a neural network-based algorithm called Revenue-Based Neural Network (RBNN) to dynamically calculate the competitive price in order to increase the retailer's revenue. We have analyzed the effect of competition and the performance of RBNN algorithm under two scenarios: a monopolistic situation in which a retailer uses the RBNN policy to maximize its revenue, and a duopolistic situation in which one retailer uses the RBNN strategy and the other uses an adaptive policy called Derivative Following (DF). The results of the experiments show that the pricing policy under duopolistic conditions highly affects the income of retailers in the presence of reference price. The RBNN policy outperforms the DF policy due to the learning process on the customers' reference price. By charging higher prices in the RBNN strategy, the seller trades off the current revenue with the long-term revenue resulting from formation of higher levels of the reference price in customers' minds and earns more revenue than its competitor overall. [ABSTRACT FROM AUTHOR]

Crop and input prices affect agricultural production and water pollution. Fertilizer prices fluctuated over the past two decades, recently increasing substantially. Corn prices also increased after authorization of the Renewable Fuel Standard. This paper estimates the effect of fertilizer and corn prices on total phosphorus (TP) and dissolved phosphorus (DP) concentrations across 226 Great Lakes region watersheds. Findings indicate that a 10% rise in fertilizer prices reduces TP by 3% and DP by 6.9%. Counterfactual analysis shows that without recent fertilizer price hikes, nutrient concentrations would be higher, underscoring the impact of crop and input prices on phosphorus pollution. [ABSTRACT FROM AUTHOR]

Due to the vulnerability of pepper (Capsicum spp.) and the virulence of tomato spotted wilt virus (TSWV), seasonal shortages and surges of prices are a challenge and thus threaten household income. Traditional bioassays for detecting TSWV, such as observation for symptoms and reverse transcription-PCR, are time-consuming, labor-intensive, and sometimes lack precision, highlighting the need for a faster and more reliable approach to plant disease assessment. Here, two imaging techniques—Red–Green–Blue (RGB) and hyperspectral imaging (using NDVI and wavelength intensities)—were compared with a bioassay method to study the incidence and severity of TSWV in different pepper accessions. The bioassay results gave TSWV an incidence from 0 to 100% among the accessions, while severity ranged from 0 to 5.68% based on RGB analysis. The normalized difference vegetative index (NDVI) scored from 0.21 to 0.23 for healthy spots on the leaf but from 0.14 to 0.19 for disease spots, depending on the severity of the damage. The peak reflectance of the disease spots on the leaves was identified in the visible light spectrum (430–470 nm) when spectral bands were studied in the broad spectrum (400.93–1004.5 nm). For the selected wavelength in the visible light spectrum, a high reflectance intensity of 340 to 430 was identified for disease areas, but between 270 and 290 for healthy leaves. RGB and hyperspectral imaging techniques can be recommended for precise and accurate detection and quantification of TSWV infection. [ABSTRACT FROM AUTHOR]

Valuing the reconstruction of historic buildings is a complex and challenging task due to the unique nature of these structures and the uncertainties involved in estimating the scope of work. This study aimed to bridge the gap between traditional construction practices and modern economic frameworks by developing a comprehensive methodology for the valuation of construction works on historic buildings. Focusing on the Czech Republic, the study analysed the tender budgets of 21 reconstruction projects to be carried out between 2020 and 2023. The analysis compared tender prices with standardised indicative prices to identify significant discrepancies and the reasons for them. The proposed methodology integrated market-based price analysis and traditional pricing tools, providing a robust framework for accurate cost estimation. This approach not only ensured the preservation of the cultural value of historic buildings, but also provided a practical, financially sound strategy for their restoration. The findings of this study provide valuable insights for stakeholders involved in the pricing and budgeting of restoration projects, helping to refine cost estimation methodologies and improve the efficiency and accuracy of budgeting processes. [ABSTRACT FROM AUTHOR]

Insufficient information and understanding regarding a product's price components can lead to negative perceptions of the fairness of the price and subsequent negative behaviors toward the product. Cost transparency is a way to disclose these components and enhance price fairness and, in turn, behaviors. Previous research rarely tests the role of price fairness in the cost transparency process and limits itself to studying conventional products without considering other product types (e.g. Fairtrade products). Moreover, the moderating effect of consumers' characteristics (such as the construal level) is also lacking. To fill these gaps, we run two online experiments. We find that price fairness fully mediates the cost transparency–purchase intention relationship. We further find that this effect is stronger for Fairtrade products than for conventional products and that this enhanced effect is stronger for consumers with high construal level compared to consumers with low construal level. We discuss theoretical and managerial implications. [ABSTRACT FROM AUTHOR]

We develop and test a refinement to motivated reasoning theory that predicts long investors are more prone than short investors to forming biased beliefs about the value of a stock. Our theory suggests that motivated reasoning is muted for short investors because the investing setting conveys a conventional preference for prices to rise that is directionally inconsistent with short investors' incentivized preference for prices to fall. We examine this premise across four experiments. Experiment 1 tests our theory in an investing setting in which participants take either long or short positions. Compared to a rational benchmark for an unbiased judgment, we find that long traders' estimates of future stock price exhibit upward bias while short traders' estimates are unbiased. Consistent with motivated reasoning underlying these results, the magnitude of long traders' bias becomes less pronounced as the amount of uncertainty in the information environment decreases. Experiment 2 suggests that direct experience with taking short positions can increase short traders' propensity to engage in motivated reasoning. Experiments 3 and 4 provide additional evidence for our theory outside of the investing context. Overall our paper contributes new insights into differences between long and short investors and speaks to the broader literature on bias in judgment and decision-making that spans multiple fields. [ABSTRACT FROM AUTHOR]

Motivated by investor criticisms of current accounting standards, this study investigates whether differences exist in how acquired identifiable intangible assets relate to investors' expectations about the entity's cash flow prospects. Some investors assert that all acquired intangibles should be subsumed within goodwill, while others prefer separate recognition of identifiable intangibles only when they are strategically important sources of future cash flows. Still other investors call for separate recognition from goodwill only when identifiable intangibles are separable from the business, have defined useful lives, and have identifiable revenue streams (i.e., "wasting" intangibles). Consistent with some investor views, we find cross-sectional variation in the value relevance of identifiable intangibles based on differences in underlying asset characteristics. Our primary findings suggest that strategically important and wasting intangibles provide information different from that provided by goodwill. These findings inform standard setters as they evaluate recognition and disclosure alternatives for identifiable intangible assets. [ABSTRACT FROM AUTHOR]

Given important market and regulatory changes over the past two decades, we re-examine the relation between IPO pricing and coverage by sell-side stock analysts. Our design builds on the well-documented finding of the partial adjustment phenomenon, in that the IPO offer price revision following the road show is highly predictive of the first-day return. We provide new insights to the literature on IPO analyst coverage/recommendations. With respect to coverage, we find no evidence to suggest that the decisions of affiliated analysts vary with IPO pricing. As for unaffiliated analysts, our results indicate that their coverage decisions are driven much more so by the offer price revision than by the return on the first-trading day. We interpret this as consistent with the view that unaffiliated analysts consider institutional investor demand revealed during book-building as an important input into their decision of whether to cover an IPO issuer. With respect to recommendations, our findings suggest that, for IPOs after the JOBS Act of 2012, lead underwriters appear to bring on co-managers that seemingly pre-commit to provide favorable recommendations, particularly for IPOs that do not experience an increase in their offer price after the road show or an increase in their share price on the first trading day. [ABSTRACT FROM AUTHOR]

According to many studies, the transmission of oil prices to retail fuel prices is asymmetric. Fuel prices react faster if oil prices rise and more slowly if oil prices fall. Different standard econometric procedures lead to different results. The Linex approach, which is based on formulating the non-linear adjustment cost function, reflects the theory. It uses the generalised method of moments to estimate the reaction functions, which demands many observations. The paper investigates the price asymmetry in the Croatian retail fuel market using standard approaches and the Linex approach. The simple and dynamic asymmetry models, error correction models, threshold autoregressive co-integration, and the Linex approach are used to verify the hypothesis of asymmetric reactions of gasoline and diesel prices in Croatia. The results using the standard methods are mixed, while the Linex approach indicates price asymmetry, the size of which is measured with the average price bias. The results correspond to other studies worldwide. The authors' preferred Linex approach detects price asymmetries, even with large data samples with frequent changes in trends and volatilities. According to the approach, the question is not whether prices are formed asymmetrically but the size of the asymmetry. [ABSTRACT FROM AUTHOR]

Scholars and policymakers have long been interested in measuring the relative property tax burden across cities. Most existing estimates rely on statutory rates and other official metrics to compute the prevailing tax rate in a city. Yet, a crucial feature of the property tax is that it is levied on estimated values rather than transaction prices. Without accounting for the quality of the estimated values it is impossible to know the effective tax rate. In this paper, I compute effective tax rates from micro data on property sales, aligning the tax due in the sale year with the sale price. I compare the observed effective tax rates with the best available estimates based on official sources. Relative to prior estimates, I find that effective tax rates are (a) generally lower, due to lags in estimated values; (b) widely varying even within the same city, due to errors in estimated values; and (c) usually regressive, due to biases in estimated values. I discuss the implications of these findings for taxpayers and policymakers. Key Takeaways: Effective tax rates are lower than nominal tax rates in most cities. The most likely reasons are that market values for tax purposes are estimated with a lag and that caps on assessment increases keep taxable values below market values.There is tremendous variation in effective property tax rates within the same jurisdiction, such that often some owners pay substantially more or substantially less than the prevailing rate. This variation means that comparisons across jurisdictions in terms of their average tax rates should be taken with a grain of salt.Within‐jurisdiction variation in rates is not entirely random. In most cities, lower‐priced homes pay higher effective property tax rates than higher‐priced homes. [ABSTRACT FROM AUTHOR]

Saudi Arabia is the largest country in the Middle East with huge solar energy resources but has achieved minimal adoption of photovoltaic energy systems (PV). This study investigates the potential of PV systems to address pressing challenges, including water scarcity and agricultural unemployment. This study addresses the deployment of PV in contemporary agriculture such as aquaponics and hydroponics to promote sustainable water, energy, and agricultural practices. Scrutinising national goals for PV energy against ground realities. The buyback tariff, interest rates of loans, and potential future power price increases are simulated to find suitable rates to encourage PV adoption. The current government grid purchase price is 1.87 cents USD/kWh, while the national grid selling price is 4.8 cents USD/kWh. Small-scale PV plants offer local investors passive income streams if financial institutes can offer these projects at lower interest rates. Investigating the country's educational sector reveals the need for an overhaul in technical education for solar energy systems. The simulation shows that PV use in agriculture is economically feasible for large loads even with buyback rates as low as 1.87 cents USD/kWh. This research contributes by emphasising local involvement and proposing financial mechanisms, government reforms, and sustainable agricultural development in the region. [ABSTRACT FROM AUTHOR]

We examine the effect of expected competition on markups in a random utility model where the number of competing firms may differ across consumers. Firms observe consumers' utility shocks and set prices using personalized pricing. We derive a precise condition under which the expected markup across consumers can be represented by a simple expression involving consumers' expected utility and the expected demand. This delivers a general condition under which greater expected competition is price‐increasing. Whether this condition holds depends on the distribution of utility shocks, consumers' outside option, the expected number of competing firms, and the distribution of the number of firms competing for each consumer. [ABSTRACT FROM AUTHOR]

This article analyses how consumers' habit formation and addiction affect firms' pricing policies. I consider both sophisticated consumers, who realize that their current consumption will affect future tastes, and "naive" consumers, who do not. The optimal contract for sophisticated consumers is a two‐part tariff. The main result is that the optimal pricing pattern when the consumer is naive is a "bargain then rip‐off" contract, namely a fixed fee, with the first units priced below cost, and then priced above marginal cost. This holds both under symmetric and asymmetric information about the consumers' degree of sophistication. [ABSTRACT FROM AUTHOR]

We estimate a model of incomplete information price competition where consumers endogenously choose whether to use a price search website. We examine how consumer search and prices would change under different transparency regimes. We find that aggregate consumer welfare is maximized when the price search website lists the lowest 20% of prices (i.e., one station in markets with less than five stations, and two stations in markets with more than five stations), with consumer expenditures falling by 1.5% relative to a regime where all are listed. [ABSTRACT FROM AUTHOR]

Cutting out the intermediary and selling directly to consumers is an increasingly common strategy by manufacturers. We develop a structural model of vertical relations where manufacturers bargain with retailers and sell their products directly to consumers. Direct sales generate potential consumer gains due to additional competition and product variety but also increase manufacturers' bargaining leverage, thereby increasing upstream and downstream prices and potentially reducing consumer welfare. We estimate the model using data from the outdoor advertising industry to quantify the bargaining‐leverage and welfare effects of direct sales. We discuss the relevance of the bargaining‐leverage effect for vertical merger evaluation. [ABSTRACT FROM AUTHOR]

We estimate the evolution of competition in the ready‐to‐eat cereal industry. To separately identify detailed patterns of industry conduct from unobserved marginal cost shocks, we construct novel instruments that interact data on rival firms' promotions with measures of products' relative isolation in the characteristics space. We find strong evidence for partial price coordination among cereal manufacturers in the beginning of our sample. After a merger in 1993 conduct becomes more competitive and on average consistent with multiproduct Nash pricing. The last part of our sample is characterized by even more aggressive pricing, implying median wholesale margins of less than 5%. [ABSTRACT FROM AUTHOR]

This paper examines the wage and welfare effects of the competition policy in a platform economy. An increase in downstream platform providers widens the skilled‐unskilled wage gap in the short run. Moreover, competition brings about a beneficial price pass‐through effect but a detrimental cost‐pushing effect on upstream manufacturers. This leads to business dynamism in manufacturing firms. By numerical simulations, the number of manufacturing firms increases, thus further widening wage inequality in the long run. The optimal number of platform providers is smaller when the business‐stealing effect is larger, whereas it is larger when the price pass‐through effect is greater. [ABSTRACT FROM AUTHOR]

Long-term decisions, such as decisions about carbon abatement, are usually based on the implausible assumption of constant social preference. This paper focuses on a specific case of market and nonmarket goods, and it investigates the optimal climate policy when social preference for them is also changed by climate policy in a seminal climate-economy model: the Dynamic Integrated Model of Climate and the Economy (DICE) model with a single objective to maximize market goods consumption. We amend DICE to study an optimization problem that trades off the values of market and nonmarket goods, considering endogenous preferences. The relative price of non-market goods grows over time because of increases in both relative scarcity and the appreciation that represents the preference of it. As nonmarket goods are increasingly valuable relative to market ones, climate damages on nonmarket goods are increasingly expensive. The social cost of carbon, which aggregated climate impact on both goods, is consequently higher. Because abatement decision affects the valuation of nonmarket goods in the utility function, unlike previous climate-economy models, we solve the model iteratively by taking the obtained abatement rates from the last run as inputs in the current run. The results in baseline calibration advocate a more stringent climate policy, where endogenous social preference to climate policy raises the social cost of carbon further by roughly 12%–18% this century. Moreover, neglecting changing social preference leads to an underestimate of nonmarket goods damages by 15%. Climate policy is self-reinforced if it favors the more expensive consumption good. The proposed method can be applied to other long-term problems with endogenous preferences. Funding: H. Liao appreciates the funding from the National Natural Science Foundation of China [Grants 71925008, 72293603, and 72488101]. [ABSTRACT FROM AUTHOR]

As a new type of online health communities (OHC), online doctor consultation services (ODCS) enable doctors deliver healthcare consulting to patients virtually. Patients can use both online information, such as online reviews, and offline attributes, such as position rank, to choose the consultant. This study uses a comprehensive model to investigate the influence of online Word-of-Mouth (online WOM) indicated by online information and quality of healthcare service reflected by offline attributes on the sales amount of doctor consultations. A panel dataset of 11,163 records from the biggest ODCS platform in China is used for empirical analysis. Results show that valence and volume of online review, the number of domain votes, recommend value, and position rank of consultant have positive effects on patients' choice of consultant. The effect of hospital level where the consultant works at is insignificant. The moderating effect between consultant's online recommend value and offline position rank is negative so that the consultant's position rank becomes less important if a consultant's recommend value is high and vice versa. Furthermore, the results also reveal that price has a negative impact on patients' demand of healthcare consulting and patients with high-risk disease are less sensitive to it. This study contributes to the existing literature by uncovering the factors that influence patients' choice of consultant and providing practical implications for doctors and system designers in ODCS. [ABSTRACT FROM AUTHOR]

We study the effects of entry deregulation in the Finnish interurban bus market. We observe that the number of operators on routes connecting large and medium-sized cities has grown. In less populated regions, there has not been an increase in operators, but there is also no indication of a decrease in access to transport services. We estimate the causal effect of the reform on prices using a synthetic control unit constructed from other European countries. We show that increased competition resulted in 28% lower prices in the interurban bus market. Consistent with our evidence on entry, we find that prices decreased on routes connecting large and medium-sized cities, while on routes connecting smaller municipalities, we find no significant change in prices. We also study how the reform affected the price of substitutes and find that the increased intermodal competition resulted in a 23% price decrease in the long-distance railway market. Overall, we find that the entry deregulation benefited consumers and increased total welfare. [ABSTRACT FROM AUTHOR]

The topic of pricing non-convexities in power markets has been explored vividly in the literature and among practitioners for the past twenty years. The debate has been focused on indivisibilities in short-term auctions, the computational tractability of some pricing proposals, and the economic analysis of their behavior. In this paper, we analyse a source of non-convexities that is not discussed as broadly: the indivisibilities in investment decisions. The absence of equilibrium that we are primarily concerned about is the long-term equilibrium. We derive a capacity expansion model with indivisibilities and we highlight the issues arising from it. We discuss its relevance and address one particular argument for neglecting indivisibilities in investment, namely market size. We investigate to what extent a capacity market that clears discrete offers can mitigate the lumpiness problem. We particularly introduce the novel concept of convex hull pricing for capacity auctions. We illustrate the main findings with a numerical experiment conducted on the capacity expansion model used by ENTSO-E to assess the adequacy of the entire European system. [ABSTRACT FROM AUTHOR]

We employ the "Two Sessions," comprising the National People's Congress and the Chinese People's Political Consultative Conference, as a proxy for measuring policy uncertainty. In our analysis, we utilize a regression model, the three-path mediated effect framework, and the Campbell and Shiller decomposition method to delve into the influence of policy uncertainty on asset pricing within China's financial market. Our findings reveal an increase in stock returns during the months leading up to the "Two Sessions," evident at both the market and firm levels. Notably, the extent to which stock returns respond to policy uncertainty is contingent on various firm-specific characteristics, including ownership structure, company size, and profitability. Furthermore, our investigation confirms that investor sentiment serves as a complete mediator in the relationship between policy uncertainty and its impact on asset prices. Additionally, we identify future cash flow as the primary conduit through which policy uncertainty directly exerts its influence on asset prices. [ABSTRACT FROM AUTHOR]

The Norwegian Competition Appeals Tribunal overturned the Norwegian Competition Authority's decision to fine four book publishers and an online book database operator in the Bokbasen case, clarifying when standalone information exchanges may constitute a 'by object' restriction. The CAT's decision highlighted the importance of assessing the reduction of uncertainty and reiterating existing case law on information exchange as a by object restriction. The CAT ultimately found that the information exchanged in the Bokbasen case did not amount to a by object restriction, leading to the overturning of the NCA's decision. The CAT's decision was final, with no right of appeal for the NCA, and it was the third time since 2020 that the CAT or the courts criticized and overruled the NCA's presentation of evidence. [Extracted from the article]

We study the impact of competitive personalized pricing in a Hotelling duopoly model where consumers can purchase from both firms. We show that the impact crucially depends on the magnitude of the additional utility from consuming the second product. Compared with uniform pricing, personalized pricing benefits both consumers and firms when the additional utility is moderate; but it harms consumers while benefiting firms when the additional utility is large. These results contrast with the existing research on competitive personalized pricing, which assumes that consumers purchase one product only. [ABSTRACT FROM AUTHOR]

We theoretically derive an optimal price for a bundle of two goods that are sold in advance to risk‐averse buyers. The theory predicts that a round‐trip ticket is less expensive than two one‐way tickets when demands for the outbound and the inbound are uncertain and positively correlated. Using a unique airlines dataset, we find evidence that is consistent with the theory; round‐trip bundle discounts exist and they are larger for passengers who buy early in advance, stay on a Saturday night, and have higher valuations. We also find that the bundle discounts decrease with competition. [ABSTRACT FROM AUTHOR]

We study the effects of partial cross ownership (PCO) among rival firms on their incentives to innovate. PCO in our model gives rise to a price effect due to its effect on price competition and hence on the marginal benefit from investment, as well as a cannibalization effect which arises because each firm internalizes part of the negative externality of its investment on the rival's profit. We show that overall, PCO may benefit or harm consumers depending on the size of the PCO stakes, their degree of symmetry, the size of the innovation, its marginal cost, and whether it is drastic or not. [ABSTRACT FROM AUTHOR]

This study explores the relationship between psychological risk, price fairness, and brand trust in consumers of bottled water. We also tested the moderating effect of nutritional disclosure on the impacts of psychological risk and eco-friendly packaging on price fairness. We analyzed the data of 308 participants recruited via the Clickworker platform. Hayes' PROCESS macro model 7 was employed to test the hypotheses. Price fairness was negatively influenced by psychological risk. Moreover, brand trust was significantly impacted by psychological risk and price fairness, with a significant moderating effect of nutritional disclosure on the relationship between eco-friendly packaging and price fairness. This work adds to the literature by identifying the relationship among four factors relevant to bottled water businesses. [ABSTRACT FROM AUTHOR]

Do true cost campaigns (TCCs)—which display prices at the point of purchase that include social and environmental negative externalities—nudge consumers toward more expensive sustainable products? From a theoretical point of view, the answer is promising: Communicating true costs means introducing external reference prices that provide a benchmark for consumers to assess price acceptability. Showing true costs triggers a general reference to the price of sustainability, and the higher price of sustainable products becomes at least partially explained by their lower "hidden costs" (i.e., costs to compensate for all environmental and social impacts). In two empirical studies, we demonstrate that for TCCs to be effective, the hidden costs for the sustainable products must be lower than those for the conventional alternatives. Interestingly, under this condition, TCCs have an effect in markets characterized by a larger (study 1) and a smaller (study 2) green gap. In both studies, we find that increased perceived price fairness explains the effect of TCCs, as measured by the relative preference for the sustainable compared to the conventional product. In addition, we see that the price difference between the two products plays a significant role in forming this preference judgment, independent of other factors included in the model and especially independent of TCC. [ABSTRACT FROM AUTHOR]

In this paper, we introduce a novel neural network (NN) for solving optimal control problems associated with American options in financial markets. American options provide holders with the flexibility to exercise the option before expiration, thereby affecting potential profitability. This paper focuses on determining the optimal exercise strategy and option price to maximize the payoff by solving a class of American option optimal control problems. We reformulate the optimal control problem into a linear complementarity problem(LCP). Subsequently, we employ the penalty approach and smoothing method to convert the LCP into a bi-nonlinear system with a set of partial differential equations (PDEs). By solving the reformulated PDE equations with the proposed method, we obtain numerical solutions that yield the optimal exercise strategy and option price. Numerical examples of American call and put options demonstrate the efficiency and usefulness of the proposed methods. [ABSTRACT FROM AUTHOR]

The purpose of this study is to identify the load profile of the residential rural and urban residential consumers in Bihor County. This profiling will be a first step in identifying the appropriate load profile forecasting method for the specific consumer profile. Also, this profiling could help develop policies on increasing consumer energy awareness, or adapting the implementation of smart meters in rural or urban areas and applying some specific hourly prices. This load profiling will be assessed versus the EU profiles and conclusions will be drawn on this comparison. This study was developed using a multi annual database including consumers from a few cities and tens of villages in Bihor County. Each database was filtered for noise and absurd values. The nature of power consumption is well known for its temporal variability and this paper will attempt to highlight this essential aspect of load profiling. [ABSTRACT FROM AUTHOR]