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The Specialness of Zero
Gans, Joshua S. - 2019
A model is provided whereby a monopolist firm chooses to price its product at zero. This outcome is shown to be driven by the assumption of ‘free disposal' alongside selection markets (where prices impact on a firm's costs). Free disposal creates a mass point of consumers whose utility from...
Persistent link: https://www.econbiz.de/10012858807
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Markov Perfect Industry Dynamics with Many Firms
Weintraub, Gabriel Y.; Benkard, C. Lanier; Van Roy, Benjamin - 2021
We propose an approximation method for analyzing Ericson and Pakes (1995)-style dynamic models of imperfect competition. We develop a simple algorithm for computing an ``oblivious equilibrium,'' in which each firm is assumed to make decisions based only on its own state and knowledge of the long...
Persistent link: https://www.econbiz.de/10013220417
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A Competitive Theory of Monopoly Unionism
Lazear, Edward P. - 2021
This paper sets up a microeconomic theory of labor unions. It discusses their formation and goals, their hierarchical structure, and the nature of rent distribution. The theory provides predictions for the probability that an industry or occupation will be unionized, the proportion of that...
Persistent link: https://www.econbiz.de/10013229837
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Conglomerate Industry Choice and Product Differentiation
Hoberg, Gerard - 2011
conglomerates are most likely to operate and to understand conglomerate valuations. We find that conglomerates are more likely to … opportunities "between" them. Conglomerate firms have lower stock market valuations than matched single-segment firms when their … products are easier to replicate with single-segment firms. Conglomerate firms have stock market premiums when they have higher …
Persistent link: https://www.econbiz.de/10013122462
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Is There a Diversification Discount in Financial Conglomerates?
Laeven, Luc - 2005
This paper investigates whether the diversity of activities conducted by financial institutionsinfluences their market valuations. We find that there is a diversification discount: The marketvalues financial conglomerates that engage in multiple activities, e.g., lending and non-lendingfinancial...
Persistent link: https://www.econbiz.de/10012784437
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Bank Ties and Bond Market Access : Evidence on Investment-Cash Flow Sensitivity in Japan
McGuire, Patrick - 2003
The banking literature has established that banks can alleviate information asymmetries between lenders and borrowers, while the Q literature has used cash flow sensitivity analysis to test whether financing constraints hinder investment. This paper investigates whether bank ties in Japan were...
Persistent link: https://www.econbiz.de/10012786618
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An International Perspective of Japan's Corporate Groups and Their Prospects
Yafeh, Yishay - 2010
This paper reviews the literature on corporate groups in Japan and elsewhere, and offers a comparison of Japan's corporate groups with groups in other developed and developing countries. It then proceeds to examine the evolution of corporate groups in Japan since the mid-1970s. The main...
Persistent link: https://www.econbiz.de/10012762884
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Business Groups and the Incorporation of Firm-Specific Shocks into Stock Prices
Faccio, Mara - 2019
In lower-income economies, stocks exhibit less idiosyncratic volatility and business groups are more prevalent. This study connects these two findings by showing that business group affiliated firms' stock returns exhibit less idiosyncratic volatility than do the returns of otherwise similar...
Persistent link: https://www.econbiz.de/10012869223
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Keiretsu and Relationship-Specific Investment : A Barrier to Trade?
Spencer, Barbara J.; Qiu, Larry D. - 2021
This paper develops a model of informal procurement within Japanese keiretsu so as to consider effects on intermediate-good imports, such as auto parts. Parts-suppliers make relationship-specific investments that benefit the auto-maker and prices are determined by bargaining after investment has...
Persistent link: https://www.econbiz.de/10013240947
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Trade and Search : Social Capital, Sogo Shosha, and Spillovers
Rauch, James E. - 2022
A network/search view of international trade in differentiated products is proposed. It is shown that this view can explain the importance of ethnic and extended family ties in trade, the success of diversified trading intermediaries such as Japan's sogo shosha, and the ubiquity of government...
Persistent link: https://www.econbiz.de/10013322117