We set up a rational expectations model in which investors trade a risky asset based on a private signal they receive about the quality of the asset, and a public signal that represents a noisy aggregation of the private signals of all investors. Our model allows us to examine what happens to...

We investigate the dominant role of advertising - whether it provides information or changes consumers' brand perceptions - for a wide range of product categories. For the empirical analysis, we assembled a panel data set that combines annual brand-level advertising expenditures for over three...

In this paper we discuss the potential for future electricity market restructuring in Quebec. In particular, we consider the political economy of the abolishment of the Heritage Pool requirement, which caps wholesale prices. Its elimination is challenging since it would result in higher retail...

There is a strong negative relationship between economic development and HIV/AIDS prevalence throughout the world. However in Sub-Saharan Africa where the epidemic is worst, this relationship does not hold. Some of the wealthier countries in this region have some of the highest rates of HIV/AIDS...

This paper takes advantage of the ban on advertising directed at children in the province of Quebec to study the effect of advertising in the children's breakfast cereal industry. Advertising is viewed alternatively as anti-competitive, if it increases brand loyalty, or as pro-competitive, if it...

Many heavily advertised consumer products are both well established and have no obvious quality variation. A signaling explanation for advertising in these product categories is therefore not compelling. In this paper we develop a model of firm advertising based on the notion that consumer...

This report characterizes the regulation of energy markets in general and focuses on the electricity and natural gas markets of Québec. Markets are regulated if they are deemed to represent natural monopoly situations or if unregulated firms would not take into account externalities that they...

Ce rapport aborde la question de la réglementation des marchés de l'énergie en général en mettant l'accent sur les marchés de l'électricité et du gaz naturel. On réglemente des marchés si l'on juge qu'ils représentent des situations de monopole naturel ou si l'on a des raisons de...

In this paper we model the market for a homogeneous good and examine the role of information in determining market outcomes. Unlike in Baye and Morgan (2001) where consumers can only learn about the prices charged by different firms by subscribing to an information intermediary’s service, we...

Many advertised products are established and have little quality variation. For these products advertising signaling explanations are unconvincing. We develop a coordination model of advertising with consumers observing ads probabilistically and never observing advertising levels. Consumers who...