Search results for "microeconomics"
showing 10 items of 442 documents
Network Positions and the Probability of Being Acquired: An Empirical Analysis in the Biopharmaceutical Industry
2016
This paper examines the relationship between the firm's direct ties, its inter-firm network prominence and its likelihood of being acquired. The authors argue that firm's direct ties and prominence enhance the firm's visibility and signal its quality – and thus foster the firm's likelihood of being acquired. However, higher levels of direct ties and prominence, by providing access to resources and the firm's status, respectively, increase the firm's ability to remain independent and thus reduce its likelihood of being acquired. Thus, the authors posit the overall relation as an inverted U-shaped. Furthermore, they show that, for firms that undergo an initial public offering, the aforementio…
To lead or to wait? An application to internationalization strategies under demand uncertainty
2019
We examine the exports versus foreign direct investment (FDI) decision under demand uncertainty for an asymmetric cost duopoly. One of the firms can lead entry before demand realization or retain flexibility enjoying an informational advantage. When the time value of information is small and for sufficiently low investment costs, follow‐the‐leader behavior in FDI arises. Relatively high investment (fixed) costs result in follow‐the‐leader exporting behavior. When the time value of information becomes significant, the potential leader will opt for a wait‐and‐see strategy. For intermediate values of investment costs, the efficient firm invests, while the rival chooses to export.
The forager's dilemma: food sharing and food defense as risk-sensitive foraging options.
2003
Although many variants of the hawk-dove game predict the frequency at which group foraging animals should compete aggressively, none of them can explain why a large number of group foraging animals share food clumps without any overt aggression. One reason for this shortcoming is that hawk-dove games typically consider only a single contest, while most group foraging situations involve opponents that interact repeatedly over discovered food clumps. The present iterated hawk-dove game predicts that in situations that are analogous to a prisoner's dilemma, animals should share the resources without aggression, provided that the number of simultaneously available food clumps is sufficiently la…
THE SHAPLEY-SOLIDARITY VALUE FOR GAMES WITH A COALITION STRUCTURE
2013
A value for games with a coalition structure is introduced, where the rules guiding cooperation among the members of the same coalition are different from the interaction rules among coalitions. In particular, players inside a coalition exhibit a greater degree of solidarity than they are willing to use with players outside their coalition. The Shapley value is therefore used to compute the aggregate payoffs for the coalitions, and the solidarity value to obtain the payoffs for the players inside each coalition.
Stackelberg-Walras and Cournot-Walras equilibria in mixed markets: a comparison
2012
In this note, we compare two strategic general equilibrium concepts: the Stackelberg-Walras equilibrium and the Cournot-Walras equilibrium. We thus consider a market exchange economy embodying atoms and a continuum of traders. It is shown that, when the preferences of the small traders are represented by Cobb-Douglas utility functions, the Stackel-berg-Walras and the Cournot-Walras equilibria can coincide only if 1) the endowments and preferences of atoms are identical and 2) the elasticity of the followers’ best response functions are equal to zero in equilibrium.
Modelling Electricity Price Expectations in a Day-Ahead Market: A Case of Latvia
2016
Abstract The paper aims at modelling the electricity generator’s expectations about price development in the Latvian day-ahead electricity market. Correlation and sensitivity analysis methods are used to identify the key determinants of electricity price expectations. A neural network approach is employed to model electricity price expectations. The research results demonstrate that electricity price expectations depend on the historical electricity prices. The price a day ago is the key determinant of price expectations and the importance of the lagged prices reduces as the time backwards lengthens. Nine models of electricity price expectations are prepared for different natural seasons an…
The Value of Auditor Industry Specialization: Evidence from a Structural Model
2021
ABSTRACT This study investigates the value of auditor industry specialization. In the first step, we use a discrete choice model to derive the first-order demand for auditor industry specialization. Our results reveal that clients have a general preference for auditor industry specialization, relating to both audit firm and audit office specialization. We observe that specializations at the audit firm and audit office level are substitutes. We also find that larger, more complex clients have a stronger demand for industry specialization at the audit office level. In the second step, we use the results from the discrete choice model to quantify the value of auditor industry specialists for c…
How Long-Term Contracts can Mitigate Inefficient Renegotiation Arising Due to Loss Aversion
2021
A loss-averse buyer and seller face an uncertain environment. Should they write a long-term contract or wait until the state of the world is realized? I show that simple long-term contracts perform better than insinuated in Herweg and Schmidt (2015), even though loss aversion makes renegotiation sometimes inefficient. During renegotiation, the outcome induced by the long-term contract constitutes the reference point to which the parties compare gains and losses induced by the renegotiated transaction. Whereas Herweg and Schmidt consider that the long-term contract is always performed, it should not in "bad" states. This alters the threat point in renegotiation, making it easier to renegotia…
Dominating Clasp of the Financial Sector Revealed by Partial Correlation Analysis of the Stock Market
2010
What are the dominant stocks which drive the correlations present among stocks traded in a stock market? Can a correlation analysis provide an answer to this question? In the past, correlation based networks have been proposed as a tool to uncover the underlying backbone of the market. Correlation based networks represent the stocks and their relationships, which are then investigated using different network theory methodologies. Here we introduce a new concept to tackle the above question--the partial correlation network. Partial correlation is a measure of how the correlation between two variables, e.g., stock returns, is affected by a third variable. By using it we define a proxy of stoc…
Multidimensional social capital in new ventures
2013
This paper analyzes and provides empirical evidence on how three different dimensions of social capital (structural, relational, and resources) have a direct causal relation on the performance of financial service start-ups. To this end, a structural equation model is estimated and validated from a database, including information from 142 Argentinean entrepreneurs who answered a questionnaire specifically designed for this research. The main finding of the paper is that the main source of value of social capital for an entrepreneur is the existence of high-quality links. Moreover, the quality of the entrepreneur's links is even more important than their quantity. This conclusion has relevan…