We study a first price auction preceded by a negotiation stage, during which bidders may form a bidding ring. We prove that in the absence of external effects the all-inclusive ring forms in equilibrium, allowing ring members to gain the auctioned object for a minimal price. However, identity dependent externalities may lead to the formation of small rings, as often observed in practice. Potent...

WHO and its partners recommend the use of auto-disable syringes, "bundled" with the supply of vaccines when donor dollars are used, in all mass immunization campaigns, and also strongly advocate their use in routine immunization programmes. Because of the relatively high price of auto-disable syringes, WHO's Technical Network for Logistics in Health recommends that activities be initiated to en...

Global corporations have to determine transfer prices for products that are traded between wholly owned subsidiaries located in different countries. The transfer prices are often based on a common fixed markup factor multiplied by the product value at that point in the supply chain, which can be taken as the absorption cost, including direct labor and raw materials, indirect variable and fixed ...

How Do Stamp Duties Affect the Housing Market? Land transfer taxes are a substantial portion of the cost of moving house in many developed countries. Since stamp duties are endogenous with respect to the house price, we create an instrumental variable that is the stamp duty on a property, given that postcode’s starting house price and the national house price trend. In a specification with post...

Reverse mortgages are new financial products that allow the elders to convert their home equity into cash until they die. From the provider’s perspective, longevity risk and house price risk are the major risks involved with reverse mortgages. This paper proposes a securitization method to transfer the risks associated with reverse mortgages and focuses on tranching longevity and house price ri...

Firms sometimes write price lists or catalogs for their exports, so they set prices for a period of time and do not adjust prices during that interval in response to changes in their environment. The firm sets the price either in its own currency or the importer’s currency. This paper draws a simple link between the choice of currency and the pricing decision of a firm that changes prices in re...

Traditionally, policymakers and financial markets have regarded the “core” consumer price index (CPI) as a key inflation indicator. The core CPI, a special index published by the Bureau of Labor Statistics (BLS), excludes the volatile prices of food and energy. In excluding these components, BLS recognizes that prices that swing dramatically in response to unusual shifts in weather and other un...

For utility maximization problems under proportional transaction costs, it has been observed that the original market with transaction costs can sometimes be replaced by a frictionless shadow market that yields the same optimal strategy and utility. However, the question of whether or not this indeed holds in generality has remained elusive so far. In this paper we present a counterexample whic...

This paper examines the equilibrium growth effect of money/inflation within a standard one-sector AK model of endogenous growth with the most generalized cash-in-advance constraint and wealth-enhanced preferences for social status. We show that the sign for the correlation between money and output growth depends crucially on (i) the liquidityconstrained ratio of consumption to investment expend...