In this paper we propose the application of the original, superlative price index formula for the measurement of commodity substitution bias associated with Consumer Price Index (CPI). In our simulation study we compare CPI bias values calculated by using the original price index formula with those calculated on the basis of some known, superlative price indices.

We consider the complexity of decision making with regards to predatory pricing in multimarket oligopoly models. Specifically, we present multimarket extensions of the classical single-market models of Bertrand, Cournot and Stackelberg, and introduce the War Chest Minimization Problem. This is the natural problem of deciding whether a firm has a sufficiently large war chest to win a price war. ...

A primal index of productivity change is introduced which decomposes exactly in three components: technical change, technical efficiency change and average scale economies (radial scale change). The proposed index is invariant to movement along indifference surfaces and it collapses to the Malmquist index if the technology is locally constant returns to scale. It is the best linear approximatio...

This paper is concerned with the Bayesian analysis of stochastic volatility (SV) models with leverage. Specifically, the paper shows how the often used Kim et al. (1998) method that was developed for SV models without leverage can be extended to models with leverage. The approach relies on the novel idea of approximating the joint distribution of the outcome and volatility innovations by a suit...

Airline recovery presents very large and difficult problems requiring high quality solutions within very short time limits. To improve computational performance, various solution approaches have been employed, including decomposition methods and approximation techniques. There has been increasing interest in the development of efficient and accurate solution techniques to solve an integrated ai...

We examine ways to reformulate integer and mixed integer programs. Typically, but not exclusively, one reformulates so as to obtain stronger linear programming relaxations, and hence better bounds for use in a branch-and-bound based algorithm. First we cover reformulations based on decomposition, such as Lagrangean relaxation, the Dantzig-Wolfe reformulation and the resulting column generation ...

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...