We explore the extent to which the decisions of participants in a speculative market effectively account for information contained in prices and price movements. The horserace betting market is chosen as an ideal environment to explore these issues. A conditional logit model is constructed to determine winning probabilities based on bookmakers’ closing prices and the time indexed movement of pr...

A statistical generalization is made of microeconomics in the spirit of going from classical to statistical mechanics. The price and quantity of every commodity1 traded in the market, at each instant of time, is considered to be an independent random variable: all prices and quantities are considered to be stochastic processes, with the observed market prices being a random sample of the stocha...

Analysis of the welfare effect of advertising depends critically upon the effect of advertising on market prices. In many circumstances, advertising that leads to higher (lower) market prices is overproduced (underproduced) from society s perspective. This paper demonstrates that these predictions may not hold when consumer search costs are important. A model is developed to show how advertisin...

This paper argues that the market rules governing the operation of a re-structured electricity market in combination with its market structure can have a substantial impact on behavior of marketclearing prices. Using evidence on the design of electricity markets in England and Wales, Norway, the state of Victoria in Australia and New Zealand, this paper illustrates that market structure and mar...

Little is known about the prices firms pay for repurchases. We compile a U.S. dataset of actual repurchase prices paid, and we compare that price to the average market price. We find that firms repurchase at significant lower prices than the market average. Firms' ability to time the market varies cross-sectionally: less frequent repurchasers obtain significantly lower prices, as do firms repur...

A model of a decentralized market is developed that features search frictions, advertised prices and bargaining. Sellers can post ask prices to attract buyers through a process of directed search, but ex post there is the possibility of negotiation. Similarly, buyers can post negotiable bid prices to attract sellers. Even when transaction prices often differ from quoted prices, bid and ask pric...

This paper argues that the market rules governing the operation of a re-structured electricity market in combination with its market structure can have a substantial impact on behavior of marketclearing prices. Using evidence on the design of electricity markets in England and Wales, Norway, the state of Victoria in Australia and New Zealand, this paper illustrates that market structure and mar...

Rice production in most of Asian countries has been increased more rapidly than population and this has been led to increase in supply and proportionately decrease in the real price of rice in world and domestic markets. Furthermore, together with growth in production and national gross income of the country per-capita income has been increased and also demand for rice at national and internati...