This paper provides empirical evidence on the explanatory factors affecting introductory prices of new pharmaceuticals in a heavily regulated and highly subsidized market. We collect a data set consisting of all new chemical entities launched in Spain between 1997 and 2005, and model launching prices. We found that, unlike in the US and Sweden, therapeutically "innovative" products are not over...

We show that under horizontal differentiation pure symmetric Cournot equilibria exist if firms react to a rise in competitors’ output in such a way that their market price does not rise. This condition is related to strategic complementarity, but not to convexity or differentiability. We rule out multiple equilibria under some additional conditions and discuss stability and regularity of equili...

We develop a simple robust link between deep out-of-the-money American put options on a company’s stock and a credit insurance contract on the company’s bond. We assume that the stock price stays above a barrier B before default but drops below a lower barrier A after default, thus generating a default corridor [A, B] that the stock price can never enter. Given the presence of this default corr...

The surge in demand for utilizing public Cloud resources has introduced many trade-offs between price, performance and recently reliability. Amazon’s Spot Instances (SIs) create a competitive bidding option for public Cloud users at lower prices without providing reliability on services. It is generally believed that SIs reduce monetary cost to the Cloud users, however it appears from the liter...

Both financing and risk management involve promises to pay that need to be collateralized, resulting in a financing versus risk management trade-off. We study this trade-off in a dynamic model of commodity price risk management and show that risk management is limited and that more financially constrained firms hedge less or not at all. We show that these predictions are consistent with the evi...

We develop a simple model with technical and fundamental traders to explain the cyclical motion of commodity prices. The crucial element of our model is a nonlinear market impact of technical traders: Estimation of our STAR-GARCH model using monthly US corn price data reveals that technical traders increasingly enter the market as booms or slumps enlarge. One reason may be that they only gradua...

OBJECTIVE To investigate the availability of essential medicines and their prices in Hubei province. METHODS The survey assessed the prices and availability of essential medicines using the World Health Organization and Health Action International methodology. Data were collected from 18 public hospitals and 18 private pharmacies. At each facility the availability and prices of 39 innovator b...

This paper investigates entry decisions into first and second price auctions using an experimental design to extract information on willingness-to-pay to enter (WTE). We find that subjects tend to overpay to enter both auction formats. In particular, if the subjects believe they will be bidding against bidders following the risk-neutral Nash strategy, their WTE is greater than the optimal risk-...

OBJECTIVE To evaluate the prices and availability of paediatric essential medicines in Shaanxi Province, China. METHODS Price and availability data for 28 paediatric essential medicines were collected from 60 public hospitals and 60 retail pharmacies in six areas of Shaanxi Province using a standardised methodology developed by the World Health Organization and Health Action International, du...

This paper presents an econometric analysis of the effects of price support program and stocks on price dynamics and price volatility. Considering a price support program as a censoring scheme, market prices are specified as a dynamic Tobit model under time varying volatility. The model is applied to the U.S. nonfat dry milk market, based on monthly data for the period of 1970-2000. The econome...