Tests for Equality of Survival Distributions Against Non-Location Alternatives

We propose new two andk-sample tests for evaluating the equality of survival distributions against alternatives that include crossing of survival functions, and proportional and monotone hazard ratios. The tests allow for right censored data. The asymptotic power against local alternatives is investigated. Simulation results demonstrate that the new tests are more powerful than known tests when survival functions cross. We apply the tests to a well known study of chemo- and radio-therapy conducted by the Gastrointestinal Tumor Study Group. TheP-values for both proposed tests are much smaller than for other known tests.     

Estimation in Degradation Models with Explanatory Variables

Influence of covariates on degradationis modelled. Models which include dependence of the intensityof the process of traumatic events on the degradation level arealso discussed. Estimation of reliability and degradation characteristicsfrom data with covariates is considered in dynamic environments.     

SOME EMPIRICAL EVIDENCE ON THE EFFECTIVENESS OF ANTIMERGER RELIEF IN THE UNITED STATES

The extent of structural relief obtained by the government in a Section 7 settlement is modeled as an outcome of a bargaining game between the antitrust agency and parties to the merger. This framework is applied to data from 73 Section 7 cases settled during 1990–2000. The fraction of competitive overlap subject to divestiture is shown to depend on the extent of merger-specific efficiencies, the anticompetitive potential of the merger, and the hostage effect facing the merging firms, as well as the degree of media coverage of the case, the workload of the agency, and the partisan composition of Congress.(JEL L44 , C24 )     

Decentralized Trading With Private Information

The paper studies how asset prices are determined in a decentralized market with asymmetric information about asset values. We consider an economy in which a large number of agents trade two assets in bilateral meetings. A fraction of the agents has private information about the asset values. We show that, over time, uninformed agents can elicit information from their trading partners by making small offers. This form of experimentation allows the uninformed agents to acquire information as long as there are potential gains from trade in the economy. As a consequence, the economy converges to a Pareto efficient allocation.     

Optimal Dynamic Pricing of Perishable Items by a Monopolist Facing Strategic Consumers

We introduce a dynamic pricing model for a monopolistic company selling a perishable product to a finite population of strategic consumers (customers who are aware that pricing is dynamic and may time their purchases strategically). This problem is modeled as a stochastic dynamic game in which the company's objective is to maximize total expected revenues, and each customer maximizes the expected present value of utility. We prove the existence of a unique subgame‐perfect equilibrium pricing policy, provide equilibrium optimality conditions for both customer and seller, and prove monotonicity results for special cases. We demonstrate through numerical examples that a company that ignores strategic consumer behavior may receive much lower total revenues than one that uses the strategic equilibrium pricing policy. We also show that, when the initial capacity is a decision variable, it can be used together with the appropriate pricing policy to effectively reduce the impact of strategic consumer behavior. The proposed model is computationally tractable for problems of realistic size.