Anatomy of a Market Failure: NYSE Trading Suspensions (1974–1988)

A cross-sectional analysis of all trading suspensions that occurred during the period 1974–1988 in the New York Stock Exchange reveals that, though the desire to maintain price continuity remains an important motivation to suspend trade, inventory-imbalance fears are pronounced for large firms. Adverse-selection concerns afflict all news-related suspensions irrespective of firm size. Furthermore, we find substitutability among the various dimensions of liquidity: Although large- cap stocks have lower bid-ask spreads, they halt more often. A time series analysis shows that the resiliency of the exchange—its ability to absorb severe volatility shocks—has improved in this period.     

Subsidy policies with capital accumulation: Maintaining employment levels

We study a dual economy model of growth and unemployment in the presence of Harris-Todaro type labor migration. The model is a discrete time model of economic growth with given population but endogenous migration of labor. The economy tries to reach development in the quickest possible time while not allowing unemployment to rise above a socially acceptable level. We characterize situations under which maximizing the accumulation of capital in each period is optimal. We also study how particular taxes and subsidies affect unemployment and capital accumulation. Finally, we show that a higher initial capital stock does not necessarily mean a quicker attainment of self-sustained full employment.     

Lifecycle Pricing for Installed Base Management with Constrained Capacity and Remanufacturing

Installed base management is the policy in which the manufacturer leases the product to consumers, and bundles repair and maintenance services along with the product. In this article, we investigate for the optimal leasing price and leasing duration decisions by a monopolist when the production and servicing capacity are constrained. The effect of diffusion of consumers in the installed base is considered, with the ownership of the product resting with the monopolist during the product lifecycle. The monopolist operating the installed base jointly optimizes the profits from leasing the product/service bundle along with maintenance revenues and remanufacturing savings. We formulate the manufacturer's problem as an optimal control problem and show that the optimal pricing strategy of the firm should be a skimming strategy. We also find that the effect of remanufacturing savings on the pricing decision and the length of the leasing duration changes significantly depending on the duration of the product's lifecycle. If the product lifecycle is long and remanufacturing savings are low, the firm should offer a shorter leasing duration, whereas if the remanufacturing savings are high, the firm should optimally offer a higher leasing duration. In contrast, if the time duration of the product lifecycle is low and remanufacturing savings are low, the firm prefers to offer a shorter leasing duration, whereas if the remanufacturing savings are high, the firm should optimally have a longer leasing duration. The article also shows that if the production capacity is small, the manufacturer increases the leasing duration. If the production capacity is very small, the manufacturer sets the leasing duration to be equal to the product lifecycle and does not use remanufacturing.     

Goodness-of-Fit Testing for Exponential Polynomial Growth Curves

A goodness-of-fit test is proposed for the family of exponential polynomial growth curve models (EPGCM; Heinen, 1999 Heinen , M. ( 1999 ). Analytical growth equations and their Genstat 5 equivalents . Netherlands J. Agricult. Sci. 47 : 67 – 89 .[Web of Science ®] , [Google Scholar]), which has wide applications in different areas of science. The exponential growth curve model (EGCM), the most prominent member of the EPGCM family, is a simple and biologically meaningful growth model. Other members of the EPGCM family also cover many realistic growth processes. Thus, a goodness-of-fit test for the EPGCM class has substantial practical value. The goodness-of-fit test developed here is based on the properties of finite differences. The performance of the theory developed is illustrated through simulation and analysis of real data.