Incumbent vulnerability and entry in gubernatorial elections: The case of former governors

The vulnerability hypothesis predicts strategic, quality candidates only challenge weak incumbents. House election studies support this hypothesis. State level analyses produce mixed results. We test whether incumbent vulnerability affects the entry of one kind of strategic actor – former governors. Former governors are an ideal test case. Having already served in the state's highest office, they represent the highest quality and perhaps most strategic candidates who run for state office. Our results show that performance in the previous election, one measure of incumbent vulnerability, does not affect former governor entry. However, incumbent vulnerability measured as recent economic performance and number of other quality candidates appearing in a former governor's party primary does affect entry in general elections.     

Inequality Constraints in the Univariate GARCH Model

To keep the conditional variances generated by the GARCH (p, q) model nonnegative, Bollerslev imposed nonnegativity constraints on the parameters of the process. We show that these constraints can be substantially weakened and so should not be imposed in estimation. We also provide empirical examples illustrating the importance of relaxing these constraints.     

MUST‐TAKE CARDS: MERCHANT DISCOUNTS AND AVOIDED COSTS

Antitrust authorities often argue that merchants cannot reasonably turn down payment cards and therefore must accept excessively high merchant discounts. The paper attempts to shed light on this must‐take cards view from two angles. First, the paper gives some operational content to the notion of must‐take card through the avoided‐cost test or tourist test: would the merchant want to refuse a card payment when a non‐repeat customer with enough cash in her pocket is about to pay at the cash register? It analyzes its relevance as an indicator of excessive interchange fees. Second, it identifies four key sources of potential social biases in the payment card systems' determination of interchange fees and compares the industry and social optima both in the short term (fixed number of issuers) and the long term (in which issuer offerings and entry respond to profitability).