Why Do We Observe Stockless Operations on the Internet? Stockless Operations Under Competition

Due to the proliferation of electronic commerce and the development of Internet technologies, many firms have considered new pricing‐inventory models. In this paper, we study the role of stockless (i.e., zero‐inventory) operations in online retailing by a considering duopoly competition in which two retailers compete to maximize profit by jointly optimizing their pricing and inventory decisions. In our model, the retailers are allowed to choose either an in‐stock policy or stockless operations with a discounted price. We first present the characteristics and properties of the equilibrium. We then demonstrate that the traditional outcome of asymmetric Bertrand competition is observed under head‐to‐head competition. However, when the two firms choose different operational policies, with corresponding optimal pricing, they can share the market under certain conditions. Finally, we report interesting observations on the interaction between pricing and inventory decisions obtained from an extensive computational study.     

Geometric Ergodicity and Moment Conditions for a Seasonal GARCH Model with Periodic Coefficients

A seasonal GARCH process with periodic coefficients is considered and conditions for periodic stationarity, geometric ergodicity, β-mixing property with exponential decay rate, and existence of higher-order moments are obtained.     

On the Choice of Nonparametric Entropy Estimator in Entropy-Based Goodness-of-Fit Test Statistics

Entropy-based goodness-of-fit test statistics can be established by estimating the entropy difference or Kullback–Leibler information, and several entropy-based test statistics based on various entropy estimators have been proposed. In this article, we first give comments on some problems resulting from not satisfying the moment constraints. We then study the choice of the entropy estimator by noting the reason why a test based on a better entropy estimator does not necessarily provide better powers.     

Likelihood ratio type unit root tests for ar(1)models with nonconsecutive observations

For the nonconsecutively observed or missing data situation likelihood ratio type unit root tests in AR(1)models containing an intercept or both an intercept and a time trend are proposed and are shown to have the same limiting distributions as the likelihood ratio tests for the complete data case as tabulated by Dickey and Fuller(1981). Some simulation results on our tests in finite samples under A–B sampling schemes are also presented.     

Testing the Null Hypothesis of Nonstationary Long Memory Against the Alternative Hypothesis of a Nonlinear Ergodic Model

Interest in the interface of nonstationarity and nonlinearity has been increasing in the econometric literature. This paper provides a formal method of testing for nonstationary long memory against the alternative of a particular form of nonlinear ergodic processes; namely, exponential smooth transition autoregressive processes. In this regard, the current paper provides a significant generalization to existing unit root tests by allowing the null hypothesis to encompass a much larger class of nonstationary processes. The asymptotic theory associated with the proposed Wald statistic is derived, and Monte Carlo simulation results confirm that the Wald statistics have reasonably correct size and good power in small samples. In an application to real interest rates and the Yen real exchange rates, we find that the tests are able to distinguish between these competing processes in most cases, supporting the long-run Purchasing Power Parity (PPP) and Fisher hypotheses. But, there are a few cases in which long memory and nonlinear ergodic processes display similar characteristics and are thus confused with each other in small samples.     

Hierarchically penalized quantile regression with multiple responses

We study variable selection in quantile regression with multiple responses. Instead of applying conventional penalized quantile regression to each response separately, it is desired to solve them simultaneously when the sparsity patterns of the regression coefficients for different responses are similar, which is often the case in practice. In this paper, we propose employing a hierarchical penalty that enables us to detect a common sparsity pattern shared between different responses as well as additional sparsity patterns within the selected variables. We establish the oracle property of the proposed method and demonstrate it offers better performance than existing approaches.     

The quality of municipal service: Concept,measure and results

This article presents a systematic discussion of the concept of the quality of municipal services. Based upon the argument that service quality is a subjective and collective experience of the citizenry, the quality of municipal service is conceptualized is the interaction of two components: (1) the level of citizen satisfaction with the service and (2) the extent of variation in the distribution of service satisfaction across neighbornoods within a community. To measure these two components, Indices of Service Adequacy and Service Equality are constructed. The indices are employed in the analysis of survey data collected from three Illinois middle-size cities in order to assess and compare their service qualities in the areas of police protection, street maintenance and public education. The findings suggest that citizens of the three cities are less than highly satisfied with the quality of these public services.     

Quantity Discount‐Based Inventory Coordination: Effectiveness and Critical Environmental Factors

It is understood that quantity discounts provide a practical foundation for coordinating inventory decisions in supply chains. The primary objective of this research is to test, under a variety of environmental conditions, the effectiveness of quantity discounts as an inventory coordination mechanism between a buyer and a supplier. A comprehensive simulation experiment with anova has been designed to investigate the impacts of (1) choice of quantity discount‐based inventory coordination policies, (2) magnitude of demand variation, (3) buyer's and supplier's relative inventory cost structure, and (4) buyer's economic time‐between‐orders on the effectiveness of supply chain inventory coordination. The analytical results confirm that the quantity discount policies have managerial properties as a mediator for inventory coordination. The results also show that the performance of quantity discount‐based inventory coordination policies is influenced significantly by environmental factors, such as the magnitude of demand variation, the buyer's and the supplier's inventory cost structure, and the buyer's economic time‐between‐orders.     

LIQUIDITY AND CONTAGION: THE CRISIS OF 1763

The financial crisis that swept across northern Europe in 1763 bears a strong resemblance to more recent episodes of financial distress. The combination of the specific contractual arrangements at the time, interlocking credit relationships, and the high leverage of market participants triggered distress sales of assets, leading to a severe liquidity crisis. Hence, the crisis is an early instance of contagion on the asset side of the balance sheet. We highlight the salient features of the 1763 crisis and propose a stylized model of the events. While the financial institutions have changed fundamentally in the intervening 200 or so years, the underlying problems appear to be universal. (JEL: 6621, E44, N23)