Functionally Compatible Local Characteristics for the Local Specification of Priors in Graphical Models

Abstract.  The local specification of priors in non-decomposable graphical models does not necessarily yield a proper joint prior for all the parameters of the model. Using results concerning general exponential families with cuts, we derive specific results for the multivariate Gamma distribution (conjugate prior for Poisson counts) and the Wishart distribution (conjugate prior for Gaussian models). These results link the existence of a locally specified joint prior to the solvability of a related marginal problem over the cliques of the graph.     

THE IMPACT OF MERGERS ON FARES STRUCTURE: EVIDENCE FROM EUROPEAN LOW‐COST AIRLINES

This paper examines mergers that lead to an almost immediate replacement of the target firm's business model in favor of that of the acquiring firm. We examine the post‐merger behavior of the two leading European dedicated low‐cost airlines, EasyJet and Ryanair, each acquiring another low‐cost airline, Go Fly and Buzz, respectively. We find that both takeovers had an immediate and sustained impact on both the pricing structures and the extent of intertemporal price schedules used on the acquired routes, with early booking fares noticeably reduced and only very late booking fares increased. The analysis suggests that the takeovers had a net beneficial effect for consumers, at least in price terms, as a consequence of the introduction of the acquiring firms' business models and associated yield management pricing systems. (JEL L11, L13, L93)