Market Structure Matters

2018 ◽  
Keyword(s):  
Market Structure ◽  
Market Structures

Richard Roll observed that continuous markets are more volatile than other market structures. If it is true that continuous markets induce volatility, then unless we change that market structure, we will continue to be plagued with sporadic bursts of nonfunctional, uninformative volatility. This article looks to the underlying reasons and suggests a more serviceable market structure.

Understanding & Serving Readers: The Problem of Fuzzy Market Structure

1993 ◽  
Vol 14 (2) ◽  
pp. 55-67 ◽  
Author(s):  
Stephen Lacy
Keyword(s):  
Market Structure ◽  
Market Structures

Newspapers exist in markets that are difficult to define and serve. Market structures are beyond their control, but not beyond their understanding – and their survival will depend on how well newspapers understand.

scholarly journals MARKET STRUCTURE, SECURITY PRICES, AND INFORMATIONAL EFFICIENCY

1997 ◽  
Vol 1 (1) ◽  
pp. 169-205 ◽  
Author(s):  
JENNIFER HUANG ◽  
JIANG WANG
Keyword(s):  
Market Structure ◽  
Private Information ◽  
Equity Premium ◽  
Price Volatility ◽  
Securities Market ◽  
Informational Efficiency ◽  
Derivative Securities ◽  
Security Prices ◽  
Market Structures

We consider an economy with an incomplete securities market and heterogeneously informed investors. Each investor trades in the market to hedge the risk to his endowment and to speculate on future security payoffs using his private information. We examine the efficiency of the securities market in allocating risk and transmitting information under different market structures, as defined by the set of securities traded in the market. We show that the introduction of derivative securities can decrease the market's efficiency in revealing information on security payoffs, and increase the equity premium and price volatility in the market.

Business models for flight-centric air traffic control

2019 ◽  
Vol 20 (4) ◽  
pp. 319-332
Author(s):  
Engin Zeki ◽  
Paula Leal de Matos ◽  
Kirsteen Purves ◽  
Marco Gibellini
Keyword(s):  
Market Structure ◽  
Traffic Control ◽  
Air Traffic Control ◽  
Business Models ◽  
Service Providers ◽  
Air Traffic ◽  
Market Structures ◽  
New Concepts ◽  
Navigation Service ◽  
The Impact

This article explores the impact that flight-centric air traffic control (ATC), a concept under development, has on ATC market structure and ATC business models. Flight-centric operations bring forth changes in how the stakeholders adapt their roles to the emerging ATC market. We compared current ATC and market structures with the emerging flight-centric concept and analyzed the market changes in structure and competition from the emergence of flight-centric operations using Porter’s five forces model. Four potential business models for flight-centric ATC are identified and described: current air navigation service providers adapt, vertical integration by airlines, new ATC providers, and the network manager as capacity-demand manager. In the final chapter, we briefly describe the future regulation of the market for flight-centric operations. We conclude that new concepts and technologies, such as flight-centric operations, create the necessary dynamics for change in the current market structure by unbundling of the market.

scholarly journals Risk-Averse Managers, Labour Market Structures, Public Policies and Discrimination

2017 ◽  
Vol 17 (1) ◽  
Author(s):  
Julien Picault
Keyword(s):  
Market Structure ◽  
Labour Market ◽  
Wage Inequality ◽  
Statistical Discrimination ◽  
Hiring Practices ◽  
Risk Averse ◽  
Employment Equity ◽  
Second Moment ◽  
Market Structures ◽  
Minority Participation

AbstractThis article presents a model to analyze the effects of first and second-moment statistical discrimination on the labour market. Second-moment statistical discrimination occurs when risk-averse managers make decisions regarding wage and hiring based on productivity variances. We provide a framework exploring managers’ discrimination based on differences in average productivity and in variance of productivity. Furthermore, since discrimination is composed of two types (wage and hiring discrimination), our model allows for the interdependence between hiring practices and wages. Using our model, we examine the effects of various anti-discrimination policies along with changes to the labour market structure. We show that managers’ behaviour may be driven by anti-discrimination policies and labour market structures. A firm reduces hiring when required to implement anti-discrimination policies to address wage inequality. A firm applying policies to promote employment equity must stimulate minority participation. A change in labour market structure does not alter the efficiency of policies promoting employment equity, but it does alter the efficiency of policies aimed at reducing wage differences.

scholarly journals Market Structure and Equilibrium in a Hydro Dominated Electricity Market

2021 ◽  
Author(s):  
◽  
Andrea Lu
Keyword(s):  
Decision Making ◽  
New Zealand ◽  
Market Structure ◽  
Resource Availability ◽  
Electricity Market ◽  
Marginal Cost ◽  
Electricity Generation ◽  
Water Usage ◽  
Gas Generation ◽  
Market Structures

<p>Hydro generation plays an important role in electricity generation, especially in countries like New Zealand where 60 to 65 percent of electricity is generated in the hydro sector. In contrast to other types of electricity generation, for example gas generation, hydro generation has two unique properties: uncertainty regarding future resource availability and the ability to store the nature resource. Although hydro resource is often considered to be ‘free’, the ability to store creates an endogenous hidden marginal cost of water: usage today entails the loss of the ability to be used in future periods. Therefore pricing in a hydro dominated electricity market should be different from the approaches applied in markets that consist of generation methods that use only non-storable resources. This paper introduces a tractable approach to model a hydro dominated electricity market that incorporates inter-temporal decision making. It enables us to compute the equilibrium outcomes and the endogenous hidden marginal cost of water under different market structures.</p>

Market Structure of the Banking Sector and the Turkish Banking Sector

2021 ◽  
pp. 584-604
Author(s):  
Nizamülmülk Güneş
Keyword(s):  
Market Structure ◽  
Banking Sector ◽  
Monopolistic Competition ◽  
Perfect Competition ◽  
Main Function ◽  
Market Failures ◽  
Barriers To Entry ◽  
Entry And Exit ◽  
Market Structures ◽  
Intermediary Role

The main function of banking is to contribute to economic growth by providing sectors outside of the finance section with financing that they need and fulfilling an intermediary role between lenders and borrowers. This intermediary function increases the importance of the banking sector compared to other sectors of the economy. Market structures are very significant in terms of firms' market entry and exit and stay on the market. Markets are subject to four different distinction as perfect competition, monopoly, oligopoly, and monopolistic competition markets. The objective in the market is to ensure efficiency in production and sales by pulling down the costs of production through competition. The factors determining the market structure are the numbers of firms in the sector, the degree of restriction on the entry and exit of firms in the industry, the number of those requesting products and homogeneity degree of product produced The banking sector, unlike other sectors, has unique characteristics. Competition policies which are valid in other sectors are not appropriate for the banking industry. Market openness for instability and market failures change the structure of competition. Asymmetric information, product replacement costs and externalities create barriers to entry which, allows banks to be in a dominant position in their markets. This study examines the main indicators showing concentration, effectiveness, depth, and intermediation functions of Turkish banking sector and investigates in which market structure the sector operates. In this regard, it has made policy recommendations over the results obtained.

An Application of the Scholes and Wolfson Model to Examine the Relation Between Implicit and Explicit Taxes and Firm Market Structure

1999 ◽  
Vol 21 (1) ◽  
pp. 1-19 ◽  
Author(s):  
Debra S. Callihan ◽  
Richard A. White
Keyword(s):  
Market Structure ◽  
Rate Of Return ◽  
Tax Rate ◽  
Market Structures ◽  
Structure Characteristics ◽  
Potential Market ◽  
Two Factors ◽  
Tax Returns ◽  
Implicit And Explicit ◽  
Market Structure Characteristics

A firm can take advantage of preferential tax provisions to lower its explicit tax burden. In the absence of market frictions, this differential tax treatment gives rise to differences in pre-tax returns across investments, defined as an implicit tax (Scholes and Wolfson 1992). Market structures that are other than perfectly competitive can impede the realization of implicit taxes (which represent lower pre-tax returns) by allowing firms to earn extra-normal after-tax returns (Wilkie 1992). This study estimates implicit tax rates and investigates the relation between a firm's implicit tax rate and two factors: (1) the pre-tax rate of return, and, (2) the potential market power of the firm, which could provide the opportunity to shift implicit (and explicit) tax burdens from the firm to consumers or labor. The results indicate that implicit taxes are significantly negatively related to the pre-tax rate of return and firm market structure characteristics. The interaction of pre-tax returns and firm market structure characteristics is positively related to implicit taxes, indicating that firm market structure may lead to a weakening of the strict negative relation between implicit taxes and pre-tax returns.

Market Structure and Competition in the Retail Discount Industry

2009 ◽  
Vol 46 (4) ◽  
pp. 453-466 ◽  
Author(s):  
Ting Zhu ◽  
Vishal Singh ◽  
Mark D. Manuszak
Keyword(s):  
Market Structure ◽  
Initial Model ◽  
Competitive Position ◽  
Local Markets ◽  
Market Structures ◽  
Discrete Game

This article examines competition among Wal-Mart, Kmart, and Target using two distinct but related approaches. The authors first develop and estimate a discrete game in which each chain's store presence and format decisions in local markets depend on the decisions of its competitors and market characteristics. This analysis is extended to evaluate the determinants of store revenues for each chain in local markets as a function of market characteristics, including the presence of competing firms. These regressions use the results of the initial model to correct for the endogeneity of observed market structures. The results from both exercises illustrate several important asymmetries across the firms. Kmart and Wal-Mart prefer similar markets, but Wal-Mart's competitive position is dominant enough to prevent Kmart's operation in otherwise attractive markets. In contrast, Target prefers substantially different market characteristics. In total, the results support a view of the industry as one in which Wal-Mart is dominant, Target serves more of a niche role, and Kmart struggles to find its footing.

scholarly journals Market Structure and Equilibrium in a Hydro Dominated Electricity Market

2021 ◽  
Author(s):  
◽  
Andrea Lu
Keyword(s):  
Decision Making ◽  
New Zealand ◽  
Market Structure ◽  
Resource Availability ◽  
Electricity Market ◽  
Marginal Cost ◽  
Electricity Generation ◽  
Water Usage ◽  
Gas Generation ◽  
Market Structures

<p>Hydro generation plays an important role in electricity generation, especially in countries like New Zealand where 60 to 65 percent of electricity is generated in the hydro sector. In contrast to other types of electricity generation, for example gas generation, hydro generation has two unique properties: uncertainty regarding future resource availability and the ability to store the nature resource. Although hydro resource is often considered to be ‘free’, the ability to store creates an endogenous hidden marginal cost of water: usage today entails the loss of the ability to be used in future periods. Therefore pricing in a hydro dominated electricity market should be different from the approaches applied in markets that consist of generation methods that use only non-storable resources. This paper introduces a tractable approach to model a hydro dominated electricity market that incorporates inter-temporal decision making. It enables us to compute the equilibrium outcomes and the endogenous hidden marginal cost of water under different market structures.</p>

scholarly journals Market Structure Analysis: Hierarchical Clustering of Products Based on Substitution-In-Use

1981 ◽  
Vol 45 (3) ◽  
pp. 38-48 ◽  
Author(s):  
Rajendra K. Srivastava ◽  
Robert P. Leone ◽  
Allan D. Shocker
Keyword(s):  
Market Structure ◽  
Structure Analysis ◽  
Hierarchical Clustering ◽  
Financial Services ◽  
Product Market ◽  
Product Usage ◽  
Market Structures ◽  
Market Structure Analysis ◽  
Paper Product ◽  
Usage Data

In this paper, product usage data, employing a substitution-in-use criterion, are analyzed and shown to yield managerially useful product-market structures for financial services. These structures are identified through a form of hierarchical clustering which is different from traditional clustering routines in that it focuses on the explained or accounted for variance in the categorization of objects, thereby reducing groupings due to chance covariation.

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