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Demand Curves (demand + curve)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	66%
Engineering	16%
Humanities and Social Sciences	11%

Distribution within Business, Economics, Finance and Accounting

General & Introductory Economics	40%
General & Introductory Finance & Investments	33%
Econometrics	16%

Selected Abstracts

Actuarially Unfair Insurance and Downward-Sloping Demand Curves for Giffen Goods

THE MANCHESTER SCHOOL, Issue 4 2001
Christian E. Weber
Barzel and Suen (Economic Journal, Vol. 102 (1992), No. 413, pp. 896,905) have shown that, if households can purchase actuarially fair insurance against higher prices, then goods which would have upward-sloping demand curves in the absence of the price insurance will have downward-sloping demand curves when the insurance is available. This note builds on their analysis by showing that, if the utility function is additively separable, then goods which would be Giffen in the absence of the insurance still have downward-sloping demand curves even when the price insurance exhibits certain types of actuarial unfairness. [source]

Competing Mechanisms in a Common Value Environment

ECONOMETRICA, Issue 4 2000
Bruno Biais
Consider strategic risk-neutral traders competing in schedules to supply liquidity to a risk-averse agent who is privately informed about the value of the asset and his hedging needs. Imperfect competition in this common value environment is analyzed as a multi-principal game in which liquidity suppliers offer trading mechanisms in a decentralized way. Each liquidity supplier behaves as a monopolist facing a residual demand curve resulting from the maximizing behavior of the informed agent and the trading mechanisms offered by his competitors. There exists a unique equilibrium in convex schedules. It is symmetric and differentiable and exhibits typical features of market-power: Equilibrium trading volume is lower than ex ante efficiency would require. Liquidity suppliers charge positive mark-ups and make positive expected profits, but these profits decrease with the number of competitors. In the limit, as this number goes to infinity, ask (resp. bid) prices converge towards the upper (resp. lower) tail expectations obtained in Glosten (1994) and expected profits are zero. [source]

The Race to the Bottom, from the Bottom

ECONOMICA, Issue 290 2006
NANCY H. CHAU
The dominant perspective in discussions of labour and environmental standards and globalization is that of North,South competition and its impact on Northern standards. This paper presents an alternative perspective, that of South,South competition to export to the North and its impact on Southern standards. It develops a simple model of Southern competition, and demonstrates that whether a Southern race to the bottom is possible depends intricately on the Northern demand curve, the size of large exporters relative to each other and the relative size of the competitive fringe of small exporters. The possibility that Northern trade protectionism may undermine Southern standards is also examined. [source]

Rational Migration Policy Should Tolerate Non-zero Illegal Migration Flows: Lessons from Modelling the Market for Illegal Migration

INTERNATIONAL MIGRATION, Issue 1 2002
Horst Entorf
The debate on the immigration policies in OECD countries has turned its attention towards illegal migrants. Given that migration flows are determined by immigration laws, the probability of potential detection, penalties for unauthorized migrants and their employers, and income differences between sending and receiving countries, this paper presents a new approach to the problem of illegal migration, grounded on the economic theory of illegal behaviour. The framework considers the interaction of potential migrants, citizens, employers, and the government. After introducing the supply function of illegal migration and its determinants, the trade-off between social costs and benefits of preventing and combating illegal migration is demonstrated. This trade-off results in an optimal level of migration larger than zero. A complete "market model" of illegal migration is offered by presentation of a demand curve of illegal migration, based on the tolerance of the society towards clandestine foreigners. Equilibrium forces predict a non-zero level of illegal migration. The rule of law of our legal systems, according to which any illegal activity has to be reduced to zero, bears the danger of producing inefficient disequilibria. A reasonable policy of wanted and unwanted migration should address the question of how to allocate scarce resources. Ignoring social optima and equilibrium forces means to abandon public resources that could be used for other public assignments, such as schooling or foreign aid, for instance, i.e., measures that could strike the problem of illegal migration at its root. [source]

Application of local and global particle swarm optimization algorithms to optimal design and operation of irrigation pumping systems,

IRRIGATION AND DRAINAGE, Issue 3 2009
M. H. Afshar
stations de pompage; conception et exploitation; optimisation par essaims particulaires locale et globale Abstract A particle swarm optimization (PSO) algorithm is used in this paper for optimal design and operation of irrigation pumping systems. An irrigation pumping systems design and management model is first introduced and subsequently solved with the newly introduced PSO algorithm. The solution of the model is carried out in two steps. In the first step an exhaustive enumeration is carried out to find all feasible sets of pump combinations able to cope with a given demand curve over the required period. The PSO algorithm is then called in to search for optimal operation of each set. Having solved the operation problem of all feasible sets, the total cost of operation and depreciation of initial investment is calculated for all the sets and the optimal set and the corresponding optimal operating policy is determined. The proposed model is applied to the design and operation of a real-world irrigation pumping system and the results are presented and compared with those of a genetic algorithm. Two global and local versions of the PSO algorithm are used and their efficiencies are compared to each other and that of a genetic algorithm (GA) model. The results indicate that the proposed model in conjunction with the PSO algorithm is a versatile management model for the design and operation of real-world irrigation pumping systems. Copyright © 2008 John Wiley & Sons, Ltd. Un algorithme d'optimisation par essaims particulaires (PSO en anglais) est employé dans cet article pour la conception et l'exploitation optimale des systèmes d'irrigation avec pompages. Un modèle de conception et de gestion du système est d'abord présenté et ensuite résolu avec le nouvel algorithme PSO. La solution du modèle est effectuée dans deux étapes. Dans la première étape une énumération exhaustive est effectuée pour trouver toutes les combinaisons possibles de pompes capables de répondre à une courbe de demande donnée pendant la période souhaitée. L'algorithme d'optimisation par essaims particulaires est alors utilisé pour rechercher la gestion optimale de chaque ensemble. Ayant résolu le problème de gestion de toutes les combinaisons possibles, le coût d'exploitation et d'amortissement de l'investissement initial est calculé pour chacune et la combinaison optimale et sa stratégie de gestion optimale est déterminée. Le modèle proposé est appliqué à la conception et l'exploitation d'un système irrigué réel et les résultats sont présentés et comparés à ceux d'un algorithme génétique. Deux versions globales et locales de l'algorithme PSO sont employées et leurs efficacités sont comparées entre eux et avec celles d'un modèle à algorithme génétique. Les résultats indiquent que le modèle proposé associé à l'algorithme d'optimisation par essaims particulaires est un modèle souple pour la conception et l'exploitation systèmes irrigués réels avec pompage. Copyright © 2008 John Wiley & Sons, Ltd. [source]

Advertising's effect on the market demand elasticity: A note

AGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 2 2004
Henry W. Kinnucan
Using a simple market model and Frisch's duality relation, this report develops propositions about the relationship between advertising and the market demand elasticity that may prove useful in empirical research. In particular, we find that a parallel shift in a linear demand function always alters the market demand elasticity unless supply is unitary elastic. However, the elasticity change in most cases will be negligible. We also find that curve rotation does not imply that the demand elasticity has changed, and vice versa. Lastly, if the price level affects advertising's ability to shift the market demand curve, it must also be true that advertising affects the demand elasticity. The converse is also true, i.e., if advertising affects the demand elasticity, the price level must affect advertising's ability to shift the demand curve. [JEL citations: Q130, Q170, Q180.] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 181,188, 2004. [source]

INCOME DISPERSION AND PRICE DISCRIMINATION

PACIFIC ECONOMIC REVIEW, Issue 1 2006
Yong He
We first derive the linear demand curve in each market under plausible conditions, and then show that more markets (and consumers) are excluded under uniform pricing the higher are the inter-market income differences. We also show that adding markets, even of lower income levels than those of existing markets, helps to decrease prices and thus cause more markets to be served. Implications of intra-market income dispersion are also explored. [source]

Bargaining in the Shadow of War: When Is a Peaceful Resolution Most Likely?

AMERICAN JOURNAL OF POLITICAL SCIENCE, Issue 3 2009
Donald Wittman
This article derives the optimal bargaining strategies of the belligerents when each side has private but incomplete information about the expected outcome of a war, should it take place. I show that the aggressor's demand curve can be below the defender's offer curve, that wars are possible even when both sides are jointly pessimistic, and that the relative cost of a war can radically alter the types of disputes that end in war. A simple diagram provides the intuition for most of the major propositions. [source]

Wage formation and employment in a cointegrated VAR model

THE ECONOMETRICS JOURNAL, Issue 2 2001
Thórarinn G. Pétursson
This paper uses a general equilibrium, monopolistic competition model of wage bargaining between trade unions and firms to derive two steady state relations which are estimated within a cointegrated VAR framework using quarterly Danish data. The first cointegrating relation is the marginal productivity condition for labour, derived from profit maximization of firms who face a downward sloping demand curve for their product. The second cointegrating relation is a real wage relation, derived from the bargaining between trade unions and firms over wages, in the right-to-manage manner. The theoretical model is not rejected and the model displays parameter constancy throughout the estimation period and is able to forecast out-of-sample. [source]

Probabilistic seismic demand analysis of controlled steel moment-resisting frame structures

EARTHQUAKE ENGINEERING AND STRUCTURAL DYNAMICS, Issue 12 2002
Luciana R. Barroso
Abstract This paper describes a proposed methodology, referred to as probabilistic seismic control analysis, for the development of probabilistic seismic demand curves for structures with supplemental control devices. The resulting curves may be used to determine the probability that any response measure, whether for a structure or control device, exceeds a pre-determined allowable limit. This procedure couples conventional probabilistic seismic hazard analysis with non-linear dynamic structural analyses to provide system specific information. This method is performed by evaluating the performance of specific controlled systems under seismic excitations using the SAC Phase II structures for the Los Angeles region, and three different control-systems: (i) base isolation; (ii) linear viscous brace dampers; and (iii) active tendon braces. The use of a probabilistic format allows for consideration of structural response over a range of seismic hazards. The resulting annual hazard curves provide a basis for comparison between the different control strategies. Results for these curves indicate that no single control strategy is the most effective at all hazard levels. For example, at low return periods the viscous system has the lowest drift demands. However, at higher return periods, the isolation system becomes the most effective strategy. Copyright © 2002 John Wiley & Sons, Ltd. [source]

What Drives the S&P 500 Inclusion Effect?

FINANCIAL MANAGEMENT, Issue 4 2006
An Analytical Survey
We present an analytical survey of the explanations,price pressure, downward-sloping demand curves, improved liquidity, improved operating performance, and increased investor awareness,for the increase in stock value associated with inclusion in the S&P 500 Index. We find that increased investor awareness is the primary factor behind the cross-section of abnormal announcement returns. We also find some evidence of temporary price pressure around the inclusion date. We find no evidence that long-run downward-sloping demand curves for stocks, anticipated improvements in operating performance, or increased liquidity are related to the cross-section of announcement or inclusion returns. [source]

Seasonality and Wage Responsiveness in a Developing Agrarian Economy

OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 2 2004
Sunil Kanwar
Abstract This paper studies the wage responsiveness of labour supply and demand, simultaneously addressing the twin issues of the non-clearing of developing rural labour markets and seasonality. It employs a data set pertaining to south-central India, and limits itself to the agricultural market for daily-rated labour (by far the predominant form of wage contract in the sample villages). Estimating a theoretically robust and empirically justified disequilibrium model of the agricultural labour market, we find no evidence of backward-bending supply curves or ,vertical' demand curves, contrary to findings in the literature. Further, while the agricultural labour market appears to be in equilibrium during the kharif (or rainy) season, it manifests excess supply in the rabi (or post-rainy) season. [source]

PRODUCT OFFERING, PRICING, AND MAKE-TO-STOCK/MAKE-TO-ORDER DECISIONS WITH SHARED CAPACITY

PRODUCTION AND OPERATIONS MANAGEMENT, Issue 3 2002
GREGORY DOBSON
In an era of mass customization, many firms continue to expand their product lines to remain competitive. These broader product lines may help to increase market share and may allow higher prices to be charged, but they also cause challenges associated with diseconomies of scope. To investigate this tradeoff, we considered a monopolist who faces demand curves, which for each of its potential products, decline with both price and response time (time to deliver the product). The firm must decide which products to offer, how to price them, whether each should be make-to-stock (mts) or make-to-order (mto), and how often to produce them. The offered products share a single manufacturing facility. Setup times introduce disceonomies of scope and setup costs introduce economies of scale. We provide motivating problem scenarios, model the monopolist's problem as a non-linear, integer programming problem, characterize of the optimal policy, develop near-optimal procedures, and discuss managerial insights. [source]

Price Pressure around Mergers

THE JOURNAL OF FINANCE, Issue 1 2004
Mark Mitchell
ABSTRACT This paper examines the trading behavior of professional investors around 2,130 mergers announced between 1994 and 2000. We find considerable support for the existence of price pressure around mergers caused by uninformed shifts in excess demand, but that these effects are short-lived, consistent with the notion that short-run demand curves for stocks are not perfectly elastic. We estimate that nearly half of the negative announcement period stock price reaction for acquirers in stock-financed mergers reflects downward price pressure caused by merger arbitrage short selling, suggesting that previous estimates of merger wealth effects are biased downward. [source]

S&P 500 Index Additions and Earnings Expectations

THE JOURNAL OF FINANCE, Issue 5 2003
Diane K. Denis
Stock price increases associated with addition to the S&P 500 Index have been interpreted as evidence that demand curves for stocks slope downward. A key premise underlying this interpretation is that Index inclusion provides no new information about companies' future prospects. We examine this premise by analyzing analysts' earnings per share (eps) forecasts around Index inclusion and by comparing postinclusion realized earnings to preinclusion forecasts. Relative to benchmark companies, companies newly added to the Index experience significant increases in eps forecasts and significant improvements in realized earnings. These results indicate that S&P Index inclusion is not an information-free event. [source]

An Economic Justification for Open Access to Essential Medicine Patents in Developing Countries

THE JOURNAL OF LAW, MEDICINE & ETHICS, Issue 2 2009
Sean Flynn
This paper offers an economic rationale for compulsory licensing of needed medicines in developing countries. The patent system is based on a trade-off between the "deadweight losses" caused by market power and the incentive to innovate created by increased profits from monopoly pricing during the period of the patent. However, markets for essential medicines under patent in developing countries with high income inequality are characterized by highly convex demand curves, producing large deadweight losses relative to potential profits when monopoly firms exercise profit-maximizing pricing strategies. As a result, these markets are systematically ill-suited to exclusive marketing rights, a problem which can be corrected through compulsory licensing. Open licenses that permit any qualified firm to supply the market on the same terms, such as may be available under licenses of right or essential facility legal standards, can be used to mitigate the negative effects of government-granted patents, thereby increasing overall social welfare. [source]