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Excess Demand (excess + demand)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	75%

Selected Abstracts

Dynamic inventory management with cash flow constraints

NAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 8 2008
Xiuli Chao
Abstract In this article, we consider a classic dynamic inventory control problem of a self-financing retailer who periodically replenishes its stock from a supplier and sells it to the market. The replenishment decisions of the retailer are constrained by cash flow, which is updated periodically following purchasing and sales in each period. Excess demand in each period is lost when insufficient inventory is in stock. The retailer's objective is to maximize its expected terminal wealth at the end of the planning horizon. We characterize the optimal inventory control policy and present a simple algorithm for computing the optimal policies for each period. Conditions are identified under which the optimal control policies are identical across periods. We also present comparative statics results on the optimal control policy. © 2008 Wiley Periodicals, Inc. Naval Research Logistics 2008 [source]

Efficiency Pricing, Tenancy Rent Control and Monopolistic Landlords

ECONOMICA, Issue 278 2003
Kaushik Basu
This paper presents a model of ,tenancy rent control' where rent increases on, and evictions of, sitting tenants are prohibited but nominal rents for new tenants are unrestricted. If there is any inflation, landlords prefer to take short-staying tenants. If there is no way for landlords to tell a tenant's type, an adverse selection problem arises. If landlords have monoply power, then they may prefer not to raise the rent even when there is excess demand for housing. These ,efficiency rents' show that tenancy rent control can give rise to equilibria that look as if there were a flat ceiling on rents. [source]

Divergence of US and Local Returns in the After-market for Equity Issuing ADRs

EUROPEAN FINANCIAL MANAGEMENT, Issue 3 2004
Padma Kadiyala
F30; G12; G14 Abstract We study one-year post-listing prices and returns to equity issuing ADRs that listed in the US between January 1991 and October 2000. ADRs from countries that impose restrictions on capital flows are priced at a premium to their home market ordinaries. While the mean premium for the full sample is statistically indistinguishable from zero, after an adjustment for asynchronous trading, the magnitude of the premium to ADRs from restricted markets is 11.33% at the 300-day post listing interval, which is statistically significant. In the short run (30 days) following listing, the magnitude of the premium is larger for ADRs with larger excess demand from US investors. At the longer 300-day horizon, Nasdaq listed ADRs earn a larger premium than their NYSE/AMEX listed counterparts. Time-series regressions and two-stage cross-sectional regressions establish that the premium to foreign equity issuers is greater if the US listing attracts liquidity and if US returns have a lower correlation with the local country index. [source]

Increasing returns to scale from variable capacity utilization

INTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 3 2007
Susheng Wang
E32; D24 We propose a unique model in which the firm varies capacity utilization by a variable number of shifts when facing demand fluctuations. In the long run, the firm optimally chooses a capacity level based on expected demand conditions. In the short run, when facing excess demand, the firm can increase variable inputs and the number of shifts to intensify the use of existing capacity. By endogenizing cost, demand and variability of capacity utilization, we show that variable capacity utilization can lead to increasing returns to scale. Hence, we predict increasing returns to scale when an economy expands in a business cycle. [source]

WELL-BEHAVED PRODUCTION ECONOMIES

METROECONOMICA, Issue 4 2005
Michael Mandler
ABSTRACT We show that production economies are tâtonnement stable if consumers satisfy the weak axiom of revealed preference. To ensure that producer supply decisions are well defined, we restrict prices in the tâtonnement so that positive profits cannot occur but do allow supply decisions to be multi-valued. The model therefore permits linear activities and hence the technologies that admit capital theory paradoxes. The result thus shows that if the consumer side of the economy is well behaved then capital theory paradoxes are irrelevant for stability. Other features of the Walrasian general-equilibrium model that have aroused suspicion (e.g. that a price below its equilibrium value may have negative excess demand and thus temporarily move even lower in a tâtonnement) may be a sign of trouble but also have nothing to do with capital theory paradoxes. We show that these phenomena arise even when there is no choice of technique and there is an aggregate production function. [source]

Testing for Quasi-Market Forces in Secondary Education

OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 3 2000
Steve Bradley
This paper investigates the effect of introducing quasi-market forces into secondary education on the allocation of pupils between schools and on the exam performance of pupils. A unique database is used which covers all publicly-funded secondary schools in England over the period 1992,98. We find several effects consistent with the operation of a quasi-market. Firstly, new admissions are found to be positively related to a school's own exam performance and negatively related to the exam performance of competing schools. Secondly, a school's growth in pupil numbers is positively related to its exam performance compared to its immediate competitors. Thirdly, there is strong evidence that schools experiencing an excess demand for places have responded by increasing their physical capacity. Fourthly, there is some evidence of an increase in the concentration of pupils from poor family backgrounds in those schools with the poorest exam performance of schools during 1992,98 can be attributed to the introduction of quasi-market forces. [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]

THE INAUGURAL NOEL BUTLIN LECTURE: WORLD FACTOR MIGRATIONS AND DEMOGRAPHIC TRANSITIONS

AUSTRALIAN ECONOMIC HISTORY REVIEW, Issue 2 2004
Jeffrey G. Williamson
This lecture explores the connection between demographic transitions, mass migrations and international capital flows. It reviews how demographic transitions influence the size of age cohorts, and then how these changes in age distribution influence excess demands in receiving regions and excess supplies in sending regions. The lecture offers four examples , two from the first global century and two from the second global century , where shocks generated by demographic transitions have had an enormous impact on factor flows: European mass migrations to the New World before 1914; African mass migrations to the OECD over the past two decades; British capital export to the New World before 1914; and capital flows across East Asian borders after 1950 and before the melt down of the 1990s. The lecture concludes with an assessment of the demographic contribution to the East Asian miracle (and slowdown) over the past half century. [source]