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Article
Publication date: 1 February 1978

Mai Anttila

Price is a significant determinant of consumers' purchase decisions. It is assumed in this study that the analysis of consumer price perception is of vital importance to…

1323

Abstract

Price is a significant determinant of consumers' purchase decisions. It is assumed in this study that the analysis of consumer price perception is of vital importance to understanding the effects of price information on purchase decisions. Earlier it has been studied experimentally in isolation, how a single price cue affects consumer perception of a product's quality. In this study there is the main difference that the influence of an array of prices for the product on the consumer's price perception is examined experimentally at the same time.

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Management Research News, vol. 1 no. 2
Type: Research Article
ISSN: 0140-9174

Open Access
Article
Publication date: 31 August 2015

Sun-Joong Yoon

Previous literature emphasizes the importance of a closing call auction system because it can not only improve the price discovery effect, but also mitigate the possibility of…

128

Abstract

Previous literature emphasizes the importance of a closing call auction system because it can not only improve the price discovery effect, but also mitigate the possibility of price manipulation. However, Korea Exchange, which has adopted a closing call auction system, has still suffered from the price manipulation, most cases of which are likely to be related to the derivatives contracts. Based on this environment, this paper investigates why KRX experiences the closing price manipulations so much, even though it adopted the closing call auction system. Generally, a price manipulation occurs when the legal/administrative penalty is less than the expected economic gain or when a specific market structure increases an incentive to manipulate the price. In this paper, we find that the adoption of a closing call auction price as a settlement price for KOSPI derivatives contracts strengthens the incentive for closing price manipulation, which is supported by Kyle (2007). Kyle (2007) shows that if a closing price is used as a settlement price and investors can execute the ‘market-on-expiration orders’ surely, the derivatives with cash settlement are susceptible to the price manipulation such as squeezing or cornering, equally as the derivatives with physical settlement. As such, KRX is the only financial market that satisfies the above conditions. This paper tries to verify this argument by introducing the Hong Kong Exchange case, the Korean ELS-related manipulation case and the Deutsche Bank case. Therefore, we strongly recommend changing the settlement price of KRX derivatives contracts into an average price, which is similar with the well-developed financial markets.

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Journal of Derivatives and Quantitative Studies, vol. 23 no. 3
Type: Research Article
ISSN: 2713-6647

Keywords

Book part
Publication date: 11 December 2004

Gregory Clark

The paper constructs an annual price series for English net agricultural output in the years 1209–1914 using 26 component series: wheat, barley, oats, rye, peas, beans, potatoes…

Abstract

The paper constructs an annual price series for English net agricultural output in the years 1209–1914 using 26 component series: wheat, barley, oats, rye, peas, beans, potatoes, hops, straw, mustard seed, saffron, hay, beef, mutton, pork, bacon, tallow, eggs, milk, cheese, butter, wool, firewood, timber, cider, and honey. I also construct sub-series for arable, pasture and wood products. The main innovation is in using a consistent method to form series from existing published sources. But fresh archival data is also incorporated. The implications of the movements of these series for agrarian history are explored.

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Research in Economic History
Type: Book
ISBN: 978-1-84950-282-5

Book part
Publication date: 17 December 2003

Jihui Chen and Patrick Scholten

We study how price dispersion varies with product characteristics at a popular online price comparison site – Shopper.com. Our primary finding suggests that price dispersion in…

Abstract

We study how price dispersion varies with product characteristics at a popular online price comparison site – Shopper.com. Our primary finding suggests that price dispersion in online markets varies with product characteristics and firm behavior. We also find evidence that the level of dispersion varies with the percent of firms listing price information in multiple categories. When the percent of firms listing prices in multiple categories is relatively high (low), price dispersion is low (high).

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Organizing the New Industrial Economy
Type: Book
ISBN: 978-0-76231-081-4

Book part
Publication date: 12 December 2007

Alex Frino, Jennifer Kruk and Andrew Lepone

This chapter examines the price impact of large trades in futures markets across 14 stock index futures contracts in 11 different international markets. On the balance, we find…

Abstract

This chapter examines the price impact of large trades in futures markets across 14 stock index futures contracts in 11 different international markets. On the balance, we find that part of the initial price effect of futures trades is temporary. These initial price effects are partially reversed, implying that they incur a liquidity premium; though there is some variation in this finding across markets. We also find strong evidence that large buyer- and seller-initiated trades have positive and negative permanent effects on prices, implying they convey information. We conclude, similar to research based on equities markets, that traders in futures markets are informed.

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Asia-Pacific Financial Markets: Integration, Innovation and Challenges
Type: Book
ISBN: 978-0-7623-1471-3

Book part
Publication date: 29 January 2021

Michael K. Fung and Arnold C. S. Cheng

If the only difference between cities lies in their initial housing prices, the initially lower-price cities should eventually catch up with the initially higher-price ones, i.e.…

Abstract

If the only difference between cities lies in their initial housing prices, the initially lower-price cities should eventually catch up with the initially higher-price ones, i.e., “absolute convergence.” Alternatively, if the major determinants of housing prices are city-specific, cities will converge to parallel growth paths of housing prices, i.e., “conditional convergence.” This study tests for the existence of absolute and conditional convergence in house prices among cities in China. The strong evidence for conditional convergence suggests that each city possesses its own steady-state housing price to which it is converging, which depends on the city's own socio-economic characteristics. In other words, differences in these socio-economic characteristics among cities can create permanent differences in housing price among them. The differences in steady-states house price across cities reflect differences in the level of socio-economic development among them. The findings inform the kinds of interventions and resources that are most likely to be effective in reducing income disparity.

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Modeling Economic Growth in Contemporary Hong Kong
Type: Book
ISBN: 978-1-83909-937-3

Keywords

Book part
Publication date: 19 June 2019

James G. Carrier

Abstract

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The Politics and Ethics of the Just Price
Type: Book
ISBN: 978-1-78743-573-5

Book part
Publication date: 9 September 2020

Yiying Cheng

Recently, there has been much progress in developing Markov switching stochastic volatility (MSSV) models for financial time series. Several studies consider various MSSV…

Abstract

Recently, there has been much progress in developing Markov switching stochastic volatility (MSSV) models for financial time series. Several studies consider various MSSV specifications and document superior forecasting power for volatility compared to the popular generalized autoregressive heteroscedasticity (GARCH) models. However, their application to option pricing remains limited, partially due to the lack of convenient closed-form option pricing formulas which integrate MSSV volatility estimates. We develop such a closed-form option pricing formula and the corresponding hedging strategy for a broad class of MSSV models. We then present an example of application to two of the most popular MSSV models: Markov switching multifractal (MSM) and component-driven regime switching (CDRS) models. Our results establish that these models perform well in one-day-ahead forecasts of option prices.

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Advances in Pacific Basin Business, Economics and Finance
Type: Book
ISBN: 978-1-83867-363-5

Keywords

Expert briefing
Publication date: 31 October 2023

In reality, the oil price has less influence on inflationary trends and expectations today than in earlier decades, partly because central banks have greater credibility and…

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DOI: 10.1108/OXAN-DB283033

ISSN: 2633-304X

Keywords

Geographic
Topical
Book part
Publication date: 25 March 2010

Jie Chen and John A. Rizzo

Purpose – To examine how drug prices for specific diseases vary across payers in the United States and how insurer and patient out-of-pocket (OOP) costs vary by payer…

Abstract

Purpose – To examine how drug prices for specific diseases vary across payers in the United States and how insurer and patient out-of-pocket (OOP) costs vary by payer type.

Methodology – This study uses data from the Medical Expenditure Panel Survey (MEPS) from 1996 to 2006. We estimate multivariate price regressions for four major drug product classes (antihypertensive, antidepressant, antiasthma drugs, and non-steroidal anti-inflammatory drugs (NSAIDs)). Separate models are estimated for brand and generic drugs within each of these drug product classes. In addition to estimating overall transaction price equations for brands and generics, the study estimates patient OOP payments and insurer payments for drugs.

Findings – We find relatively modest differences among payers in terms of total prices (e.g., insurer plus OOP). The main difference is in terms of how prices were shared between insurers and patients. Medicaid paid significantly more than other payers for each drug class, while Medicaid beneficiaries paid significantly less.

Research implications – Our results shed light on how drug prices vary by different payers and how drug prices are shared by third party payers and patients. The relatively modest differences in total drug prices across payer type suggest that these payers do not differ greatly in terms of their ability to negotiate price concessions from their suppliers. Instead, larger differences emerge in terms of how total costs are shared among the payer and their patients. Understanding the reasons for these variations, and their implications for health outcomes, are important directions for further research.

Details

Pharmaceutical Markets and Insurance Worldwide
Type: Book
ISBN: 978-1-84950-716-5

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