ABSTRACT
Information is important market resource. High-quality information is beneficial to increase enterprise's reputation and reduce consumer's verification cost. This paper constructs a two-layer dynamic model, in which enterprises simultaneously conduct price and information game. The goal of profit maximization integrates two types of games into one system. The complex evolution of the two-layer system are studied by equilibrium analysis, stability analysis, bifurcation diagram, entropy and Lyapunov exponent. It is found that improving the information quality through regulations will increase involution and reduce stability of the market. Then, the block chain technology is introduced into the model for improving information quality of the market. It is found that increasing enterprises' willingness to adopt block chain can improve the information quality quickly and effectively, and that is verified by entropy value. Therefore, the application and promotion of new technologies are more effective than exogenous regulations for improving information quality in market.
ABSTRACT
The COVID-19 pandemic stimulated the need to invest in clean energy firms for better returns and climate risk mitigation. This study provides a detailed overview of the impact of idiosyncratic risk (IVOL) on excess returns of 95 clean energy stocks. Overall, investors in clean energy stocks are guided by the pessimist group of investors who underprice the high IVOL stocks and demand high-risk premiums to diversify the firm-specific risk. Further, during the COVID-19 period, there is no significant relationship between clean energy excess stock returns and IVOL. During this period, clean energy stocks were exposed to higher information asymmetry, limiting the arbitrage opportunities and producing a weaker return-IVOL relation indicating that clean energy stocks reflect the properties of technology stocks. IVOL has a low level of persistence which may be helpful in forecasting. This study offers valuable insights for regulators and investors from the investment decisions, asset pricing, and diversification perspective.
ABSTRACT
The most enduring measure of how individuals make personal decisions affecting their health and safety is the compensating wage differential for job safety risk revealed in the labor market via hedonic equilibrium outcomes. The decisions in turn reveal the value of a statistical life (VSL), the value of a statistical injury (VSI), and the value of a statistical life year (VSLY), which have both mortality and morbidity aspects that we describe and apply here. All such tradeoff rates play important roles in policy decisions concerning improving individual welfare. Specifically, we explicate the recent empirical research on VSL and its related concepts and link the empirical results to the ongoing examinations of many government policies intended to improve individuals' health and longevity. We pay special attention to recent issues such as the COVID pandemic and newly emerging foci on distributional consequences concerning which demographic groups may benefit most from certain regulations. © 2023 by Emerald Publishing Limited.
ABSTRACT
Apartment market can be recognized as one of the marketplaces severely affected due to the unprecedented global pandemic of COVID-19, which is currently driving towards a disequilibrium state. Hence, this paper aimed to investigate the impact of COVID-19 pandemic on the demand and supply of apartment projects in Sri Lanka. The qualitative research approach was followed in order to accomplish the research aim. A comprehensive literature review followed by fifteen semi-structured interviews were conducted with apartment industry experts during the empirical investigation. Collected data was analyzed using manual content analysis. The findings revealed, how each market determinant affected the demand and supply of apartments respectively during the COVID-19 pandemic resulting numerous challenges on the market participants, directing the apartment market towards a disequilibrium state. Urban living fears, demographic shifts, unemployment shocks, consumers’ financial concerns, tourism crisis along with several other factors caused demand to be dropped while approval delays, lesser investments, lack of funding, developers’ failures, market imperfection and construction delays majorly affect the supply of apartments. Although demand for apartments in some market segments showed recovery with the new normal adaptation followed by several positive market aspects, demand dropped within the rental market and upper tier remains constantly. However, supply side is worsening overtime since financial losses are lessening developers’ supplying capabilities, while the crisis within the construction sector getting more affected due to the country’s economic downturn. © 2022, Ceylon Institute of Builders. All rights reserved.
ABSTRACT
The purpose of this paper is an analysis of the presence of self-selection mechanisms on the market that could bring the market closer to the separating equilibrium state, in line with the Rothschild–Stiglitz equilibrium model and its subsequent modifications. An example is the Polish market of compulsory third-party liability insurance of vehicle owners. This paper describes this market in terms of both its structure and its financial results. The main focus is on describing the assumptions of the Rothschild–Stiglitz model for markets operating under the conditions of information asymmetry and based on the self-selection mechanism, allowing for an unequivocal determination of the insured’s profile without the need to actually observe the insured’s behaviour. Finally, we show that thanks to the self-selection induced by the possibility of driving behaviour monitoring, the industry can minimise the negative effect information asymmetry has on the motor insurance market. This can be achieved, for example, by observing the choices made by the insured after being offered a new voluntary contract with a premium based on telematics data. Our analysis was carried out with the use of three selected characteristics that can determine the insured’s risk profile, i.e., distance covered, self-assessment, and insurance premium paid;the significance of the latter—although it may be intuitive—is questionable at commonly accepted significance levels. Therefore, the main result is that although there is some evidence on the disputed matter, there can be no definitive conclusion—especially in terms of risk as measured by insurance premium.
ABSTRACT
This paper analytically examines the demand for surgical masks following the recent health precautions due to coronavirus. Using a simple linear demand curve and alternatively examining the impacts of requirements that mandate (a) the wearing of masks by frontline workers; (b) suggested but not required masking by the whole public; and (c) compulsory masking by the whole public. The impacts of the different scenarios on the price elasticity of demand are determined along with the slope (or the rate of change) of elasticity. Some of these results differ when a non-linear demand curve is considered instead. The equilibrium mask prices increase when masks are universally mandated, whereas the consumer surplus is higher when masks are recommended but not mandated. However, the ranking of consumer surplus is shown to be sensitive to the supply elasticity of masks. These considerations enable a structured means to view the demand implications of masking requirements and provide some food for policy thought.