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Anderson, Ronald W.; Carverhill, Andrew - C.E.P.R. Discussion Papers - 2005

We study a continuous time model of a levered firm with fixed assets generating a cash flow that fluctuates with business conditions. Since external finance is costly, the firm holds a liquid (cash) reserve to help survive periods of poor business conditions. Holding liquid assets inside the...

Persistent link: https://www.econbiz.de/10005123584

Unlocking Value: Equity Carve outs as Strategic Real Options

Perotti, Enrico C; Rossetto, Silvia - C.E.P.R. Discussion Papers - 2007

Equity carve outs, the partial listing of a corporate subsidiary, appear to be transitory arrangements, usually dissolved within a few years by either a complete sale or a buy back. Why do firms perform expensive listings just to reverse them thereafter? We interpret carve outs as strategic...

Persistent link: https://www.econbiz.de/10005124241

Hedging and Vertical Integration in Electricity Markets

Aïd, René; Chemla, Gilles; Porchet, Arnaud; Touzi, Nizar - C.E.P.R. Discussion Papers - 2011

This paper analyzes the interactions between competitive (wholesale) spot, retail, and forward markets and vertical integration in electricity markets. We develop an equilibrium model with producers, retailers, and traders to study and quantify the impact of forward markets and vertical...

Persistent link: https://www.econbiz.de/10008925710

Solving Heterogeneous-Agent Models with Parameterized Cross-Sectional Distributions

Algan, Yann; Allais, Olivier; Den Haan, Wouter - C.E.P.R. Discussion Papers - 2007

disadvantages of the prevailing algorithm that strongly relies on simulation techniques and is easier to implement than existing … possible to avoid Monte Carlo integration. The paper also develops a new simulation procedure that not only avoids cross … finite number of agents. This procedure can help to improve the efficiency of the most popular algorithm in which simulation …

Persistent link: https://www.econbiz.de/10005114163

Strategic Experimentation and Disruptive Technological Change

Schivardi, Fabiano; Schneider, Martin - C.E.P.R. Discussion Papers - 2005

This paper studies the diffusion of a new technology that is brought to market while its potential is still uncertain. We consider a dynamic game in which firms improve both a new and a rival old technology while learning about the relative potential of both technologies. We use the model to...

Persistent link: https://www.econbiz.de/10005504449

Government Debt Management: The Long and the Short of It

Faraglia, Elisa; Marcet, Albert; Oikonomou, Rigas; … - C.E.P.R. Discussion Papers - 2014

Our aim is to provide insights into some basic facts of US government debt management by introducing simple financial frictions in a Ramsey model of fiscal policy. We find that the share of short bonds in total U.S. debt is large, persistent, and highly correlated with total debt. A well known...

Persistent link: https://www.econbiz.de/10011096106

Industry location and wages: The role of market size and accessibility in trading networks

Barbero, Javier; Behrens, Kristian; Zofio, Jose L. - C.E.P.R. Discussion Papers - 2015

We investigate the geographical distribution of economic activity and wages in a general equilibrium model with many asymmetric regions and costly trade. As shown by extensive simulations on random networks, local market size better explains a region’s industry share, whereas accessibility...

Persistent link: https://www.econbiz.de/10011165639

A Welfare Assessment of Revenue Management Systems

Dupuis, Nicolas; Ivaldi, Marc; Pouyet, Jérôme - C.E.P.R. Discussion Papers - 2015

We study the welfare impact of revenue management, i.e. intertemporal price discrimination when the product availability is limited both in time and quantity, and consumers' arrival is random. This practice is particularly relevant, and widely spread, in the transport industry, but little is...

Persistent link: https://www.econbiz.de/10011165643

Nestedness in Networks: A Theoretical Model and Some Applications

König, Michael; Tessone, Claudio J.; Zenou, Yves - C.E.P.R. Discussion Papers - 2012

We develop a dynamic network formation model that can explain the observed nestedness in real-world networks. Links are formed on the basis of agents’ centrality and have an exponentially distributed life time. We use stochastic stability to identify the networks to which the network formation...

Persistent link: https://www.econbiz.de/10011083433

Information Aggregation in a DSGE Model

Hassan, Tarek; Mertens, Thomas M. - C.E.P.R. Discussion Papers - 2014

We introduce the information microstructure of a canonical noisy rational expectations model (Hellwig, 1980) into the framework of a conventional real business cycle model. Each household receives a private signal about future productivity. In equilibrium, the stock price serves to aggregate and...

Persistent link: https://www.econbiz.de/10011083546