This dissertation develops variants of the well-known Hotelling’s location model to examine the nature of competition in the audit market where audit firms make strategic specialization and pricing decisions. In a multi-period spatial oligopoly model of auditing competition, audit firms obtain market power through their service specialization with respect to client characteristics relevant to audit production. This market power allows audit firms to price discriminate among clients. Competition among audit firms is localized: an audit firm optimally charges a client, to whom it has the lowest auditing cost to serve, the marginal auditing cost of the second lowest-cost audit firm. These equilibrium audit firms’ pricing strategies result in an allocation of clients’ surplus and audit firms’ profits that lies in the core of the economy. The existence of a specialization-pricing equilibrium is also established. In equilibrium, given its rivals’ specializations, each audit firm’s profit is maximized by choosing a specialization that maximizes the social welfare (the sum of clients’ surplus and audit firms’ profits). Moreover, audit firms never choose the same specialization in equilibrium. Instead, in order to earn rents as ‘local monopolists’, audit firms differentiate themselves from each other. This result is consistent with a widely held notion that audit firms search for ‘niche’ markets, such as industry specialization, to increase their profits. The dissertation then focuses on a two-period spatial duopoly model in which the market power created by audit firm specialization is now further fortified by the presence of auditors’ learning and clients’ switching costs. In this case, audit firms optimally price discriminate among clients by offering them ‘specialization-and-relationship-specific’ audit fee schedules. The practice of ‘low-balling’ is found to be a natural consequence of the competition among audit firms. However, low-balling occurs only in a certain market segment where audit firms compete quite fiercely. The analysis also demonstrates how equilibrium audit fee schedules, audit firms’ specializations and profits, clients’ surplus, and social welfare depend on the auditing costs, the learning rate, and the switching costs. Some interesting policy implications are illustrated. Finally, the model is used to analyze the impact of banning audit firms from the practice of low-balling. It is demonstrated that even though a policy of banning low-balling always reduces competition, it improves social efficiency in some cases. / Business, Sauder School of / Accounting, Division of / Graduate

A thesis submitted to the Faculty of Science, University of the Witwatersrand, Johannesburg, in fulfilment of the requirements for the Degree of Doctor of Philosophy. Johannesburg, August 2016. / There is a growing demand for small area estimates for policy and decision making, local planning and fund distribution. Surveys are generally designed to give representative estimates at national or regional level, but estimates of variables of interest are often also needed at the small area levels. These cannot be reliably obtained from the survey data as the sample sizes at these levels are too small. This problem is addressed by using small area estimation techniques. The main aim of this thesis is to develop confidence intervals (CIs) which are accurate to terms O(m–3/2 ) under the FH model using the Taylor series expansion. Rao (2003a), among others, notes that there is a situation in mixed model estimation that the estimates of the variance component of the random effect, A, can take negative values. In this case, Prasad and Rao (1990) consider ˆA = 0. Under this situation, the contribution of the mean squared error (MSE) estimate, assuming all parameters are known, becomes zero. As a solution, Rao (2003a) among others proposed a weighted estimator with fixed weights (i.e., wi = 12 ). In addition, if the MSE estimate is negative, we cannot construct CIs based on the empirical best linear unbiased predictor (EBLUP) estimates. Datta, Kubokawa, Molina and Rao (2011) derived the MSE estimator for the weighted estimator with fixed weights which is always positive. We use their MSE estimator to derive CIs based on this estimator to overcome the above difficulties. The other criticism of the MSE estimator is that it is not area-specific since it does not involve the direct estimator in its expression. Following Rao (2001), we propose area specific MSE estimators and use them to construct CIs. The performance of the proposed CIs are investigated via simulation studies and compared with the Cox (1975) and Prasad and Rao (1990) methods. Our simulation results show that the proposed CIs have higher coverage probabilities. These methods are applied to standard poverty and percentage of food expenditure measures estimated from the 2010/11 Household Consumption Expenditure survey and the 2007 census data sets. Keywords: Small area estimation, Weighted estimator with fixed weights, EBLUP, FH model, MSE, CI, Poverty, percentage of food expenditure / LG2017

No description available.

This dissertation is an empirical study of demand and supply in differentiated products markets using supermarket scanner data on two particular product categories - canned tuna and hot-breakfast cereals. First, I study the impact of retailers' price promotions on consumer demand and retailer profits in the canned-tuna product category. Since canned tuna is storable, I examine whether consumers stock up during sales. The results suggest that only a limited amount of stockpiling exists in this product category. Since inventory is not very important, consumer demand is thus modeled by a static demand model with a random-coefficients-nested-logit specification, which is estimated by the Markov Chain Monte Carlo method. The unit-sales decomposition results show that on average 36% of the demand response to price promotions comes from brand-switching, so market expansion effects due to consumers switching from the outside good and to higher quantities usually dominate the brand-switching effect. Using the demand estimates, I compute optimal retail prices assuming that stores are local monopolists and choose prices to maximize static category-level profits. I find that regular prices at "high-low" stores are typically at or slightly below the optimal prices, but that regular prices at "every-day-low-price" stores are substantially below the optimal prices. These results suggest that retail price levels and price promotions are more likely related to local market conditions such as retail competition. In addition, I study the effects of store-brand (SB) entry on the demand elasticities of incumbent national brands (NB), consumers' substitution patterns for national and store brands, and the implications for consumer welfare in the hot-breakfast-cereals product category. A random-coefficients model of consumer demand is estimated by the generalized-method-of-moments approach. The empirical findings are: (1) After the entry of SB's, demand becomes more elastic for non-imitated NB's, and either more elastic or shows no change for imitated NB's; (2) in general, substitution patterns for NB's and SB's are asymmetric, i.e., when the prices of their favorite products increase, most NB buyers tend to substitute to other NB products, but SB buyers will substitute to the corresponding imitated NB's; (3) the increase in consumer surplus due to SB entry is trivial for an individual consumer, but the aggregate benefit could be quite substantial.

published_or_final_version / abstract / Economics and Finance / Doctoral / Doctor of Philosophy

In the second essay, we analyze the possibility of generating indeterminacy in the monetary models with nominal rigidities under increasing returns to scale technology. We find that in the monetary models with flexible wage (prices can be either flexible or staggered), the minimum degree of returns to scale necessary for local indeterminacy is inversely related to the magnitude of the labor-supply elasticity. This result is consistent with the one obtained in a real model in Benhabib and Farmer (1994), in particular, indeterminacy can only occur under very large labor-supply elasticity. Furthermore, we show that when incorporating nominal wage rigidities, indeterminacy can occur under an empirically plausible labor supply elasticity. However, the role of nominal rigidities for indeterminacy is very sensitive to the degree of capital adjustment costs, but it is robust to the assumptions of timing and the degrees of nominal rigidities. / The first essay discusses about indeterminacy under interest rate policy. We show that, with endogenous investment, virtually all monetary policy rules that set a nominal interest rate in response solely to expected future inflation induce real indeterminacy in models with (i) staggered prices, (ii) staggered prices and staggered wages, and (iii) staggered prices, staggered wages, and firm-specific capital. In (i), policy's response to current output can help significantly in ensuring determinacy with an infinite labor supply elasticity, but little with empirically plausible labor supply elasticity. In (ii), responding to output always helps a great deal, though under low price stickiness and without capital adjustment cost it may call for a moderate response to output in order to ensure determinacy for a wide range of response to inflation. In (iii), even a tiny response to output can always render equilibrium determinate for a wide range of response to inflation. We also find that the policy's response to lagged interest rate further enhances macroeconomic stability, though in many cases some response to output is still essential for ensuring a nonempty determinacy region, and even in the other cases responding to output often remains important in order to ensure determinacy for a wide range of response to inflation. Our results are quantitatively invariant to the presence of habit persistence in consumption. / The third essay studies the stability puzzle (Evans and McGough, 2002): why does indeterminacy almost always imply expectational unstability in RBC models? Following Meng and Yip (2008), we relax the restrictions on the magnitude of capital externalities with Cobb-Douglas technology. We find regions for joint indeterminacy and E-stability (i) when the felicity function is separable in consumption and leisure and there are negative capital externalities; or (ii) when the felicity function is non-separable and the social elasticity of production with respect to capital exceeds one. We further show that with the general utility function, a necessary condition for joint indeterminacy and E-stability is that the labor-demand curve is upward-sloping and steeper than the Frisch labor-supply curve. / This thesis consists of three essays on the issues of monetary policy, indeterminacy and expectational stability (E-stability). / Xue, Jianpo. / Adviser: Qinglai Meng. / Source: Dissertation Abstracts International, Volume: 70-06, Section: A, page: 2178. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2008. / Includes bibliographical references. / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. [Ann Arbor, MI] : ProQuest Information and Learning, [200-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. Ann Arbor, MI : ProQuest dissertations and theses, [201-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstracts in English and Chinese. / School code: 1307.

by Tso Ka Ho. / Bibliography: leaves 176-180 / Thesis (M.Phil.) -- Chinese University of Hong Kong, 1982

Xu Nan. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2006. / Includes bibliographical references (leaves 47-49). / Abstracts in English and Chinese. / Chapter 1. --- Introduction --- p.1 / Chapter 2. --- Various Preference and Technology Specifications and Indeterminacy --- p.5 / Chapter 2.1 --- CES Preference and Cobb-Douglas Technology --- p.7 / Chapter 2.2 --- Separable Utility and CES Technology --- p.16 / Chapter 2.3 --- Summary --- p.20 / Chapter 3. --- Capacity Utilization and Indeterminacy --- p.20 / Chapter 3.1 --- Separable Utility and Capacity Utilization --- p.21 / Chapter 3.2 --- Non-separable Utility and Capacity Utilization --- p.26 / Chapter 4. --- Production Depending on Average Consumption and Capital and Indeterminacy --- p.30 / Chapter 4.1 --- Production Depending on Aggregate Consumption and Capital --- p.32 / Chapter 4.2 --- Equivalence between the Two Settings --- p.36 / Chapter 5 . --- Concluding Remarks --- p.39 / Chapter 6. --- Appendix --- p.42 / Chapter 6.1 --- Properties of CES Utility Function --- p.42 / Chapter 6.2 --- Proof of Proposition 1 --- p.43 / Chapter 6.3 --- Derivation of Production Function in Section 3 --- p.45 / Chapter 6.4 --- Derivation of Depreciation Rate in subsection 3.2 --- p.46 / References --- p.47

by Lee Man-Ho, Peter. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2002. / Includes bibliographical references (leaves 119-125). / Abstracts in English and Chinese. / Chapter Chapter 1. --- The Literature Review --- p.1 / Chapter Chapter 2. --- "Revealed Preference, Differentiable Demand, and Expenditure Function" --- p.9 / Chapter I. --- Introduction --- p.9 / Chapter II. --- Results --- p.12 / Chapter III. --- Proof of Proposition 1 --- p.30 / Chapter IV. --- Proof of Proposition 2 --- p.53 / Appendix --- p.64 / Chapter Chapter 3. --- Revealed Smooth and Homothetic Preferences --- p.67 / Chapter I. --- Introduction --- p.67 / Chapter II. --- Result --- p.68 / Chapter Chapter 4. --- Excess Demand and Homothetic Economy --- p.77 / Chapter I. --- Introduction --- p.77 / Chapter II. --- Results --- p.79 / Chapter III. --- Proofs --- p.84 / Chapter Chapter 5. --- Conclusion --- p.95 / Appendix. Validating SARP by Computer Programs --- p.98 / References --- p.119

Liu Guoxin. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2002. / Includes bibliographical references (leaves 24-25). / Abstracts in English and Chinese. / Chapter 1 --- Introduction --- p.2 / Chapter 2 --- The Model --- p.4 / Chapter 3 --- "Estimation of μ1 ,μ2 ,α and β" --- p.7 / Chapter 4 --- Extension --- p.9 / Chapter 5 --- Monte Carlo Simulation --- p.11 / Chapter 5.1 --- "Case 1. a < 1, β < 1" --- p.12 / Chapter 5.2 --- "Case 2. a > 1, β < 1" --- p.12 / Chapter 5.3 --- "Case 3. a < 1,β > 1" --- p.13 / Chapter 5.4 --- "Case 4. a > 1, β> 1" --- p.13 / Chapter 6 --- Empirical Application --- p.15 / Chapter 6.1 --- Model Construction --- p.15 / Chapter 6.2 --- Estimation Results --- p.15 / Chapter 6.2.1 --- 1973Oil Crisis --- p.16 / Chapter 6.2.2 --- 1981 Oil Crisis --- p.18 / Chapter 6.2.3 --- 1991 Oil Crisis --- p.20 / Chapter 7 --- Conclusion --- p.23 / Chapter 8 --- Bibliography --- p.24