The hypothesis in this paper is that the existence of retail markets may not necessarily be determined by spatial factors and increasing return in transportation (or increasing returns in retailing), but can be explained by the rational behaviour of firms operating in a stochastic environment. It is shown that demand uncertainty can serve as an independent source of retail trade. Consequently, the ability of firms to process information and predict demand (i.e., to decrease demand uncertainty) may affect the characteristics of retail markets. The results indicate that risk-averse firms always devote resources to demand forecasting; producers are better off trading with retailers than with final consumers; and the volume of output supplied through retail markets is greater than it would be if producers traded directly with consumers (thus benefiting social welfare). Furthermore, the paper shows that technological progress in data-processing, which allows for cheaper and better predictions of market demand, increases the number of firms operationg in retail markets. (authors' abstract) / Series: Discussion Papers of the Institute for Economic Geography and GIScience

Ecological Economics has not paid sufficient attention to the macroeconomic level both in terms of theory and modeling. Yet, key topics debated in the field of Ecological Economics such as sustainable consumption, reduction in working time, the degrowth debate, the energy-exergy link, and the rebound effect require a holistic and macro perspective. While this deficiency has been identified before and Keynesian economics has been generally suggested as a potent vehicle to establish economic system's thinking, very little concrete theorizing and practical suggestions have been put forward. We give further credence to this suggestion and demonstrate the value of tackling key concerns of Ecological Economics within a Keynesian growth framework. Contextualized by an application to climate change we suggest that policy relevant recommendations need to be based on a consistent view of the macroeconomy. We end with laying out key building blocks for a Keynesian model framework for an Ecological Macroeconomics. (authors' abstract)

The Thesis: Commodity prices are significantly more volatile than prices of industrial products. Production as well as non speculative demand of raw materials are subject to stochastic - sometimes even systematic - fluctuations, which get translated into pronounced price fluctuations by low short run price elasticities of demand and supply. Unstable prices as such provide an incentive to speculate; and - so the Friedman thesis - profitable speculation in itself has a stabilizing effect, since "speculation can be destabilizing in general only if speculators on average sell when the currency is low in price and buy when it is high". Temporal independence between speculative and non speculative activities is the only necessary condition Friedman considers. The counter argument: As can be shown however, even under the assumption of temporal independence speculation can have a destabilizing effect despite being profitable, if the non speculative excess demand is nonlinear. Moreover its precisely because of temporal interdependence on commodity markets, that speculative profits can even be achieved by destabilizing (stable) prices. The extreme volatility of commodity prices therefore may be partly caused by (profitable) speculation as well. (author's abstract) / Series: Department of Economics Working Paper Series

A model of two unionized, vertically connected oligopolistic industries is analyzed. Economic performance, measured by consumer prices, depends on the institutional setting of wage bargaining. Two externalities may occur, namely an integration and a competition externality, which have contrary effects. With decentralized bargaining no externalities can be internalized resulting in low consumer prices. With bargaining at the industry level only the competition externality is internalized resulting in high prices. With centralized bargaining both externalities can be internalized resulting again in low prices. With at least two firms in each industry, the decentralized setting performs best. Performance improves with an increase in the competition of the product markets. (author's abstract) / Series: Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"

Using a unique panel data set for German grocery prices we find significant price synchronization within food retail chains as well as within individual food stores (between products). Price synchronization between chains appears to be less pronounced. Common shocks can only explain some synchronization, indicating that strategic motives as well as menu costs are of significant importance. (author's abstract) / Series: Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"

In a simple oligopsonistic model, firms compete for labour through wages and job qualities. We modify the product market model developed by Vandenbosch/Weinberg 1995 and apply it to the job market with jobs being defined by two vertically differentiated non-wage characteristics. Workers differ in their valuation of these two characteristics but do not differ in their productivity. In equilibrium firms offer different wages and differ in only one of these non-wage characteristics. Whereas our labour market model is based on firms, we apply subclasses according to the UK SIC(2003) in our empirical analysis. When comparing subclasses within selected sectors (WERS) we found evidence that firms compete in both wages and job qualities. (author´s abstract) / Series: Department of Economics Working Paper Series

This article investigates the determinants of entry and exit in the Austrian manufacturing sector based on 1981 to 1994 data. We study the response of entry, exit and other indicators of firm dynamics to changes in average plant size, size heterogeneity, concentration, incentives and vertical integration. By applying Bayesian simulation methods we estimate random coefficient models and study the symmetry of the determinants of entry and exit. Our empirical analysis shows that entry and exit rates are driven by the same determinants. The impacts of these determinants are nearly homogeneous for both, entry rates and exits rates, respectively. Moreover, we find (i) that changes in average plant size, size heterogeneity and concentration are not symmetric with respect to entry and exit, (ii) that changes in the growth of sales is weakly symmetric and (iii) that the growth rate of employment is strongly asymmetric across industries in Austrian manufacturing. Furthermore, we infer from the data that the turnover of firms influences the changes in the number of competitors. Low entry rates go hand in hand with low net entry rates and a low turnover. (author's abstract) / Series: Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"

Based on regularly published data we quantitatively assess the efficiency of UK secondary, private schools in providing quantity vs. quality of graduates on a per output basis. In economic terms the primary question is whether indeed an increase in the quantity of graduates with the observed inputs would be associated with a deterioration of average quality of graduates. The estimation framework is a new, statistically enriched type of Data Envelopment Analysis as detailed in Gstach (2002) to account for output-specific efficiencies. The results indicate that quantity clearly dominates quality as performance distinguishing criteria amongst sample schools, i.e. on average quantity efficiency is low while quality efficiency is high. The results also provide evidence that the abilities of schools to provide quantity resp. quality are positively correlated. These findings indicate considerable scope for increasing the number of graduates without sacrificing average graduation quality through improved school management. (author's abstract) / Series: Department of Economics Working Paper Series

Adaptive agent models are supposed to result in the same limit behavior as models with perfectly rational agents. In this article we show that this claim cannot by accepted in general, even in a simple capital market model, where the agents apply sample autocorrelation learning to perform their forecasts. By applying this learning algorithm, the agents use sample means, the sample autocorrelation coefficient, and the sample variances of prices to predict the future prices, and to determine the demand for the risky asset. Therefore, even if the agents are not perfectly rational, we require that the agents' forecasts are consistent with the underlying information. In this article a sufficient condition for convergence is derived analytically, and checked by means of simulations. The price sequence as well as the sequence of parameters - estimated by means of sample autocorrelation learning - converge, if the initial value of the price sequence is sufficiently close to the steady-state equilibrium, and a random variable derived from the dividend process is not too volatile to skip the price trajectory out of the attracting region. Therefore, the market price can even diverge, and the region of convergence could become very small depending on the underlying parameters. Thus, divergence of the price sequences is not a pathological example, since it possibly occurs over a wide range of parameters. Therefore, the often claimed coincidence of adaptive agents models and ration agent models cannot be observed even in a simple capital market model. (author's abstract) / Series: Working Papers SFB "Adaptive Information Systems and Modelling in Economics and Management Science"

This paper investigates whether preference-based (empirical) power indices differ significantly from their preference-free (theoretical) counterparts. Drawing on the to date most comprehensive sample of EU Council votes (1993- 2011), we use item-response models to estimate the EU27 member states' preferences (ideal points) in a one-dimensional policy space. Their posterior distributions are then used for the calculation of empirical versions of the Banzhaf and the Shapley-Shubik index, invoking the concepts of connected coalitions and bloc voting. Our ideal point estimates indicate significant differences between member states' preferences, which often translate into significant differences between empirical and theoretical power under individual voting. However, the formation of voting blocs appears to offset differences in countries' ideal points as the bloc size grows. This result does not hold up for the Shapley-Shubik index, whose empirical variants differ from the theoretical one, both under individual and bloc voting. (authors' abstract)