Price competition in finite markets with a rare good and private consumer valuations
We develop a spatial monopolistic competition model in which city structure formation is entirely driven by market interactions. When preferences and transport costs are described by real analytic functions, equilibrium land-use patterns are segregated. We completely solve the case of quasilinear quadratic preferences and quadratic transport costs. The city is monocentric when firms are few, duocentric when they are neither too few nor too many, and involves a residential central area bordered by two commercial clusters when firms are many. In the long-run equilibrium, the city size and its spatial structure may change swiftly in response to tiny variations in the opportunity cost of land. Our model captures spatial price dispersion without involving any search frictions.
Some Internet stores manage to charge prices that are significantly higher than market averages, therefore, obtaining some sort of price premium. This paper is dedicated to building a model that can be used to explain and predict a typical price premium that an Internet store charges for a specific product based on the information about the characteristics of the store and the features of the market for this product. Such models can provide support for pricing and assortment decisions: in particular, they allow detecting products that a store is likely to sell with the highest or the lowest markup based on price premia that are charged by stores with similar characteristics on similar markets.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.