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Papers by Staffan Ringbom

We analyze the incentives of service providers to utilize advance reservation systems allowing fo... more We analyze the incentives of service providers to utilize advance reservation systems allowing for refunds in an imperfectly competitive service industry with price competition. We investigate how the refund option affects equilibrium prices, and characterize the conditions under which the refund option is utilized. In contrast to the monopoly models where a single provider can capture a higher share of consumer surplus by utilizing the refundability option, competition reduces this surplus. Thus under price competition the nonrefundable booking strategy maximizes industry profit.

Defence and Peace Economics, 2016

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch ge... more Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.

Open Economies Review - OPEN ECON REV, 2003

A smooth exchange rate target zone solution that internalizes the time inconsistency problem and ... more A smooth exchange rate target zone solution that internalizes the time inconsistency problem and is completely free from speculation incentives exists where the monetary resources available for an exchange rate defense are limited and the target zone collapses with probability one. In the unique closed form solution, a soft internal narrow target zone slides during a sterilized defense when the reserves change. For a smooth regime collapse the exchange rate is non-smoothpasted to the free-float. A target zone defended at its official borders is inherently speculative and results in a randomized regime collapse for the monetary intervention.

We analyze the incentives of imperfectly-competitive service providers to uti- lize advance reser... more We analyze the incentives of imperfectly-competitive service providers to uti- lize advance reservation systems for consumers who are heterogeneous with re- spect to their probability of showing up. We investigate how the refund option affects equilibrium prices, and characterize the conditions under which the re- fund option is utilized. Under weak competition, service providers utilize the same booking strategies. In contrast, intense competition might lead firms to segment the market by utilizing different booking strategies. Finally, if partial refunds are utilized, the equilibrium refunds equal exactly to the operation cost whereas the nonrefundable portion equals to capacity cost plus the profit markup.

ABSTRACT We characterize the conditions under which industry-wide agreements on refund policies w... more ABSTRACT We characterize the conditions under which industry-wide agreements on refund policies weaken price competition. We identify the conditions under which joint industry proffit increases with the amount of refunds promised to those consumers who cancel a reservation or return a product. We compare it to similar industry configurations when firms set up shipping and handling charges instead of refunds. Finally, we investigate refund policies under moral hazard.

We develop methods for calculating profit-maximizing and socially optimal rates of partial refund... more We develop methods for calculating profit-maximizing and socially optimal rates of partial refunds on customers' no-shows and cancellations. We demonstrate how partial refunds can be used to screen consumers according to their different probabilities of cancellation and no-shows. Finally, we show that the socially-optimal rate of partial refund exceeds the equilibrium rate of partial refund.

SSRN Electronic Journal, 2000

Persistent shifts in equilibria are likely to arise in oligopolistic markets and may be detriment... more Persistent shifts in equilibria are likely to arise in oligopolistic markets and may be detrimental to the measurement of conduct, related markups and intensity of competition. We develop a cointegrated VAR (vector autoregression) based approach to detect long-run changes in conduct when data is difference stationary. Importantly, we separate the components in markups which are exclusively related to long-run changes in conduct from those explained solely by fundamentals. Our approach does not require estimation of markups and conduct directly, thereby avoiding complex problems in existing methodologies related to multiple and changing equilibria. Results from applying the model to the U.S. and five major European banking sectors indicate substantially different behavior of conventional raw markups and conduct-induced markups.

Intertemporal shifts in conduct, such as a transition from competitive to anticompetitive behavio... more Intertemporal shifts in conduct, such as a transition from competitive to anticompetitive behavior, induce shifts in the firms' equilibrium price configurations. Such shifts generate non-stationary price dynamics in addition to those which originate from exogenous fundamentals. We exploit this statistical feature to detect potential changes in conduct, as well as measure their effect on prices. Our approach requires only data on prices and fundamentals without necessitating strong assumptions regarding industry structure. Application to United States and European banking sectors indicates substantial differences between conventional credit spreads and components associated with changes in conduct.

Scandinavian Journal of Management, 1993

In this paper the pricing of currency options in a target zone model is discussed. The movement o... more In this paper the pricing of currency options in a target zone model is discussed. The movement of the currency index is a product of the movement within the target zone and jumps in the target zone itself in the form of re-or devaluations. The probability of a re-or devaluation is modelled as dependent on the position of the exchange rate within the target zone. The traditional assumption of no dependence between the position of the exchange rate within the target zone and the probability of are-or devaluation is compared with a model allowing state-dependent jumps. It is shown that the assumption of state-independent jump probabilities may lead to highly unrealistic outcomes, outcomes that will not arise if the probability of re-or devaluations is allowed to depend on the location of the exchange rate within the target zone. A comparison is made with the prices produced by the widely used Ciarman and

Journal of Economics and Business, 2008

ABSTRACT This paper investigates industry-wide agreements on joint refund policies, and how they ... more ABSTRACT This paper investigates industry-wide agreements on joint refund policies, and how they influence price competition. We compute the profit of fully-colluding, competing, and semicolluding service providers who offer refunds to those consumers who do not show up at the time of service. Our main findings are that both a monopoly serving all consumer types, and semicollusive service providers offer full refunds. In contrast, competing service providers offer only partial refunds. Finally, refund policies are investigated under moral hazard behavior.

Journal of Economics, 2002

Journal of Banking & Finance, 2004

We characterize the profit-maximizing reserves of a commercial bank, and the generated probabilit... more We characterize the profit-maximizing reserves of a commercial bank, and the generated probability of a liquidity crisis, as a function of the penalty imposed by the Central Bank, the probability of depositors' liquidity needs, and the return on outside investment opportunities. We demonstrate that banks do not fully internalize the social cost associated with the bail-out policy if the liquidity needs of individuals are correlated, and that competitive interbank markets will induce banks to raise their reserves under reasonable conditions. The marginal benefits from an interbank market decrease as the correlation between the liquidity shocks of banks increases.

International Review of Economics & Finance, 1994

ABSTRACT This note shows the conclusion that the risk-premium for stocks will vanish once options... more ABSTRACT This note shows the conclusion that the risk-premium for stocks will vanish once options are introduced which was advanced by Jin-Chuan Duan, Arthur F. Moreau, and C.W. Sealey, 1992 in a recent article is somewhat premature. Their argument is purely theoretical and concerns the simultaneous validity of a one-period APT and a continuous-time Option Pricing Model. This note points out an important problem which will arise when a discrete time model is merged with a continuous time model as done by Duan, Moreau, and Sealey. Finally it is shown that the argument advanced by the authors will hold only under severely restrictive conditions.

Economics Letters, 2007

ABSTRACT Price discrimination practiced by using linear and nonlinear pricing simultaneously rais... more ABSTRACT Price discrimination practiced by using linear and nonlinear pricing simultaneously raises the average price for heterogenous consumers paying linear price but lowers for homogeneous group who pay nonlinear price. Discrimination lowers consumer surplus for both groups but increases total surplus.