...carried on Cartelization: This explains the activities of a monopolistic type of organization of German origin established originally for the purpose of retricting output of member firms in order to keep up the price of their products. Price leadership: Here, there are only a few producers of a commodity when all forms must change the same price, one firm generally but not always the largest takes the price change lead. The internet would promote competition due to a range of alternatives available to prospective clients from all over the world in reasonable time and less cost of reach. 3b. An example is on arbitrage which is the buying and selling of stocks and shares, currency, bills of exchange where different factors from all over the world determine the changes on the price of the above. Another example is that of oil products i.e. the political crises which occurred in Libya affected the output of oil resources to the world which later affected prices around the world. Another is collusion which area of 2 types “Explicit and implicit collusion” A secret agreement among 2 or more competition forms in an industry to dominate the market, control price through informal, independent, actions. 3c) to me, there is little or no way we can eliminate those problems because i. It usually based on no...
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...forecasting models may be classified into (a) causal models in which independent variables are used to forecast dependent variables, and (b) time series models, which produce forecasts by extrapolating the historical values of the variables of interest by, e.g., moving averages. Seasonal Model Seasonality is a pattern that repeats for each period. For example annual seasonal pattern has a cycle that is 12 periods long, if the periods are months, or 4 periods long if the periods are quarters. The seasonal index is required to be found for each month, or other periods, such as quarter, week depending on the data availability (Hossein, 1994-2006). Seasonal Index: Seasonal index represents the extent of seasonal influence for a particular segment of the year. The calculation involves a comparison of the expected values of that period to the grand mean. A seasonal index is how much the average for that particular period tends to be above (or below) the grand average. Therefore, to get an accurate estimate for the seasonal index, compute the average of the first period of the cycle, and the second period and divide each by the overall average (Hossein, 1994-2006). The formula for computing seasonal factors is: Si = Di/D, Where: Si = the seasonal index for ith period, Di = the average values of ith period, D = grand average, i = the ith seasonal period of the cycle. A seasonal index of one for a particular month indicates...
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...Topic Description Assignment 3 "Market Model Patterns of Change" Choose and research a specific business that is publicly traded where there has been a pattern of change in a particular market model (monopoly, oligopoly, etc.). Write a four to five (4-5) page paper in which you: 1. Describe the business and explain the general pattern of change of the particular market model indicating how this change is likely to impact business operations. 2. Hypothesize the basic short-run and long-run behaviors of the model in the business you have chosen in a “market economy.” Provide support for your assumptions and conclusions. 3. Explain the major factors that affect the degree of competitiveness in your business. Use the data to develop at least three (3) measures (e.g., productivity measures) to show how the industry is evolving. Provide evidence supporting your rationale. 4. Research two of the business’ closest competitors to determine the pricing strategy for each business indicating how knowledge of this information may influence pricing decisions in your business. Provide support for your rationale. 5. Recommend a pricing policy for the business you chose. Assess how your pricing policy maximizes profits for the business. Provide support for your rationale. 6. Use at least three (3) high-quality academic resources in this assignment. •Include a cover page containing the title of the assignment, the student’s name, the professor’s...
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...with discovery of recurring patterns in financial market time series for the purpose of predicting and profiting from trends and trend reversals the prices of freely traded assets such as stocks, market indexes, exchange traded funds (ETF), commodities, currencies and financial futures and options . Objective TA is restricted to patterns that can be represented numerically and trading systems that produce clear cut buy and sell signals that can be evaluated on historical data. Thus objective TA is concerned with the development of trading systems. Other forms of technical analysis rely upon the visual inspection and subjective interpretation of graphs to detect patterns and predict trends. Objective TA employs indicators, which are new time series derived by applying one or more mathematical transformations to raw market data such as price, volume, open-interest and other data series produced by trading activity. For example, technical analysts apply moving averages to identify price trends. Data mining (DM) is also concerned with patterns and prediction and thus the natural fit between DM and objective TA. Data miners use specialized algorithms to analyze large data multivariate data bases containing thousands or even million of cases with the intent of discovering unobvious patterns that can be used to predict various kinds of outcomes. The end product of a DM effort is a predictive model based the discovered patterns. Ultimately the model is used to make predictions...
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...INTERNATIONALIZATION PROCESS OF THE FIRM-A MODEL OF KNOWLEDGE DEVELOPMENT AND INCREASING FOREIGN MARKET COMMITMENTS JAN JOHANSON' Center of International Business Studies University of Uppsala JAN-ERIK VAHLNE' Institute of International Business Stockholm School of Economics Abstract. O n the basis of empirical research, a model of the internationalization process of the firm is developed. The model fccuses on the gradual acquisition, integration and use of knowledge about foreign markets and operations, and on the incrementally increasing commitments to foreign markets. In particular, attention is concentrated on the increasing involvement in the individual foreign country. ' , .?.. . ' 1 .ti-. ;,..,, ,--.7p.p. . & , Several studies of international business have indicated that internationalization of the firms is a process in which the firms gradually increase their international involvement. It seems reasonable to assume that, within the frame of economic and business factors, the characteristics of this process influence the pattern and pace of internationalization of firms. In this paper we develop a model of the internationalization process of the firm that focuses on the development of the individual firm, and particularly on its gradual acquisltion, integration, and use of knowledge about foreign markets and operations, and on its successively increasing commitment to foreign markets. The basic assumptions of the model are that lack of such knowledge...
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...February Opportunity Recognition as Pattern Recognition: How Entrepreneurs “Connect the Dots” to Identify New Business Opportunities by Robert A. Baron* Executive Overview How do entrepreneurs identify opportunities for new business ventures? One possibility, suggested by research on human cognition, is that they do so by using cognitive frameworks they have acquired through experience to perceive connections between seemingly unrelated events or trends in the external world. In other words, they use cognitive frameworks they possess to “connect the dots” between changes in technology, demographics, markets, government policies, and other factors. The patterns they then perceive in these events or trends suggest ideas for new products or services—ideas that can potentially serve as the basis for new ventures. This pattern recognition perspective on opportunity identification is useful in several respects. First, it helps integrate into one basic framework three factors that have been found to play an important role in opportunity recognition: engaging in an active search for opportunities; alertness to them; and prior knowledge of an industry or market. In addition, it also helps explain interrelations between these factors (e.g., the fact that active search may not be required when alertness is very high). Second, a pattern recognition perspective helps explain why some persons, but not others, identify specific opportunities. Third, a pattern recognition framework suggests...
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...archive of this journal is available at www.emeraldinsight.com/1361-2026.htm JFMM 8,4 ACADEMIC PAPER 362 Fashion change and fashion consumption: the chaotic perspective Ka Ming Law, Zhi-Ming Zhang and Chung-Sun Leung Institute of Textiles and Clothing, The Hong Kong Polytechnic University, Hunghom, Hong Kong Keywords Fashion, Consumers, Young adults, Social change Abstract Previous researches have considered that the impact of fashion change and fashion consumption is linear. Therefore, one reason was found as the ultimate source to explain why a fashion style/ trend was spread to the mass market. However, the existing market is complex and difficult to find out the holistic reason to explain fashion consumption. In this study, the chaotic perspective is taken into account to investigate the relationship between fashion change and fashion consumption. By using the grounded theory method, 33 in-depth interviews were conducted. A chaotic fashion consumption model is developed from the findings to explain how different fashions are consumed and rejected while fashion changes. It is found that the interaction of being fashionable, perceived fashionability and system participation affects the ultimate decision on fashion consumption. It is also found that a pattern can be traced to forecast the degree of fashion consumption even when the fashion change phenomenon is chaotic. Thus, it is similar to the principle of chaos theory that short-term prediction is possible in relation...
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...OF THE THE INTERNATIONALIZATION DEVELOPMENT FIRM-A MODELOF KNOWLEDGE FOREIGN AND INCREASING MARKET COMMITMENTS JAN JOHANSON* Center of International Business Studies University of Uppsala JAN-ERIK VAHLNE* Institute of International Business Stockholm School of Economics Abstract. On the basis of empirical research, a model of the internationalization the firm is developed. The model focuses on the gradual acquisition, integration knowledge about foreign markets and operations, and on the incrementally commitments to foreign markets. In particular, attention is concentrated on the involvement in the individual foreign country. process of and use of increasing increasing * Several studies of international business have indicated that internationalization of the firms is a process in which the firms gradually increase their international involvement. It seems reasonable to assume that, within the frame of economic and business factors, the characteristics of this process influence the pattern and pace of internationalization of firms. In this paper we develop a model of the internationalization process of the firm that focuses on the development of the individual firm, and particularly on its gradual acquisition, integration, and use of knowledge about foreign markets and operations, and on its successively increasing commitment to foreign markets. The basic assumptions of the model are that lack of such knowledge is an important obstacle to the development of international...
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...THE EVOLUTION OF STOCK MARKET EFFICIENCY OVER TIME: A SURVEY OF THE EMPIRICAL LITERATURE Kian-Ping Lim Universiti Malaysia Sabah and Monash University and Robert Brooks Monash University Background This paper provides an insight into the empirical literature as pertains the evolution of stock market efficiency over time, with a keen focus on the weak form Efficient Market Hypothesis (EMH). The authors provide a systematic review of the correlation between several financial factors namely: Adaptive Markets Hypothesis (AMH), Efficient Markets Hypothesis (EMH), Evolving Return Predictability, Stock markets and Weak-form EMH. The authors pay keen attention on how return predictability from past price changes is affected by key players and determinants on the stock markets. From the survey they conduct, the posit that the bulk of the empirical studies examine whether the stock market under study is or is not weak-form efficient in the absolute sense, assuming that the level of market efficiency remains unchanged throughout the estimation period. The authors acknowledge that one field that has drawn extensive investigation by scholars and other players alike is the predictability of stock returns on the basis of past price changes. This is partly due to its direct implication on weak-form market efficiency. They find that a vast majority of the literature implicitly assumes the level of market efficiency remains unchanged throughout the estimation period. However, the possibility...
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...An Empirical Study of Pricing Strategies in an Online Market with High-Frequency Price Information Sara Fisher Ellison M.I.T. Christopher M. Snyder Dartmouth College June 2010 Abstract: We study competition among a score of firms participating in an online market for a commodity-type memory module. Firms were able to adjust prices continuously and prices determined how the firms were ranked and listed (lowest price listed first), with better ranks contributing to firms' sales. Using a year's worth of hourly data, we document the pricing dynamics, cycles, and other patterns in this market. We then characterize empirically the factors which drive price changes, noting clear evidence of firm heterogeneity in the choice of pricing strategy. Finally, we develop a framework for simulating counterfactual market settings, using the simulations to examine counterfactuals involving different mixes of firms according to pricing strategies. JEL Codes: L11, C73, D21, L81 Contact Information: Ellison: Department of Economics, M.I.T., 50 Memorial Drive, Cambridge, MA 02142; tel. (617) 253-3821; fax. (617) 253-1330; email sellison@mit.edu. Snyder: Department of Economics, Dartmouth College, 301 Rockefeller Hall, Hanover, NH 03755; tel. (603) 646-0642, fax. (603) 646-2122, email chris.snyder@dartmouth.edu. Acknowledgments: The authors are grateful to Hongkai Zhang for superb research assistance and to Glenn Ellison for a number of useful conversations. 1. Introduction ...
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...Analysis We could use comparative statics analysis method to analyze the market with model of market demand, supply, and equilibrium price and quantity. The term statics alludes to the theoretically stable point of equilibrium, and, comparative refers to the comparison of the various points of equilibrium. This method of analysis proceeds as follows: 1. State the assumptions needed to construct the model. 2. Begin by assuming the model is in equilibrium. 3. Introduce a change in the model. In so doing, a condition of disequilibrium is created. 4. Find the new point at which equilibrium is restored. 5. Compare the new equilibrium point with the original one. * Short-Run Market Changes: The “Rationing Function” of Price The short-run itself is a period time in which sellers already in the market respond to a change in equilibrium price by adjusting the amount of certain, resources which economists call variable inputs. Examples of such inputs are labor hours and raw materials. A short-run adjustment by sellers can be envisioned as a movement along a particular supply curve. It also a period of time in which buyers already in the market respond to changes in equilibrium price by adjusting the quantity demanded for a particular good or service. A short-run adjustment by buyers can be envisioned as a movement along a particular demand curve. Short-run market changes formed a new market equilibrium price from the old one. The analysis is as follows: *...
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...organization to the analysis of international trade. The new models of trade that emerged from that work didn’t supplant traditional trade theory so much as supplement it, creating an integrated view that made sense of aspects of world trade that had previously posed major puzzles. The “new trade theory” – an unfortunate phrase, now quite often referred to as “the old new trade theory” – also helped build a bridge between the analysis of trade between countries and the location of production within countries. In this paper I will try to retrace the steps and, perhaps even more important, the state of mind that made this intellectual transformation possible. At the end I’ll also ask about the relevance of those once-revolutionary insights in a world economy that, as I’ll explain, is arguably more classical now than it was when the revolution in trade theory began. 1. TRADE PUZZLES In my first year as an assistant professor, I remember telling colleagues that I was working on international trade theory – and being asked why on earth I would want to do that. “Trade is such a monolithic field,” one told me. “It’s a finished structure, with nothing interesting left to do.” Yet even before the arrival of new models, there was an undercurrent of dissatisfaction with conventional trade theory. I used to think of the propagation of this dissatisfaction as the trade counterculture. There were even some underground classics. In particular, Staffan Burenstam Linder’s An Essay on Trade and Transformation...
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...Assignment 1: Market Models Patterns of Change. 1. Describe the industry and explain the general pattern of change of the particular market model. The industry I would like to write about is the Health care industry. The degree to which individuals entry to the health care system is dependent on the wants, resources, and needs that individuals bring to the care-seeking process. Ability to obtain wanted or needed services may be influenced by many factors, including travel distance, waiting time, available financial resources, and availability of a regular source of care. (Turnock, 2001) Most countries are facing the challenge of growing healthcare demand with limited available resources. The cost of pharmaceuticals is particularly in focus since the growth in expenditure has been greater than for other healthcare components, and will accelerate with increased prevalence of chronic diseases combined with the continued launch of new expensive medicines. Consequently, various strategies have been applied in pharmaceutical policymaking to influence the quality and efficiency of prescribing, including positive and negative financial incentives, educational interventions, prescribing targets and regulatory changes. Financial incentives can be used to reduce the use of healthcare resources, improve compliance with practice guidelines or achieve general health targets. Allocating drug budgets to doctors has been suggested as an effective method to influence physicians and increase...
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...and GARCH models for each sub-period. We found that the models are considerably consistent before 2007-2008 sub-period, and there exists some minor seasonality in several subperiods, but no particular pattern can be identified for the whole period. We then tried to predict future return, volatility and VaR using the model we built for the last sub-period based on rolling forecast procedure. Though the fitted values of 10th sub-period model are very acceptable, the predicted values are reasonable yet far from satisfactory. Only some future volatility can be predicted using one-step ahead rolling forecast, and return prediction is not much better than just using historical mean, which is almost 0, to predict. These results suggest that external variables are needed for more accurate predictions, time series models alone are not sufficient. Data S&P500 index daily closing price from 1993 to 2012 are obtained from yahoo finance website. It is one of the best measures of current state of U.S. domestic economy, therefore by studying its fluctuations, consistency, seasonality and make predictions, one can determine if it is a good time to invest in U.S. stock market. Methodology We first examined the time series plots, ACF plots and PACF plots of whole period and each sub-period. Then ARIMA models for log-returns mean part and GARCH models for the conditional volatility of the log-returns are fitted. After selecting our final models for each subperiod, the final models were compared...
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...Market Efficiency and the Johannesburg Securities Exchange Table of Contents 1. Abstract 3 2. Introduction 4 3. The Johannesburg Securities Exchange 4 3.1. History 4 3.2. Function 5 4. The Efficient Market Hypothesis 5 4.1. Strong From 6 4.2. Semi-strong form 6 4.3. Weak form 7 4.4. Random Walk Hypothesis 8 5. Empirical evidence 9 5.1. Joint Hypothesis Problem 10 5.2. Capital Asset Pricing Model 11 5.3. Empirical evidence on investor overreaction 12 6. Comparisons to international stock markets 13 7. Conclusion 15 9. Bibliography 16 1. Abstract The JSE is a securities exchange based in South Africa and is considered to be the largest on the African continent. More than 400 stocks are traded on the JSE and as a result, it is important that investors are aware of the relevant information regarding stocks, which would enable investors to make sound investments. The Efficient Market Hypothesis is used to ascertain whether certain stocks and their respective prices in a particular market reflect all necessary information, which would illustrate an efficient market (Fama, 1970). Carrado and Jordan (2000) supports the aforementioned statement by affirming that markets are efficient in terms of sources of specific information, on condition that information is not exploited to earn above average returns. Furthermore, Fama (1965) explained the efficiency of markets and their stock prices by analyzing the three forms of...
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