Prices

The purpose of this study is to determine what factors could influence an economic agents' decision to travel or vacation in Florida. This study measures this decision by analyzing the state Division of Tourism estimates for visitors in light of changes in; national gross domestic product, non-aviation gasoline prices, average airfares, and exchange rates. This data was compiled on a quarterly basis form 1980 to 1993 and analyzed by employing Translog and Cobb-Douglas demand functional forms for use in regression analysis. Based upon the regression results, the Cobb-Douglas functional form best represents what has historically occurred in the real economic world and follows generally accepted micro-economic demand theory. The Cobb-Douglas techniques reveal that an economic agents' future income expectations, measured by GDP levels, has a significant influence on Florida visitor estimates and has a role in the decision to vacation in Florida.

In classical economic theory, competition consisted of buyers outbidding
one another and sellers underbidding one another; and it was
argued that, for sufficiently large markets, competition would yield uniform
prices in equilibrium. Neoclassical economists subsequently investigated
the role of preferences in trading, concluding that, in equilibrium,
each trader would obtain the most desirable commodity bundle
affordable at prevailing prices, given his initial resources. In the
process, however, neoclassical economists ultimately made price uniformity
an assumption, assumed individuals incapable of influencing prices
under any circumstances, and redefined competition to mean price-taking
behavior. By thus denying individuals any active role in price determination,
an inconsistency was introduced into the theory. This thesis
eliminates the inconsistency by combining classical competitive behavior
and the neoclassical insights into the role of preferences, to produce an
axiomatic theory of competition within which the characteristics of equilibrium
(uniform prices and utility maximization) are rigorously derived.

In many markets sellers have to make decisions on the rate of price change for a product. Prices can be increased or decreased by making a single large change, or as by making multiple smaller changes over time, leading to the same final price. The concern of sellers is the consumer response, in terms of the product's demand. With the exception of deliberate demarketing, sellers seek to minimize demand decreases in response to price increases, and maximize the positive impact in terms of increased purchases, when prices are decreased. Price changes can be made in a short period, or over a more extended duration. In some buying contexts the market may be characterized by highly fluctuating prices that create price uncertainty in the minds of the consumer. Further, consumers give varying levels of importance or weight to their past purchase experience when they make purchase decisions. This research develops theory and examines hypotheses to examine the effectiveness of single versus multiple price change strategies over time, in different contexts, using a prospect theory and reference price framework. The study finds (1) The greater the number of purchase occasions between successive price changes, the lesser is the impact on demand of a strategy of multiple price changes. (2) In situations of high price uncertainty strategies of multiple price increases lead to smaller demand decreases, and strategies of multiple price increases lead to higher demand increases, when compared to price certain situations. (3) The importance or weight assigned by consumers to the last purchase experience does not appear to significantly impact the outcomes of intertemporal price strategies. (4) The impact of price decreases appears to be more than that of price increases, in the two contexts of uncertainty, and a greater weight being assigned to the last purchase occasion. In previous research prospect theory has been used primarily in a static framework, and the prospect theory approach has used reference prices to analyze the impact of price changes in product bundling situations. This research extends the prospect theory and reference price framework to price change strategies over time, where reference prices vary and adapt.

Information leakage before full acquisitions has been widely documented. The information leakage, and the resulting pre-bid runup in the target's stock, generally increases the total cost of the acquisition. That is, information leakage and the ensuing pre-bid runup is a gain to the target and loss to the acquirer. Herein, I first ascertain the characteristics of full acquisitions that affect the amount of information leakage. I find that if the acquirer borrows to finance the acquisition then information leakage is greater. Further if the acquirer is foreign, if the target is a high-tech firm, and if the target has options on its stock all increase information leakage. I find hostile deals are effective in reducing information leakage. Lastly, information leakage increases in the percentage of managerial ownership. I next hypothesize that the identity and intent of partial acquirers is known to market participants before the announcement of a partial acquisition. I find that the market can anticipate whether a partial acquirer intends to fully-acquire or take an active role in the management of the target. Also, the market anticipates whether the acquirer is a private investment find or a non-financial corporation. Further, the acquirer's identity or intent is fully reflected in the target's stock price before the announcement of the partial acquisition. These results help explain why there are few partial acquisitions as precursors to full acquisitions.

The main objective of this thesis is to simulate, evaluate and discuss three standard methodologies of calculating Value-at-Risk (VaR) : Historical simulation, the Variance-covariance method and Monte Carlo simulations. Historical simulation is the most common nonparametric method. The Variance-covariance and Monte Carlo simulations are widely used parametric methods. This thesis defines the three aforementioned VaR methodologies, and uses each to calculate 1-day VaR for a hypothetical portfolio through MATLAB simulations. The evaluation of the results shows that historical simulation yields the most reliable 1-day VaR for the hypothetical portfolio under extreme market conditions. Finally, this paper concludes with a suggestion for further studies : a heavy-tail distribution should be used in order to imporve the accuracy of the results for the two parametric methods used in this study.

The Market Timing - Buy and Hold (MT-BH) is introduced, tested against widely accepted performance models of market timing and tested if implamentation is possible. The MT-BH metric measures the condition of engaging in market timing strategies relative to buy and hold investing across an equity market. The metric provides an alternative explanation to why market timing results of investors and managers vary through time and across different equity markets. This dissertation examines how the is correlated with traditional market timing measures of the Treynor and Sharpe ratios over the 1995-2010 time period and how it affects widely used measures of regression based market timing models of Treynor- Mazuy and Henriksson-Merton. The Market Timing - Buy and Hold (MT-BH) metric can be applied to any equity market over any time period to condition the market timing skill of money managers in any equity market around the world. The final accomplishment of this dissertation is to determine if readily available finance and macro-economic variables can help investors determine which years are more favorable to pursue market timing strategies and which years favor buy and hold investing. When real GDP growth rates, inflation rates and PE ratios were low or negative and when dividend yields were high, market timing strategies were favorable across 44 country market indexes from 1994-2008. These results were robust to country level of development, negative market return years and other control variables. The conditions for pursing market timing strategies were time variant and detectable with macro-economic and finance variables. The MT-BH metric allows investors and brokers to determine when to switch from buy and hold investing to a market timing strategy using macro-economic and financial variables and helps to explain why market timing skill of managers is rarely found to be persistent.