Sudhakar Raju
Rockhurst University, Hsom, Department Member
Research Interests:
Research Interests:
Research Interests:
The U.S. automobile market experienced dramatic changes in concentration over the six decades after World War II. In addition to dynamic changes in market structure, the U.S. automobile market experienced significant public policy changes... more
The U.S. automobile market experienced dramatic changes in concentration over the six decades after World War II. In addition to dynamic changes in market structure, the U.S. automobile market experienced significant public policy changes in the form of price and export controls. This experience provides a unique opportunity to test the effect of changing concentration on prices and the effectiveness of controls in a highly visible, dynamic industry. We identify a threshold concentration level below which prices converge to competitive equilibrium. Above this threshold, pricing is essentially consistent with monopoly pricing. Price controls appear to have reduced automobile prices while export controls had little discernible overall effect.
Research Interests:
This paper investigates the effect of an increase in ambient charges on total pollution in a Bertrand-type duopolistic market. We analyse two distinct models. In the first model, the regulator announces the ambient charge and then both... more
This paper investigates the effect of an increase in ambient charges on total pollution in a Bertrand-type duopolistic market. We analyse two distinct models. In the first model, the regulator announces the ambient charge and then both firms set their prices simultaneously. In the second model, after the regulator announces the ambient charge, both firms simultaneously choose their pollution abatement technologies in the first stage and prices in the second stage. An interesting conclusion of this paper is that in both models the strategic interaction between the firms can lead to a “perverse” ambient charge effect on total pollution. That is, an increase in the ambient charge may lead to greater pollution.
Research Interests:
Research Interests:
Research Interests:
Research Interests:
This paper develops a Vector Error Correction (VEC) model and uses the recently developed technique of 'generalized' impulse response analysis to test the empirical relationships in the Colombian economy between coffee revenues... more
This paper develops a Vector Error Correction (VEC) model and uses the recently developed technique of 'generalized' impulse response analysis to test the empirical relationships in the Colombian economy between coffee revenues and a set of macro variables. We find that ...
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This paper analyses methods to reduce the price risk of Ecuadorian oil exports through hedging in the oil futures market. I simulate ex ante cross hedges over the 1991–96 period and find that in every case, ex ante hedging would have been... more
This paper analyses methods to reduce the price risk of Ecuadorian oil exports through hedging in the oil futures market. I simulate ex ante cross hedges over the 1991–96 period and find that in every case, ex ante hedging would have been effective in reducing risk. I provide quantitative estimates of the return/risk trade-offs from hedging Ecuadorian oil and find that for risk minimising short hedges, a 1 per cent reduction in risk would have cost a reduction in return of 0.65 per cent. In sum, I find that oil futures hedging offers Ecuador significant risk-reduction potential.
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This paper obtains comparative static results for a firm that sells a single output domestically and abroad when prices in both markets are uncertain. Results are obtained for both constant absolute risk aversion and for Ross decreasing... more
This paper obtains comparative static results for a firm that sells a single output domestically and abroad when prices in both markets are uncertain. Results are obtained for both constant absolute risk aversion and for Ross decreasing absolute risk aversion, using a diagrammatic analysis which exploits the properties of expected marginal utility contours. The results depend crucially on whether foreign
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The objective of this paper is to examine the notion of delta-gamma hedging using simple stylized examples. Even though the delta-gamma hedging concept is among the most challenging concepts in derivatives, standard textbook exposition of... more
The objective of this paper is to examine the notion of delta-gamma hedging using simple stylized examples. Even though the delta-gamma hedging concept is among the most challenging concepts in derivatives, standard textbook exposition of delta-gamma hedging usually does not proceed beyond a perfunctory mathematical presentation. Issues such as contrasting call delta hedging with put delta hedging, gamma properties of call versus put delta hedges, etc., are usually not treated in sufficient detail. This paper examines these issues and then places them within the context of a fundamental result in derivatives theory - the Black-Scholes partial differential equation. Many of these concepts are presented using Excel and a simple diagrammatic framework that reinforces the underlying mathematical intuition.
Research Interests:
Research Interests:
This paper investigates the effect of an increase in ambient charges on total pollution in a Bertrand-type duopolistic market. We analyse two distinct models. In the first model, the regulator announces the ambient charge and then both... more
This paper investigates the effect of an increase in ambient charges on total pollution in a Bertrand-type duopolistic market. We analyse two distinct models. In the first model, the regulator announces the ambient charge and then both firms set their prices simultaneously. In the second model, after the regulator announces the ambient charge, both firms simultaneously choose their pollution abatement technologies in the first stage and prices in the second stage. An interesting conclusion of this paper is that in both models the strategic interaction between the firms can lead to a “perverse” ambient charge effect on total pollution. That is, an increase in the ambient charge may lead to greater pollution.