On the Estimation of Marginal Cost

Delis, Manthos D.; Iosifidi, Maria; Tsionas, Efthymios G.

doi:10.1287/opre.2014.1264

Cited by 33 publications

(6 citation statements)

References 24 publications

(29 reference statements)

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“…We check the robustness of our results by using the translog model. We find some deviations in our results that are in line with the study of Delis, Iosifidi, and Tsionas (). However, our main results on the effect of foreign bank presence on bank market power are qualitatively similar.…”

supporting

confidence: 92%

“…A popular approach has been to estimate a translog cost function and take its derivative to obtain the marginal cost. Some recent work has shown that it is possible to improve on this methodology with semiparametric or nonparametric methods that allow for more flexibility in the functional form (McAllister and McManus , Delis, Iosifidi, and Tsionas ). We follow this new literature and estimate the cost function using a partial linear smooth coefficient (PLSC) model.…”

Section: Variables and Datamentioning

confidence: 99%

“…Hence, this approach takes into account the heterogeneity in the production technology across banks, countries, and time. Delis (), Wheelock and Wilson (), and Delis, Iosifidi, and Tsionas () show that estimation of marginal cost using semiparametric and nonparametric methods produces significantly better results (in terms of lower bias) than parametric techniques and commonly used functional forms like the translog.…”

Section: Variables and Datamentioning

confidence: 99%

See 2 more Smart Citations

Foreign Ownership and Market Power in Banking: Evidence from a World Sample

Delis¹,

Kokas²,

Ongena³

2016

J of Money Credit Banking

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Ownership and competition in the banking sector are policy concerns around the world that are rarely comprehensively examined. For 131 countries and 13 years we match bank ownership with over 50,000 bank-year estimates of individual bank market power. At the individual bank level, ownership does not explain market power. At the country level, on the other hand, foreign bank ownership has a positive and significant impact on bank market power because foreign banks enter through mergers or acquisitions and not through greenfield investments. We also find that the positive effect of foreign bank presence on market power is considerably weaker in countries with well-capitalized banks.

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supporting

confidence: 92%

Section: Variables and Datamentioning

confidence: 99%

Section: Variables and Datamentioning

confidence: 99%

See 1 more Smart Citation

Foreign Ownership and Market Power in Banking: Evidence from a World Sample

Delis¹,

Kokas²,

Ongena³

2016

J of Money Credit Banking

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“…for small investments x i , with the prefactor c i corresponding to the initial marginal costs [28]. The occurrence of catastrophic poverty depends on the functional form of the dispersion relation close to the profitability limit, viz.…”

Section: Convex and Concave Cost Functionsmentioning

confidence: 99%

Generic catastrophic poverty when selfish investors exploit a degradable common resource

Gros

2023

R. Soc. open sci.

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The productivity of a common pool of resources may degrade when overly exploited by a number of selfish investors, a situation known as the tragedy of the commons. Without regulations, agents optimize the size of their individual investments into the commons by balancing incurring costs with the returns received. The resulting Nash equilibrium involves a self-consistency loop between individual investment decisions and the state of the commons. As a consequence, several non-trivial properties emerge. For N investing actors we prove rigorously that typical payoffs do not scale as 1/ N , the expected result for cooperating agents, but as (1/ N ) 2 . Payoffs are hence reduced with regard to the functional dependence on N , a situation denoted catastrophic poverty. We show that catastrophic poverty results from a fine-tuned balance between returns and costs. Additionally, a finite number of oligarchs may be present. Oligarchs are characterized by payoffs that are finite and not decreasing when N increases. Our results hold for generic classes of models, including convex and moderately concave cost functions. For strongly concave cost functions the Nash equilibrium undergoes a collective reorganization, being characterized instead by entry barriers and sudden death forced market exits.

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“…The GTL models are widely used in applied econometrics modeling of activities in the aggregate economy, manufacturing and service industries, and in establishments 1 [see, for example, energy (Boluk & Koc, 2010), banking (Horvath, Seidler, & Weill, 2016;Knott, Posen, & Wu, 2009), supply chain logistics (Liu, Wang, Yao, & Yue, 2016), agriculture (Kavoi, Hoag, & Prichett, 2009), health systems (Granderson, 2011;Suraratdecha & Okunade, 2006), primary healthcare (Guiffrida, Gravelle, & Sutton, 2000), general cost modeling (Delis, Iosifidi, & Tsionas, 2014), aluminum smelting (Gagne & Nappi, 2000)], information technology (Chwelos, Ramirez, Kraemer, & Melville, 2010), and others. The widespread acceptance of the GTL is rooted in (Christensen, Jorgenson, & Lau, 1973), a landmark paper.…”

Section: Generalized Translog Modelsmentioning

confidence: 99%

Sensitivity of generalized translog model estimates to alternative Pythagorean means: Evidence from US healthcare

2018

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The generalized translog cost (GTLC) methodology is widely used in applied econometric modeling of production. Usually without rationale, the mean expansion point is overwhelmingly the arithmetic. However, the arithmetic mean could yield biased estimates and inferences. Consequently, our core innovation is testing operational inferences from fitting a dual GTLC model to multiple expansion points of data concerning US physical therapy, an increasingly vital industry. Our panel data includes 4,500 bi‐weekly observations across 27 US states. The study clearly demonstrates how the economic contents (e.g., economies of scale and elasticities) of the underlying production technology differ markedly across the three Pythagorean means.

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On the Estimation of Marginal Cost

Cited by 33 publications

References 24 publications

Foreign Ownership and Market Power in Banking: Evidence from a World Sample

Foreign Ownership and Market Power in Banking: Evidence from a World Sample

Generic catastrophic poverty when selfish investors exploit a degradable common resource

Sensitivity of generalized translog model estimates to alternative Pythagorean means: Evidence from US healthcare

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