Economics Insights @ CBS

This paper develops a stochastic general equilibrium model for an oligopoly, in which all inventory constraint parameters are endogenously determined. We propose several systems of demand processes whose distributions are dunctions of all retailers' prices and all retailers' service levels. We proceed with the investigation of the equilibrium behavior of infinite-horizon models for industries facing this type of generalized competition, under demand uncertainty.

High-dimensional problems frequently arise in the pricing of derivative securities—for example, in pricing options on multiple underlying assets and in pricing term structure derivatives. American versions of these options, i.e., where the owner has the right to exercise early, are particularly challenging to price. We introduce a stochastic mesh method for pricing high-dimensional American options when there is a finite, but possibly large, number of exercise dates.

We study linguistic access in a mixed language context by integrating the Bilingual Interactive Activation model and the Language Differential Processing model. We show that highly proficient bilinguals, compared to less proficient bilinguals, activate phonological and semantic representations of the dominant as well as the non-dominant language, and engage in differential processing for different types of scripts (phonetic vs. logographic). For highly proficient bilinguals, language emphasis (Chinese vs.