Economics Insights @ CBS

Observers viewed random-dot optical flow displays that simulated self-motion on a circular path and judged whether they would pass to the right or left of a target at 16 m. Two dots in 2 frames are theoretically sufficient to specify circular heading if the orientation of the rotation axis is known. Heading accuracies were better than 1.5° with a ground surface, wall surface, and 3-dimensional cloud of dots and were constant over densities down to 2 dots, consistent with the theory.

This article examines the use of share repurchase as a takeover deterrent. The main result is that in the presence of an upward-sloping supply curve for shares, the takeover cost to the acquirer can be greater if the target firm distributes cash through share repurchase than if it chooses either to pay a cash dividend or to do nothing. Because shareholders willing to tender the distribution of remaining shareholders toward a more expensive pool. Examining the equilibrium behavior of all players in a stylized takeover game, conditions exist under which repurchase deters takeover.

The nature of supply curves in corporate equity are examined. Until recently, there has been little direct empirical assessment of their elasticity. At issue is whether or not the supposition of shareholder homogeneity of valuations represents a good approximation to actual markets. In Bagwell (1990), supply curves documented in Dutch auction repurchases have a distinct upward slope. Shleifer (1990) also provides evidence of an upward-sloping supply curve.

We examine the effects of nonstationarity on the performance of multiserver queueing systems withe exponential service times and sinusoidal Poisson input streams. Our primary objective is to determine when and how a stationary model may be used as an approximation for a nonstationary system. We focus on a particular quesion: How nonstationary can an arrival process be before a simple stationary approximation fails? Our analysis reveals that stationary models can seriously underestimate delays when the actual system is only modestly nonstationary.

We establish strong consistency (i.e., almost sure convergence) of infinitesimal perturbation analysis (IPA) estimators of derivatives of steady-state means for a broad class of systems. Our results substantially extend previously available results on steady-state derivative estimation via IPA.