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ArticlePublication Metadata only Damaged durable goods, upgrades, and the coase conjecture(Mohr Siebeck, 2018-12) Özener, Başak Altan; Economics; ÖZENER, Başak AltanThis study analyzes a damaged-goods market for a perfectly durable good in an infinite-horizon, discrete-time game. We characterize Markov perfect equilibria of this game under different buyer upgrade possibilities as a function of the common discount factor, the length of the time period between successive price changes, and the quality levels of the goods. We establish that introducing a lower-quality good (or equivalently, damaging a good) works as a commitment device only if consumers holding a durable good cannot reenter the market. When a buyer can upgrade the product, we establish that for all parameter values the Coase conjecture survives.ArticlePublication Metadata only Credit decomposition and business cycles in emerging market economies(Elsevier, 2016) Bahadır, Berrak; Gumus, I.; Economics; BAHADIR, BerrakThis paper analyzes the differential effects of household and business credit dynamics on business cycles in emerging market economies. We first provide evidence that existing results relating credit expansions to economic expansions, real exchange rate appreciations and trade deficits hold more strongly for household credit than business credit. Then, using a two-sector real business cycle model of a small open economy, we study the model dynamics generated by shocks to household credit and business credit, the latter further divided into credit to tradable and nontradable sectors. The results show that the three types of credit shocks generate different dynamics in sectoral input and output levels as well as the real exchange rate. The model successfully generates the comovement between the cycle and different credit types, matching the strong positive correlation of household credit with output and real exchange rate, and the negative correlation with net exports. Our results underline the importance of distinguishing between household and business credit in studying credit dynamics.ArticlePublication Open Access On optimal toll design for bosporus crossings(Sosyoekonomi Society, 2022-10) Ekici, Özgün; Economics; EKİCİ, ÖzgünFor many years, two toll bridges served commuter demand to cross the strait called Bosporus in Istanbul, Turkey. An underground connection called the Eurasian tunnel had been recently launched to relieve the strait's traffic. We study a simple transportation model that incorporates the forces that have come into play after the opening of the Eurasian tunnel. We find that for welfare maximisation, the premium paid for using the tunnel should be fixed in the two directions and not excessive. The current toll regime violates these features, and we recommend its amendment in light of our findings.ArticlePublication Metadata only A comparison of optimal policy rules prior to and during inflation targeting: empirical evidence from Bank of Canada(Taylor & Francis, 2017) Eksi, O.; Kaya Eksi, N.; Özlale, Ümit; Economics; ÖZLALE, ÜmitWe examine policy rules that are consistent with inflation targeting (IT) framework in a small macroeconomic model of the Canadian economy. We set up an optimal linear regulator problem and derive policy rules to compare the dynamics of pre-IT and IT eras. We find that while the optimal monetary policy rule in the pre-IT period is best described with a loss function that attaches equal weight to price stability, financial stability and output stability; the IT era is dominated by the price stability objective followed by the financial stability and output stability, consecutively. Moreover, we do not find an explicit role for exchange rate stability in the objective function of the Bank of Canada for both monetary policy eras. We, then, compare the properties of the derived optimal rules with those of an ad hoc Taylor rule for the IT period. In response to inflationary shocks, Taylor rule brings down inflation rates more quickly compared to the derived policy rules, but at the cost of a higher sacrifice ratio and more volatile interest rates.ArticlePublication Metadata only On characterizing sectoral interactions via connections between employees in professional online social networks(Elsevier, 2018-12) Ayvaz, Demet; Gürsun, Gonca; Özlale, Ümit; Economics; Computer Science; GÜRSUN, Gonca; ÖZLALE, Ümit; Ayvaz, DemetThe collaboration among individuals is essential to maximize economic efficiency. Today most of the technological and economical advancements require multidisciplinary efforts. Therefore promoting interaction and knowledge sharing between industry sectors within a country is more crucial than ever. One main platform for such communication is business-oriented online social networks where thousands of professionals from various sectors connect with each other. These social networks provide a way of disseminating the latest information in technology and business. Our goal in this paper is to analyze the connectivity patterns of individuals in a business-oriented social network as a tool to understand how industry sectors are represented and interact with each other in such online platforms. To do that, we collect profiles of thousands of employees from a professional online social network. Then, first, we analyze the structural properties of the network and report its characteristics in comparison with the non-professional ones. Second, we map each employee to the sector she works in and study the connectivity patterns within each sector separately. We find that the connectivity patterns within sectors vary and the employees within a sector do not necessarily form densely connected communities. Third, we investigate the relationship between sectors via the connectivity of their employees and identify the main social clusters of sectors. We show that there are significant similarities between social connectivity and the economic transactions between sectors.ArticlePublication Open Access The asymmetric impact of oil prices, interest rates and oil price uncertainty on unemployment in the US(Elsevier, 2020-02-01) Kocaaslan, B.; Soytas, U.; Soytaş, Mehmet Ali; Economics; SOYTAŞ, Mehmet AliIn this study, we investigate the presence of asymmetric interactions between oil prices, oil price uncertainty, interest rates, and unemployment in a cointegration framework. Utilizing the nonlinear auto-regressive distributed lag (NARDL) approach, we show the asymmetric responses of unemployment to changes in oil prices, oil price uncertainty and interest rates in the long-run. More specifically, the results of our analyses suggest that an increase in oil price results in increased unemployment while there is no significant impact of reduced oil prices. On the one hand, reduced oil price uncertainty leads to a decrease in unemployment whereas an increase in oil price uncertainty does not have an impact. We also observe increased unemployment in response to a decrease in interest rates as the impact of increased interest rates is not significant. Last but not least, we find that option-implied oil price volatility, as a measure of oil price uncertainty, outperforms the conditional volatility of crude oil prices in predicting unemployment. This study provides valuable implications for policymakers to design sound economic policies.ArticlePublication Open Access On approximate Nash equilibria of the two-source connection game(TÜBİTAK, 2022) Çaşkurlu, B.; Açikalin, U. U.; Kizilkaya, F. E.; Ekici, Özgün; Economics; EKİCİ, ÖzgünThe arbitrary-sharing connection game is prominent in the network formation game literature [1]. An undirected graph with positive edge weights is given, where the weight of an edge is the cost of building it. An edge is built if agents contribute a sufficient amount for its construction. For agent i, the goal is to contribute the least possible amount while assuring that the source node si is connected to the terminal node ti. In this paper, we study the special case of this game in which there are only two source nodes. In this setting, we prove that there exists a 2-approximate Nash equilibrium that is socially optimal. We also consider the further special case in which there are no auxiliary nodes (i.e., every node is a terminal or source node). In this further special case, we show that there exists a 3/2 -approximate Nash equilibrium that is socially optimal. Moreover, we show that it is computable in polynomial time.ArticlePublication Metadata only Macroeconomic risk and hedge fund returns(Elsevier, 2014-10) Bali, T. G.; Brown, S. J.; Çağlayan, Mustafa Onur; Economics; ÇAĞLAYAN, Mustafa OnurThis paper estimates hedge fund and mutual fund exposure to newly proposed measures of macroeconomic risk that are interpreted as measures of economic uncertainty. We find that the resulting uncertainty betas explain a significant proportion of the cross-sectional dispersion in hedge fund returns. However, the same is not true for mutual funds, for which there is no significant relationship. After controlling for a large set of fund characteristics and risk factors, the positive relation between uncertainty betas and future hedge fund returns remains economically and statistically significant. Hence, we argue that macroeconomic risk is a powerful determinant of cross-sectional differences in hedge fund returns.ArticlePublication Open Access Client-server versus peer-to-peer(Boğaziçi Üniversitesi İktisadi ve İdari Bilimler Fakültesi, 2016) Özener, Başak Altan; Sunay, Mehmet Oğuz; Economics; Computer Science; ÖZENER, Başak Altan; SUNAY, Mehmet OğuzThis study identifies optimal transmission mechanisms for a video streaming service in a peer-to-peer network structure under different payment mechanisms: pay as you watch and pay upfront. We calculate a uniform, feasible service price using the utilities of the users and associated server profits for every possible peer-to-peer distribution tree. We prove that when the server has linear or concave costs, the client-server structure is more profitable than any peer-to-peer structure. This statement holds even when the users have maximal tolerance to indefinitely long pre-roll delays. When the server however, has convex costs, we show that the optimal network structure depends on the system parameters and there is no single distribution mechanism that provides the optimal server profit for every operating point of the network.ArticlePublication Metadata only Pricing decisions in a strategic single retailer/dual suppliers setting under order size constraints(Informa Group, 2016) Ekici, Ali; Özener, Başak Altan; Özener, Okan Örsan; Economics; Industrial Engineering; EKİCİ, Ali; ÖZENER, Başak Altan; ÖZENER, Okan ÖrsanIn this paper, we study a duopolistic market of suppliers competing for the business of a retailer. The retailer sets the order cycle and quantities from each supplier to minimize its annual costs. Different from other studies in the literature, our work simultaneously considers the order size restriction and the benefit of order consolidation, and shows non-trivial pricing behaviour of the suppliers under different settings. Under asymmetric information setting, we formulate the pricing problem of the preferred supplier as a non-linear programming problem and use Karush–Kuhn–Tucker conditions to find the optimal solution. In general, unless the preferred supplier has high-order size limit, it prefers sharing the market with its competitor when retailer’s demand, benefit of order consolidation or fixed cost of ordering from the preferred supplier is high. We model the symmetric information setting as a two-agent non-zero sum pricing game and establish the equilibrium conditions. We show that a supplier might set a ‘threshold price’ to capture the entire market if its per unit fixed ordering cost is sufficiently small. Finally, we prove that there exists a joint-order Nash equilibrium only if the suppliers set identical prices low enough to make the retailer place full-size orders from both.