D40 - General

• Intermediary Market Power and Capital Constraints

  Staff Working Paper 2023-51 Jason Allen, Milena Wittwer

  We examine how intermediary capitalization affects asset prices in a framework that allows for intermediary market power. We introduce a model in which capital-constrained intermediaries buy or trade an asset in an imperfectly competitive market, and we show that weaker capital constraints lead to both higher prices and intermediary markups.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Market structure and pricing JEL Code(s): D, D4, D40, D44, G, G1, G12, G18, G2, G20, L, L1, L10

• Addictive Platforms

  Staff Working Paper 2022-16 Shota Ichihashi, Byung-Cheol Kim

  We study competition for consumer attention, in which platforms can sacrifice service quality for attention. A platform can choose the “addictiveness” of its service.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models JEL Code(s): D, D4, D40, L, L5, L51

• Centralizing Over-the-Counter Markets?

  Staff Working Paper 2021-39 Jason Allen, Milena Wittwer

  Would a shift in trading in fixed-income markets—from over the counter (bilateral trading) to a centralized electronic platform—improve welfare? We use trade-level data on the secondary market for Government of Canada debt to answer this question.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Market structure and pricing JEL Code(s): D, D4, D40, D47, G, G1, G10, G2, G20, L, L1, L10

• Adverse Selection with Heterogeneously Informed Agents

  Staff Working Paper 2018-7 Mohammad Davoodalhosseini

  A model of over-the-counter markets is proposed. Some asset buyers are informed in that they can identify high quality assets. Heterogeneous sellers with private information choose what type of buyers they want to trade with.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Financial markets, Financial stability, Financial system regulation and policies, Market structure and pricing JEL Code(s): D, D4, D40, D8, D82, D83, G, G0, G01, G1, G10, G2, G20

• Micro Foundations of Price-Setting Behaviour: Evidence from Canadian Firms

  Staff Working Paper 2007-31 Daniel de Munnik, Kuan Xu

  How do firms adjust prices in the marketplace? Do they tend to adjust prices infrequently in response to changes in market conditions? If so, why? These remain key questions in macroeconomics, particularly for central banks that work to keep inflation low and stable.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices, Monetary policy transmission JEL Code(s): D, D4, D40, E, E3, E30, L, L1, L11

• Survey of Price-Setting Behaviour of Canadian Companies

  Staff Working Paper 2006-35 David Amirault, Carolyn Kwan, Gordon Wilkinson

  In many mainstream macroeconomic models, sticky prices play an important role in explaining the effects of monetary policy on the economy.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices, Monetary policy transmission JEL Code(s): D, D4, D40, E, E3, E30, L, L1, L11

• The Economic Theory of Retail Pricing: A Survey

  Staff Working Paper 2004-8 Oana Secrieru

  The types of contracts that arise in a typical vertical manufacturer–retailer relationship are more sophisticated than usually assumed in standard macroeconomic models.

  Content Type(s): Staff research, Staff working papers Topic(s): Market structure and pricing JEL Code(s): D, D4, D40, L, L2, L22, L4, L42