Re: hedging: good or bad?

["Alan G. Isaac" <AISAAC@xxxxxxxxxxxx>]

The price is posted by the newspaper companies, who support it at
the newstand level with a commitment to repurchase unsold papers.

Incidently, I asked a newstand operator whether he thought
end-of-the-day demand would respond to a lower end-of-the-day
price. He said no, for what it's worth.

So the question remains, why do newspaper companies post
an inflexible price. It is this question which I think
New Keynesian posted price analysis--which is fully
optimizing, btw--sheds some light on.

--Alan G. Isaac

On Mon, 17 Apr 1995 18:11:22 -0600 <pdavidso@xxxxxxxxxxxxxxxxxx> said:
>But Alan, newsdealers are independent businessmen, not employees of the
>newspaper companies -- and there is a great deal of competition amongst
>newstands -- even I think in Washington DC, so just posting a price will
>not do. For all the newpaper companies to force the independent
>newsstand operator to maintain involuntary maintain a "posted price" when
>at the end of the day the unsold inventory of newspapers would have a
>zero demand price would bea violation of the antitrust laws and not in the
>dealers's self-interest. So the dealers' would have a great incentive to
>cheat except for the institution of the hints I gave in my previous
>tweaking Alan. Give up?
>
>On Mon, 17 Apr 1995, Alan G. Isaac wrote:
>
>> Twicking back...
>> Paul Davidson asks why newspaper prices don't decline in the course
>> of a day. This seems a perfect illustration on the New Keynesian
>> analysis of posted prices.
>> --Alan G. Isaac
>>