Buyers Trade Research Articles

비상장 중소·중견기업 주식의 양도소득세에 관한 문제점과 개선방안

To revitalize the capital market, the government provides tax-free benefits for minority shareholders such as KOSPI (1% or less than 5 billion won), KOSDAQ (2% or less than 5 billion won), and KONEX (4% or less than 5 billion won) if stocks are transferred through the stock market. The taxation of capital gains tax on the over-the-counter market limits the expansion of the unlisted capital market. Since 2018, in order to help small and medium-sized companies belonging to the over-the-counter market and revitalize investment smoothly, K-OTC's over-the-counter market has provided the benefit of exempting minority shareholders from the taxation of capital gains tax when they transfer the stocks of small and medium-sized companies. As for the size of the K-OTC market, the transaction value has increased by more than 10 times so far, starting with the provision of non-taxable benefits in 2018, and the increase of the size of all transactions by more than 2.5 times. In other words, the exemption from the capital gains tax of small and medium-sized companies by minority shareholders in the K-OTC market has led to the expansion of the K-OTC market. However, due to the expansion of the K-OTC market, other over-the-counter markets, as K-OTCBB, are shrinking over time. Considering that companies listed on K-OTCBB are mainly small or have not met the listing requirements of the K-OTC market, the non-taxation of capital gains tax on stocks of small and medium-sized companies provided only to K-OTC is expected to adversely affect securing investment funds for companies listed on K-OTCBB. This is expected to hinder the growth of many small and medium-sized companies and reduce the options of new investments that are attractive to investors. To solve this problem, this paper proposes the following improvement measures. Markets that comply with the standards of Article 178 (1) 1 of the Capital Markets and Financial Investment Business Act, Article 286 (1) 11 of the Capital Markets and Financial Investment Business Act, and the K-OTCBB operation enforcement regulations conducted by the Korea Financial Investment Association should be added to expand the exemption from the stock transfer income tax by adding the content of “stocks in which a single seller and buyer trade over-the-counter stock certificates of small and medium-sized enterprises through mutual consultation on the terms of transaction”. If the K-OTCBB's transfer tax exemption for small and medium-sized enterprises is expanded through the revision of Article 94 of the Income Tax Act, it is expected that the expansion of the K-OTCBB market will lead to the expansion as in the previous case in 2018. In addition, the introduction of an expansion of the capital gains tax exemption will help small and medium-sized enterprises smoothly secure funds. Through this, the size of the K-OTCBB market will grow, and it can provide attractive new investment destinations for investors. As a result, it is expected that it will have the effect of introducing investors' funds into the capital market, and it will lead to the growth of small and medium-sized enterprises and the development of the capital market.

Designing a decentralized peer-to-peer energy market for an active distribution network considering loss and transaction fee allocation, and fairness

Transactive energy management (TEM) in smart grids is a promising approach for enhancing the participation of consumers in managing their energies and developing decentralized energy market models using peer-to-peer (P2P) transactions. The present paper designs and models a fully decentralized P2P energy market considering the technical constraints of the physical electricity network to redesign electricity markets as consumer-centric markets. As the sellers and buyers trade energy via the electricity grid, allocating power losses and transaction fees to players in P2P transactions is of utmost significance. The proposed market allows prosumers to engage directly in bilateral energy trading without requiring intermediaries. In addition to local P2P markets, the buyer prosumers can purchase energy from the upstream market and participate in the demand response (DR) program during hours of local generation shortage. A fairness index is applied to evaluate the players’ satisfaction with fairness and participation in the proposed market. Finally, an alternating direction method of multipliers (ADMM) is utilized to clear the proposed decentralized market. Numerical studies are performed on a standard IEEE 13-bus distribution network with multiple prosumers. The simulation results verify the effectiveness and feasibility of the proposed decentralized market and its clearing approach.

Trading networks of price-taking buyers and sellers

We consider a situation in which sellers and buyers trade divisible goods as price-takers in a network. We first characterize equilibrium market structures under which actual trading occurs through the links. Even when the sellers and buyers are connected in a network, several markets with different prices can appear in an equilibrium. The equilibrium market structure is essentially unique in the sense that each individual faces the same price and ends up with the same quantity traded in every equilibrium. We also show how the creation of additional links in the network affects the individual payoffs and the social welfare. A creation of a link can increase or decrease the payoffs of an individual seller or buyer, but it always weakly improves the social welfare.

Variation Margins, Fire Sales, and Information-constrained Optimality

Abstract In order to share risk, protection buyers trade derivatives with protection sellers. Protection sellers’ actions affect the riskiness of their assets, which can create counterparty risk. Because these actions are unobservable, moral hazard limits risk sharing. To mitigate this problem, privately optimal derivative contracts involve variation margins. When margins are called, protection sellers must liquidate some assets, depressing asset prices. This tightens the incentive constraints of other protection sellers and reduces their ability to provide insurance. Despite this fire-sale externality, equilibrium is information-constrained efficient. Investors, who benefit from buying assets at fire-sale prices, optimally supply insurance against the risk of fire sales.

Doing Business with Strangers: Reputation in Online Service Marketplaces

Online service marketplaces allow service buyers to post their project requests and service providers to bid for them. To reduce the transactional risks, marketplaces typically track and publish previous seller performance. By analyzing a detailed transactional data set with more than 1,800,000 bids corresponding to 270,000 projects posted between 2001 and 2010 in a leading online intermediary for software development services, we empirically study the effects of the reputation system on market outcomes. We consider both a structured measure summarized in a numerical reputation score and an unstructured measure based on the verbal praise left by previous buyers, which we encode using text mining techniques. We find that buyers trade off reputation (both structured and unstructured) and price and are willing to accept higher bids posted by more reputable bidders. Sellers also respond to changes in their own reputation through three different channels. They increase their bids with their reputation score (price effect) but primarily use a superior reputation to increase their probability of being selected (volume effect) as opposed to increasing their bid prices. Negative shocks in seller reputation are associated to an increase in the probability of seller exit (exit effect), but this effect is moderated by the investment that the seller has made in the site. We conclude that participants in this market are very responsive to the numerical reputation score and also to the unstructured reputational information, which behaves in a similar way to the structured numerical reputation score but provides complementary information.

Nash and integrated solutions in a just-in-time seller–buyer supply chain with buyer's ordering cost reductions

The seller frequently offers the buyer trade credit to settle the purchase amount. From the seller's prospective, granting trade credit increases not only the opportunity cost (i.e., the interest loss on the buyer's purchase amount during the credit period) but also the default risk (i.e., the rate that the buyer will be unable to pay off his/her debt obligations). On the other hand, granting trade credit increases sales volume and revenue. Consequently, trade credit is an important strategy to increase seller's profitability. In this paper, we assume that the seller uses trade credit and number of shipments in a production run as decision variables to maximise his/her profit, while the buyer determines his/her replenishment cycle time and capital investment as decision variables to reduce his/her ordering cost and achieve his/her maximum profit. We then derive non-cooperative Nash solution and cooperative integrated solution in a just-in-time inventory system, in which granting trade credit increases not only the demand but also the opportunity cost and default risk, and the relationship between the capital investment and the ordering cost reduction is logarithmic. Then, we use a software to solve and compare these two distinct solutions. Finally, we use sensitivity analysis to obtain some managerial insights.

Optimal trade credit and lot size policies in economic production quantity models with learning curve production costs

In reality, a seller (e.g., a supplier or a manufacturer) frequently offers his/her buyers trade credit (e.g., permissible delay in payment). Trade credit reduces the buyer's holding cost of inventory and hence attracts new buyers who consider it to be a type of price reduction. On the other hand, granting trade credit also increases the seller's opportunity cost (i.e., the loss of capital opportunity during the credit period) and default risk (i.e., the event in which the buyer will be unable to make the required payments on his/her debt obligation). In addition, it is a well-known fact of learning-by-doing that production cost of a new product declines by a factor of from 10 to 50 percent each time the accumulated production volume doubles. Therefore, we propose an economic production quantity model from the seller's prospective to determine his/her optimal trade credit period and production lot size simultaneously in which (i) trade credit increases not only sales but also opportunity cost and default risk, and (ii) production cost declines and obeys a learning curve phenomenon. Then the necessary and sufficient conditions to obtain the seller's optimal trade credit and order quantity are derived. Finally, we use some numerical examples to illustrate the theoretical results and to provide some managerial insights.

Buyers pay for and sellers invest in a good reputation: More evidence from eBay

This article contributes to the research on trust and reputation formation in anonymous online markets. I first give a formal account of the reputation mechanism in anonymous online markets and derive testable hypotheses. Based on the analysis of a large set of process data (N≈176,000), I corroborate a statistically and economically significant seller reputation effect on the probability of sale and the selling price both in auctions and fixed price offers. Moreover, my analysis shows that sellers making fixed price offers invest in a good reputation to a similar extent as buyers pay for it in auctions. Finally, I obtain repeated observations on a considerable subset of the buyer population by including highest non-winning bids in the analysis and show that buyers trade off sellers’ reputations and prices within the set of offered items they choose to bid on. My findings provide further evidence that reputation systems solve trust problems and reduce transaction costs in anonymous online markets by providing incentives for traders’ cooperative behavior.

Behavior-Based Price Discrimination by a Patient Seller

We investigate a model in which one seller and one buyer trade in each of two periods. The buyer has demand for one unit of a non-durable object per period. The buyer's reservation value for the good is private information and is the same in both periods. The seller commits to prices in each of two periods. Prices in the second period may depend on the buyer's first-period behavior. Unlike the equal discount factor case studied in earlier papers, we show that when the seller is more patient than the buyer, second-period prices increase after a purchase. In particular, the optimal dynamic pricing scheme is not a repetition of the optimal static pricing scheme.

Reputation in Online Service Marketplaces: Empirical Evidence from a Transactional Dataset

Online service marketplaces allow service buyers to post their project requests and service providers to bid for them. In order to reduce the transactional risks, marketplaces typically track and publish previous seller performance. By analyzing a detailed transactional dataset with more than 1,800,000 bids corresponding to 270,000 projects posted between 2001 and 2010 in a leading online intermediary for software development services, we empirically study the effects of the reputation system on market outcomes. We consider both a structured measure summarized in a numerical reputation score and a unstructured measure based on the verbal praise left by previous buyers, which we encode using text mining techniques. We find that buyers trade off reputation (both structured and unstructured) and price and are willing to accept higher bids posted by more reputable bidders. Sellers also respond to changes in their own reputation through three different channels. They increase their bids with their reputation score (price effect), but primarily use a superior reputation to increase their probability of being selected (volume effect) as opposed to increasing their bid prices. Negative shocks in seller reputation are associated to an increase in the probability of seller exit (exit effect), but this effect is moderated by the investment that the seller has made in the site. We conclude that participants in this market are very responsive to the numerical reputation score and also to the unstructured reputational information, which behaves in a similar way to the structured numerical reputation score, but provides complementary information.

Behavior - Based Price Discrimination by a Patient Seller

We investigate a model in which one seller and one buyer trade in each of two periods. The buyer has demand for one unit of a non-durable object per period. The buyer's reservation value for the good is private information and is the same in both periods. The seller commits to prices in each of two periods. Prices in the second period may depend on the buyer's first-period behavior. Unlike the equal discount factor case studied in earlier papers, we show that when the seller is more patient than the buyer, second-period prices increase after a purchase. In particular, the optimal dynamic pricing scheme is not a repetition of the optimal static pricing scheme.

A group formation support system based on substitute goods in group buying

AbstractIn electronic marketplaces, group buying is seen as an effective form of electronic commerce and a promising field for applying agent technologies. We study decision support systems for buyers in group buying. In group buying, when buyers cooperate with each other, a seller can discount the price of a good. In many existing group buying sites, some sellers deal in the same sort goods or their imitations. Buyers form coalitions for each item on sale. Buyers cannot always purchase goods at a lower price, because the buyers' subgroups are distributed. Buyers need to search hard to find goods they can purchase. In this paper, we propose a group buying marketplace on the Internet. In our marketplace, buyers can purchase goods at a lower price by forming coalitions. Our system can provide a service in which buyers are integrated based on their multiattribute preferences (utilities). Our system supports buyers' decision making by using the Analytic Hierarchy Process. We propose three methods for group integration. First, buyers trade in simple group buying. Second, all buyers are integrated. Third, some buyers are integrated. The advantages of our market are that buyers' multiattribute utilities are effectively expressed in group integration and buyers can purchase goods at a lower price. Buyers' payments are decided based on their degree of compromise. A successful seller can sell goods in their stock. © 2004 Wiley Periodicals, Inc. Syst Comp Jpn, 35(10): 23–31, 2004; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/scj.10695

Same Time Next Year—Buyer Trade Show Motives

In this article, a model of industrial buyer attendance motives at trade shows is presented. Using the idea of buying centers, we identify the groups of people that sellers should have in mind at a trade show. Buyers are segmented into current, potential, and nonbuyers; motives are assigned to each of the resulting categories of buyers, and illustrations of these motives are given, using information from trade shows in the helicopter industry. Finally, some of the practical implications of the model are discussed, so that trade show exhibitors can plan everything from exhibit space to giveaways to personnel in order to meet buyers' needs.

Exclusive Contracts and Protection of Investments

We consider the effect of a renegotiable exclusive contract restricting a buyer to purchase from only one seller on the levels of noncontractible investments undertaken in their relationship. Contrary to some informal claims in the literature, we find that in this setting exclusivity has no direct effect on investments, i.e. those that are specific to the relationship. The direct effect of exclusivity is instead to increase the investments of the seller (those which enhance the value of the buyer's trade with other sellers) and to reduce those of the buyer. Exclusivity may have an indirect effect on internal investments; the direction of this effect depends on the nature of any complementarities or substitutabilities between external and internal trades and investments. We relate these findings to existing informal discussions of the role of exclusivity in protecting investments. We also examine the effects of exclusivity on aggregate welfare, the private incentives of the buyer-seller coalition to use it, and the resulting externality on other potential suppliers.

The existence and computation of competitive equilibria in markets with an indivisible commodity

This paper considers an exchange economy called a generalized assignment market, in which sellers and buyers trade one indivisible commodity possibly with product differentiation for a perfectly divisible commodity. The existence of a competitive equilibrium in this economy is proved using Kakutani's fixed point theorem. This existence theorem is applied to a production economy in which sellers are formulated as producers with convex cost functions. Two examples of housing markets are provided and their competitive equilibria are numerically calculated.