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Practitioners often standardize panel data before estimating a factor model. In this paper we show an example that the standardization leads to inconsistent estimation of the factor number. When the common component exhibits strong heteroskedasticity, the conventional eigenvalue-based decompositions are consistent but standardization does not necessarily result in consistent estimation. To overcome this issue, we recommend using a ``minimum-rule'' whereby the minimum factor-number estimated from both the conventional and standardized panel is used. Monte Carlo studies and an empirical application are provided.

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We examine an asymptotic analysis of differentiable econometric models using the distance and direction (DD) method introduced by Cho and White (2012), in which the conventional analysis for the quasi-maximum likelihood estimation and inference can be treated as a special case. We extend their approach and revisit the conventional quasi-likelihood ratio,Wald, and Lagrange multiplier test statistics through a different perspective. This new perspective is further analyzed in a unified framework, and we exploit this to introduce new classes of test statistics.

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I construct a model of an asset market subject to search frictions, in an environment where both asset liquidity and market composition are determined endogenously. The analysis predicts that higher asset prices resulting from exogenously higher asset earnings imply: (i) a shorter search duration for sellers (higher liquidity), (ii) a shorter owner tenure before listing assets for resale (turnover), (iii) a higher stock of buyers, and (iv) a higher share of the asset stock traded (trade volume). Asset price-earnings ratios respond positively to earnings because liquidity premia respond to the size of earnings relative to the costs of search. I show that liquidity effects and selection effects reinforce each other in the presence of search frictions.

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We allow sellers in Hotelling model to choose ``quality'' (referring to the gross surplus of product) before choosing prices and examine welfare implications of introducing a horizontally differentiated product into a monopoly market. Under certain parameter assumptions, we show that entry results in lower prices, lower qualities, (typically) lower consumers' surplus and lower social welfare. Our findings suggest that we should not regard the number of sellers in a differentiated market to be a simple measure of competitiveness.

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Most studies on public goods game reported that in a finitely repeated public good game subjects' contributions begin with an average contribution of about 50% of their initial endowment and decay toward the free riding level as the game progresses. Unconditional free ridings were seldom observed. To explain what causes this behavioral patterns, three hypotheses have been suggested; learning hypothesis, strategy hypothesis and reciprocity hypothesis. This paper investigates these hypotheses, and our findings from public goods experiments suggest that subjects' reciprocity is one of the main causes that produce subjects' behavioral patterns.