Hanken School of Economics
Rune Stenbacka is Professor of Economics at Hanken School of Economics since 1996. He has served as co-director for the Research Unit of Economic Structures and Growth (RUESG) at the University of Helsinki 2004-08 (Center of Excellence in Research 2002-07). Stenbacka has been a professor of Industrial Economics at the School of Business, Economics and Law at University of Gothenburg and served as Mercator Professor at University of Freiburg.
Professor Stenbacka's research has predominantly focused on industrial economics with a particular focus on applied oligopoly theory as well as analysis of competition strategy and competition policy. He has also made contributions to the theory of financial intermediation, to labour economics and the economics of technology.
Rune Stenbacka is an associate editor of European Economic Review, International Journal of Industrial Organization and Journal of Economic Behavior & Organization and he has served as an associate editor for Journal of Industrial Economics. He has published in journals like, for example, The Economic Journal, Economic Theory, European Economic Review, International Journal of Industrial Organization, Journal of Banking & Finance, Journal of Economics & Management Strategy, Journal of Industrial Economics, Journal of Mathematical Economics, Management Science and Review of Finance.
Rune Stenbacka has been a member of the Competition Council in Finland, a member of the Economic Advisory Group for Competition Policy at the European Commission and he is presently a member of the Council for Competition Research in Sweden. Stenbacka has actively conducted expert consulting focusing on competition analysis, competition policy and regulatory issues for major Finnish companies.
Articles published in international journals since 2004
- "Equilibrium Unemployment with Outsourcing and Wage Solidarity under Labour Market Imperfections," European Economic Review, forthcoming (with Erkki Koskela).
- "Decentralized Screening: Coordination Failure, Multiple Equilibria and Cycles," Journal of Financial Stability, forthcoming (with Thomas Gehrig).
- "Equilibrium Unemployment with Outsourcing under Labour Market Imperfections," Labour Economics, 2009 (16), 284-290 (with Erkki Koskela).
- "Price Competition, Business Hours, and Shopping Time Flexibility," The Economic Journal, 2008 (118), 1171-1195 (with Oz Shy).
- "Assessing Market Dominance," Journal of Economic Behavior & Organization, 2008 (68), 63-72 (with Arie Melnik and Oz Shy).
- "Rethinking the Roles of Banks: A Call for Narrow Banking," The Economists' Voice, 2008 (5), Issue 2, Article 6 (with Oz Shy).
- "Liquidity Provision and Optimal Bank Regulation," International Journal of Economic Theory, 2007 (3), 219-233 (with Oz Shy).
- "Partial Outsourcing: A Real Options Approach," International Journal of Industrial Organization, 2007 (25), 91-102 (with Luis Alvarez).
- "Information Sharing and Lending Market Competition with Switching Costs and Poaching," European Economic Review, 2007 (51), 77-99 (with Thomas Gehrig).
- "Takeover Timing, Implementation Uncertainty and Embedded Divestment Options," Review of Finance, 2006 (10), 417-441.
- "Service Hours with Asymmetric Distributions of Ideal Service Time," International Journal of Industrial Organization, 2006 (24), 763-771 (with Oz Shy).
- "An Economic Approach to Article 82," Competition Policy International, 2006 (2), 111-154 (with Jordi Gual, Martin Hellwig, Anne Perrot, Michele Polo, Patrick Rey and Klaus Schmidt).
- "Flexible and Committed Proft Sharing with Wage Bargaining: Implications for Equilibrium Unemployment," Journal of Economics, 2006 (87), 159-180 (with Erkki Koskela).
- "Partial Outsourcing, Monitoring Cost, and Market Structure," Canadian Journal of Economics, 2005 (38), 1173-1190 (with Oz Shy).
- "Profit Sharing, Credit Market Imperfections and Equilibrium Unemployment," The Scandinavian Journal of Economics, 2004 (106), 677-701 (with Erkki Koskela).
- "Differentiation-Induced Switching Costs and Poaching," Journal of Economics & Management Strategy, 2004 (13), 635-655 (with Thomas Gehrig).
- "Profit Sharing and Unemployment: An Approach with Bargaining and Efficiency Wages," Journal of Institutional and Theoretical Economics, 2004 (160), 477-494 (with Erkki Koskela).
- "Agency Cost of Debt and Credit Market Imperfections: A Bargaining Approach," Bulletin of Economic Research, 2004 (56), 365-377.
-"Market Structure and Risk Taking in the Banking Industry," Journal of Economics, 2004 (82), 249-280 (with Oz Shy).
- "Optimal Liquidity Management and Bail-Out Policy in the Banking Industry," Journal of Banking and Finance, 2004 (28), 1319-1335 (with Staffan Ringbom and Oz Shy).
- "Optimal Risk Adoption: A Real Options Approach," Economic Theory, 2004 (23), 123-148 (with Luis Alvarez).
The current financial crisis is characterized by a massive deterioration of liquidity and trust among participants. This can be witnessed especially in the interbank markets, which after the Lehman Brother’s debacle essentially completely dried up. How can markets be made functioning again? How can trust be restored? How can the financial system be repaired? What should be the pillars of a new financial order? These are the main issues the project attempts to address. Three main themes will be pursued:
1. How does market information affect market liquidity and the informational content of market prices? How can such prices be useful for regulatory policies. For example, which role should they play for accounting purposes?
2. How should securities be priced, when arbitrage is impaired, e.g. for lack of liquidity?
3. How do behavioural features such as ambiguity aversion and loss aversion affect market prices and market liquidity?
Ultimately, the insights from basic research about individual behaviour and the reactions of the marekt system will provide guidance into the basic pillars a new financial order might be based upon.