Trust and the don't‐want‐to‐complain bias in peer‐to‐peer platform markets

This paper addresses peer‐to‐peer (P2P) digital platform markets, often associated with the “sharing economy” or the “collaborative economy”. Such digital platforms, facilitating new purchasing channels for consumers by matching P2P supply and demand, can be considered new market places challenging the conventional markets. How are P2P platform markets evaluated by the consumers? Based on a comprehensive survey‐data material, five different P2P service markets are considered by peer buyers and the results compared to consumers’ evaluations from similar conventional service markets according to trust, comparability and consumers’ satisfaction with the transactions. Comparability seems to be one advantage for the platform markets, while trust could become a problem. Conditions for trust in P2P platform markets is particularly interesting to study because contrary to conventional markets P2P transactions cannot rely on governmental laws, regulations and security net. This trust problem has been solved by a trust‐generating rate and review system. Our data material, however, distinguishes a mechanism that we have coined as the don't‐want‐to‐complain bias. More precisely, people do not like to complain, hence buyers of P2P services often hesitate to give negative ratings when they are discontent with a service or a supplier. Therefore, positive ratings become overestimated. If consumers recognize this bias, ratings and reviews will lose credibility and no longer be considered trustworthy. Eventually, this may threaten the well‐functioning of P2P markets.     

THEORETICAL FOUNDATIONS OF PAY‐AS‐YOU‐GO DEFINED‐CONTRIBUTION PENSION SCHEMES

The paper inquires into notional defined contribution pension schemes, which retain the pay‐as‐you‐go financing method while adopting the award and indexation formulas typical of funded, defined‐contribution systems. It examines the properties of the new arrangement and compares them with those of the traditional defined‐benefit pay‐as‐you‐go schemes.     

Value‐at‐Risk bounds with two‐sided dependence information

Value‐at‐Risk (VaR) bounds for aggregated risks have been derived in the literature in settings where, besides the marginal distributions of the individual risk factors, one‐sided bounds for the joint distribution or the copula of the risks are available. In applications, it turns out that these improved standard bounds on VaR tend to be too wide to be relevant for practical applications, especially when the number of risk factors is large or when the dependence restriction is not strong enough. In this paper, we develop a method to compute VaR bounds when besides the marginal distributions of the risk factors, two‐sided dependence information in form of an upper and a lower bound on the copula of the risk factors is available. The method is based on a relaxation of the exact dual bounds that we derive by means of the Monge–Kantorovich transportation duality. In several applications, we illustrate that two‐sided dependence information typically leads to strongly improved bounds on the VaR of aggregations.     

Predicting financial volatility: High‐frequency time‐series forecasts vis‐à‐vis implied volatility

Recent evidence suggests option implied volatilities provide better forecasts of financial volatility than time‐series models based on historical daily returns. In this study both the measurement and the forecasting of financial volatility is improved using high‐frequency data and long memory modeling, the latest proposed method to model volatility. This is the first study to extract results for three separate asset classes, equity, foreign exchange, and commodities. The results for the S&P 500, YEN/USD, and Light, Sweet Crude Oil provide a robust indication that volatility forecasts based on historical intraday returns do provide good volatility forecasts that can compete with and even outperform implied volatility. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:1005–1028, 2004     

Message‐to‐person versus person‐to‐message: An alternative way to conceptualize personalized advertising

This study provides an alternative way to conceptualize personalized advertising and discusses when and why nonpersonalized information can be more effective than personalized information in changing people's attitudes and behavioral intentions. Different from the traditional personalization approach in the literature that personalizes a message for an individual, this alternative way of thinking is to personalize an individual for a message. It is argued that an individual can be personalized for a message via priming tactics and it leads to reverse personalization effects where a nonpersonalized message generates stronger persuasion effects than a personalized message. The effects of priming on personalization are moderated by perceived prime credibility and mediated by perceived message relevance.     

TIME‐CONSISTENT AND MARKET‐CONSISTENT EVALUATIONS

We consider evaluation methods for payoffs with an inherent financial risk as encountered for instance for portfolios held by pension funds and insurance companies. Pricing such payoffs in a way consistent to market prices typically involves combining actuarial techniques with methods from mathematical finance. We propose to extend standard actuarial principles by a new market‐consistent evaluation procedure which we call “two‐step market evaluation.” This procedure preserves the structure of standard evaluation techniques and has many other appealing properties. We give a complete axiomatic characterization for two‐step market evaluations. We show further that in a dynamic setting with continuous stock prices every evaluation which is time‐consistent and market‐consistent is a two‐step market evaluation. We also give characterization results and examples in terms of g‐expectations in a Brownian‐Poisson setting.     

Regime‐dependent smile‐adjusted delta hedging

We introduce several regime‐dependent smile‐adjusted deltas and compare their efficiency with the smile‐adjusted deltas that are popular with option traders. Using years of daily option prices, out‐of‐sample hedging performance tests for options of all moneyness and maturities and daily, weekly, or fortnightly rebalancing show that even the simplest regime‐dependent smile‐adjustment consistently outperforms implied BSM delta hedging and local volatility and minimum variance smile‐adjustments. Markov‐switching deltas offer the best performance, with delta‐hedging errors often half the size of implied BSM hedging errors. During volatile markets risk reduction from regime‐dependent delta hedging is much greater than during tranquil periods.     

ON THE DYBVIG‐INGERSOLL‐ROSS THEOREM

The Dybvig‐Ingersoll‐Ross (DIR) theorem states that, in arbitrage‐free term structure models, long‐term yields and forward rates can never fall. We present a refined version of the DIR theorem, where we identify the reciprocal of the maturity date as the maximal order that long‐term rates at earlier dates can dominate long‐term rates at later dates. The viability assumption imposed on the market model is weaker than those appearing previously in the literature.     

Self‐similarity in long‐horizon returns

Asset returns incorporate new information via the effects of independent and possibly identically distributed random shocks. They may also incorporate long memory effects related to the concept of self‐similarity. The two approaches are here combined. In addition, methods are proposed for estimating the contribution of each component and evidence supporting the presence of both components in both the physical and risk‐neutral distributions is presented. Furthermore, it is shown that long‐horizon returns may be nonnormal when there is a self‐similar component. The presence of a self‐similar component also questions positive equity biases over the longer term.     

A Reconsideration of Rent‐to‐Own

Rent‐to‐own agreements (RTO) are traditionally seen as disguised installment contracts imposed on uninformed consumers at usurious interest rates. After the flaws and omissions in these interest rate calculations are addressed, the implied annual percentage rates (APRs) remain extraordinarily high. It is shown that alternatives to RTO, such as layaway and long‐term rental, yield comparable APRs. The appeal of rent‐to‐own is then attributed to its structure that includes an initial pure rental phase of high value to persons in volatile financial and/or personal situations followed by an installment phase. Should these situations be resolved, the consumer exercises an imbedded option to acquire a perhaps otherwise unobtainable installment agreement at a competitive interest rate.     

Behaviour‐Based and Outcome‐Based Control Systems: A Meta‐Analytic Study

Sales control systems are instruments used by firms to improve performance and other organizational outcomes. To understand their antecedents and consequences, this paper conducts a meta‐analysis based on 104 studies. The results showed significant relationships between behaviour‐ and outcome‐based control systems and the complexity of the products, bonuses, financial performance, sales innovation, organizational support and satisfaction with supervisors. The outcomes revealed that behaviour‐based control systems were the most effective mechanism in turbulent markets and for determining financial performance. However, outcome‐based control systems were the most efficient instrument for complex products.     

A Gender‐Aware Study of Self‐Leadership Strategies among High‐Growth Entrepreneurs

We apply a gender‐aware framework to examine the self‐leadership strategies men and women early stage high‐growth entrepreneurs employ as they develop innovations. Utilizing a matched‐pair sample of early stage entrepreneurs operating firms in high‐technology business incubators, our results suggest that female and male entrepreneurs have significantly different self‐goal‐setting and self‐cueing behaviors. Results also suggest male entrepreneurs who use stronger goal‐setting behaviors increase their intellectual property development to a greater extent than female founders. Further, for female entrepreneurs who use greater self‐cueing, the negative relationship realized with intellectual property development is lower than for male entrepreneurs.     

Just‐in‐Time Retail Distribution: A Systems Perspective on Cross‐Docking

Cross‐docking is a just‐in‐time strategy for distribution logistics. It is aimed at reducing inventory levels and distribution lead times by creating a seamless flow of products from suppliers to customers. Prior supply chain literature has argued that creating such a seamless product flows requires a holistic view on cross‐docking management, aimed at synchronizing cross‐docking operations at the distribution center with its inbound and outbound network logistics. This paper provides an in‐depth case study illustrating how cross‐docking operations can be managed more holistically in a retail distribution context. A discrete event simulation model has been developed to understand and improve the cross‐docking operations of a large grocery retailer in the Netherlands. The model is used to quantitatively evaluate two proposed changes that exploit opportunities in the design and control of the retailer's distribution network. An extensive real‐world data set is used as input to the model. Overall, the case and simulation results show that a holistic cross‐docking management approach can indeed improve system‐wide performance, which further stresses the importance of making cross‐dock operational decisions making and network decisions together.     

SCALE‐INDEPENDENT TECHNOLOGICAL‐KNOWLEDGE BIAS,HUMAN‐CAPITAL ACCUMULATION AND GENDER INEQUALITY

We present a dynamic, non‐scale general‐equilibrium model with female and male human capital where Schumpeterian R&D and human‐capital accumulation are the engines of growth and gender wage inequality. Gender wage inequality is encouraged by changes in relative supply and relative demand of both human‐capital types. Relative supply restricts the levels of employed human capital. Relative demand is affected by the technological‐knowledge bias, which is driven by the price channel and is affected by human‐capital accumulation. In particular, the female‐premium per unit of human capital and per worker increases when the observed discrimination against women decreases or is removed.     

Futures hedging under mark‐to‐market risk

This article introduces mark‐to‐market risk into the conventional futures hedging framework. It is shown that a hedger concerned with maximum daily loss will considerably reduce his futures position when the risk is taken into account. In case of a moderate hedge horizon, the hedger will hedge approximately 80% of his spot position. The effect of mark‐to‐market risk decreases very slowly as the hedge horizon increases. If the hedger is concerned with average daily loss, the effect is minimal for a moderate hedge horizon. © 2003 Wiley Periodicals, Inc. Jrl Fut Mark 23:389–398, 2003     

Attachment orientations in business‐to‐business relationships

Attachment theory has produced an impressive body of evidence for explaining individual differences in personal relationship behavior. The current study examines whether attachment theory can be fruitfully extended to business‐to‐business relationships. Hypotheses about the impact of personal attachment orientations on key relationship constructs are developed and empirically tested in two business‐to‐business relationships. Customers who are securely attached in their personal relationships with their romantic partners experience higher levels of satisfaction, trust, and repurchase intent in their business‐to‐business relationships. In addition, an attachment scale that is specifically tailored for a business‐to‐business context is developed. Two dimensions of business attachment are empirically derived: secure business attachment measures the ability and willingness to rely on the business partner, and close business attachment measures the desire to develop personal bonds with a business partner or its employees. The two business attachment dimensions can be used to segment customers with respect to their intrinsic retainability and their preference for personal bonding with their business partners. © 2009 Wiley Periodicals, Inc.