Odds-setting efficiency in gambling markets: Evidence from the PGA TOUR

This paper describes the gambling market for PGA TOUR events for the 2002 season. The extent to which the odds predict the outcome is examined, illustrating how much information is captured in the odds and whether there are any identifiable biases in the odds. The overall implied profit to the casino is calculated as well as the returns to several naive betting strategies. By splitting the sample based on whether or not Tiger Woods is in the tournament, a “Tiger Woods effect” or a “thin market versus thick market effect” can be examined. On the whole, efficient markets propositions hold up, but the overwhelming share of the variation in the tournament outcome remains unexplained.     

Determining of threat perceptions affecting direction of the US defense expenditures by using ordinal regression models

The article examines whether the US threat perceptions defined in terms of federal government national defense outlays in billions of constant (FY 2000) dollars change along with periodical changes in international politics between 1945 and 2007. Three different models affecting direction of the US defense expenditures are developed. The first model are estimated by using five link functions even though results of only two of them, complementary log–log and cauchit, are presented. As complementary log–log produced the best results, others models are predicted by using only this function. The parameter estimates of complementary log–log function for the first model indicate that four of these variables (Ford, Carter, Reagan and Bush Sr.) out of eleven are significant in the category of presidents. “Truman Docrtrine/Cominform”, “Korean War”, “Vietnam War”, and “Invasion of Iraq” also seem to be the important independent variables on empirical grounds for the first model. While “Party”, “Invasion of Iraq”, “Vietnam War”, “Korean War”, and “Cuban Missile Crisis” constitute the important independent variables on empirical grounds for the second model, “Korean War”, “Vietnam War”, “Invasion of Iraq”, “Truman Docrtrine/Cominform”, “The Cold War and New World Order”, and “Cuban Missile Crisis” are important independent variables on empirical grounds for the third model. Estimations based on these three models therefore suggest that aforementioned independent variables do indeed have effect on the US defense expenditures.     

OSHA inspections: Process and outcomes in programmed inspections versus complaint-investigated inspections

Inspections are an important tool for enforcing OSHA regulations. As with any enforcement procedure, OSHA inspections are an effective tool to the extent that they are conducted in a consistent manner. In this study we compared 3,000 inspections randomly initiated by OSHA with 3,000 inspections conducted by OSHA in response to an employee complaint. Significant differences in both process and outcome variables were found between the two types of inspections. We discuss the findings in terms of the “threat effect” as a tool for enforcement of OSHA safety standards.     

The Use of Mixed Methods Models and Designs in the Human Sciences: Problems and Prospects

The article explores some of the emerging issues in the newly developing area of Mixed Methods (MM) research. Two of these issues concern the possibility of whether MM can provide for both “diverse” and “severe” testing. Based on a model of Placeholder Effects and utilizing an example of current empirical research, it is concluded that certain varieties of MM are potentially more robust than others in fulfilling the diverse and severe criteria. It is also argued that MM must concern itself with formulating “procedural rules” which guide the researcher in choosing and applying appropriate strategies for specific research problems.     

An examination of estimation and specification error biases in estimates of option prices generated by Black-Scholes and Cox-Ross models

In this paper the author identifies and examines the estimation and specification error biases of the Black-Scholes and Cox-Ross models by using both analytical and monte-carlo simulation techniques. Several hypotheses are tested. The central hypothesis is whether or not the estimation error bias in the correctly specified model is large enough to make researchers mistakenly pick the “wrong” model as being the “correct” one. The findings in this study support this hypothesis. It is shown that there is a bias toward accepting the Cox-Ross model as correct, even if the Black-Scholes is assumed to be the true model for pricing options.     

Are day traders bias free?—evidence from internet stock message boards

This study addresses the issue whether day traders’ recommendations on stocks are biasfree. We test whether on average day traders’ “Hold” sentiment is skewed and different from a neutral opinion. Posted messages and mature text classifier technology provide a novel approach to analyze the content of these “Hold” sentiment postings among day traders. Findings indicate that the self-disclosed “Hold” sentiment conveys an optimistic opinion and significantly differs from neutral. These results help both investors and researchers to better understand day traders’ psychology and behaviors when they recommend stocks. The paper also provides insight into the construction of future online sentiment indexes based on stock message boards.     

Does sentiment explain consumption?

This paper examines whether “consumer sentiment,” an often neglected variable, explains consumption expenditures for Australia. Since household consumption accounts for more than 60 percent of U.S. GDP and a similar proportion in other developed economies, fluctuations in consumption may result in significant changes in the state of the economy. Therefore, we develop a theoretical model that suggests why consumer sentiment may influence consumption expenditures. Furthermore, using a carefully specified consumption function as the “test-bed,” we consider empirically whether there is an independent impact of sentiment on consumption. Our results suggest that consumer sentiment does influence variations in consumption expenditure.     

The pricing of callable preferred stock

In this study, the authors use both the Black/Scholes European option model and the Barone-Adesi/Whaley American option model to estimate call option values implicit in seasoned callable preferred stock issues. Consistent with the finding that call features increase bond yields, a significant relationship is found between estimated option values and discounts of these securities’ market prices from their estimated income values. However, the size of the discount is only a fraction of what would be predicted by the American option model. Specifically, the market does not appear to take the “early exercise premium” into account. Furthermore, this discount seems to be isolated to in-the-money call features that have evolved to their final call price. Thus, incorporation of a call feature into a security’s indentures, with a deferment period and an initial premium call price, appears to represent a pure gain for the issuing corporation.     

Redistribution and individual characteristics

I study a model where personal income is a function of two different groups of individual characteristics, called “talent” and “effort” respectively. The distinction between these two groups is that society has taken the prior decision that the influence of traits from the first group needs to be moderated by any fair redistribution mechanism while differences in income due to traits from the second group must be preserved. I present two solutions that satisfy several intuitive properties of fairness and I use these properties to characterize both of them. Received: 29 October 1995 / Accepted: 6 January 1997     

Leisure activity and coping with stress: adolescents as case study

The purpose of this study is to explore the correlation between adolescent participation in leisure activity, its benefits, and coping with stress. Questionnaire surveys and structural equation model (SEM) were used for testing, and the analytical results showed that the model has good fit. The main findings of this study are: (1) youth participation in leisure activity would positively influence benefits of leisure activity; (2) participation in leisure activity has a significant positive correlation to adolescent coping with stress; (3) benefits of leisure activity has a significant positive influence on coping with stress. Research results showed that among participation in leisure activity, “kinetic activity” is the most important element for adolescent choice; among benefits of leisure activity, “enrich the quality of life” and “enhance self-worth” are most emphasized by adolescents. In terms of coping with stress, adolescents generally use “avoidance coping.” According to the research results, it is suggested that under the current social and cultural framework, promotion of adolescent participation in leisure activity can help them increase avoidance coping when faced with stress.     

Causality in qualitative and quantitative research

We are flooded with a wave of writings on causality in the social sciences during the last decades. The same holds for the relationship between quantitative and qualitative research in the social sciences. An enormous amount of texts appears on (causality in) qualitative research, mostly in a controversy with quantitative research. These writings induced us to develop the thesis of “unity in diversity”, i.e., that there is no difference “in principle” between causality in qualitative and quantitative research, because both are supported by what I will call an “experimental logic”. In developing this thesis a plea is being made for going back to the sources. A historical overview of theories of causality is presented, which develops into two prominent views: INUS-causation and causal realism. A historical framework is also outlined for the opposition between quantitative and qualitative research, in which French positivism and British empiricism are opposed to German neo-kantianism and neo-hegelianism. After having developed the thesis of “unity in diversity” for this historical framework, the same is being done for the recent literature: “mixed methods research”, the book DSI of KKV, the reactions of David Collier and “QCA” of Charles Ragin. At the end the question of small-n research and the case n = 1 is examined.     

Does government ideology influence budget composition? Empirical evidence from OECD countries

This paper examines whether government ideology has influenced the allocation of public expenditures in OECD countries. I analyze two datasets that report different expenditure categories and cover the time periods 1970–1997 and 1990–2006, respectively. The results suggest that government ideology has had a rather weak influence on the composition of governments’ budgets. Leftist governments, however, increased spending on “Public Services” in the period 1970–1997 and on “Education” in the period 1990–2006. These findings imply, first, that government ideology hardly influenced budgetary affairs in the last decades, and thus, if ideology plays a role at all, it influences non-budgetary affairs. Second, education has become an important expenditure category for leftist parties to signal their political visions to voters belonging to all societal groups.     

Impact of relational norms, supplier development and trust on supplier performance

Supplier relationship management and supplier development initiatives assume a fundamental role in enterprise supply chain management. An important aspect of effective supplier relationship management is the role of trust. This paper seeks to understand whether supplier relationship management or supplier development initiative should be emphasized as a firm strives to achieve superior supplier performance. The analysis and discussion draws upon sourcing strategy literature and is based on empirical survey-data of mid to upper level managers with responsibility for supply management initiatives in their respective organizations in Denmark and in the USA. It examines the interrelationships among “relational norms”, “trust”, “supplier development initiatives” and ensuing “supplier performance”. The data analysis shows that firms must emphasize relation and trust building activities before investing in supplier development initiative. Supplier perception audits must be routinely performed to gauge the level of trust and strength of relational norms.     

Networks and geography in the economics of knowledge flows

This paper reviews the literature dealing with the economic geography of knowledge flows by summarising the most relevant problems and open questions that, according to the authors’ view, have been dealt in the past and should be dealt in the future by network analysis in order to model, understand and measure the structure and dynamics of knowledge flows. The interaction between “networks” and “geography” elements within a theoretical, methodological and empirical perspective is discussed throughout the paper by making reference to previous works by the authors and to the established literature. Thus, these references, far from being complete and exhaustive, are instrumental to the achievement of the paper’s goal: to demonstrate that “networks” and “geography” are the necessary ingredients for every study of the innovative process at any level of analysis, from individual agent to institution/organization, from the regional to the national and international level.     

Organizational governance and the grievance process: In need of a new model for resolving workplace issues

This article begins by providing insights from the research literature on the union and nonunion grievance processes in the United States. We then take a look at the status of “voice” in the American workplace and identify both inherent and practical implementation problems in providing employee “voice” regarding workplace rules. Finally, we lay out the elements of a viable system that would best meet the criteria for procedural and substantive due process in the employment relationship.     

Social Distance,Respondent Cooperation and Item Nonresponse in Sex Survey

This paper examines the ways in which the number of item nonresponses is determined by social distance and/or interview rapport, with a focus on responses of “refusal” and “don’t know”, implying the respondent’s lack of willingness and ability to provide substantive responses to sensitive questions. The data analyzed were from 39 self- administered questions concerning sexual attitudes and behaviors in the 2002 Taiwan Social Change Survey for module “Family and Changing Gender Role”. Poisson Regression in 2-level Hierarchical Linear Model was employed to enhance the accuracy of the analysis of the accumulation of “don’t know” and “refusal” responses. The results showed that respondent cooperation significantly decreased the number of both “don’t know” and “refusal” replies. The decrease was not conditioned by any kind of social distance. Age and education distances have respectively negative and positive effect on the number of “don’t know” and “refusal” answers. The married–married interview produced more “don’t know” and “refusal” than other paired interview types. The larger the ethnicity distance is, the more “refusal” appears. The substantial findings imply that the effects of social-distance and rapport (respondent cooperation) on the number of item nonresponses deserve more attention in research on survey methodology. The divergent findings on gender-distance effect and marital-status effect, however, call for replication studies in the future.     

Competitive market equilibrium under asymmetric information

This paper studies the existence of a competitive market equilibrium under asymmetric information. There are two agents involved in the trading of the risky assets: an “informed” trader and an “ordinary” trader. The market is competitive and the ordinary agent can infer the insider information from the price dynamics of the risky assets. The insider information is considered to be the total supply of the risky assets. The definition of market equilibrium is based on the law of supply-demand as described by a rational expectations equilibrium of the Grossman and Stiglitz (Am Econ Rev 70:393–408, 1980) model. We show that equilibrium can be attained by linear dynamics of an admissible price process of the risky assets for a given linear supply dynamics.      

Verbesserung des nicht-randomisierten exakten Testes von R.A. Fisher

Summary The so-called Exact Test of R. A. Fisher for comparing two probabilitiesp ₁ andp ₂ in a Fourfold-Table with small cell frequencies is known as a UMPU-Test. But in practice the test is used in a nonrandomized, often tabulated version. Given a certain level of significanceα it is shown: the critical region of this nonrandomized test, referred to as “Fisher 1”, can be enlarged considerably. For instance for all sample-size-sums up to 20 andα=0.01 the total number of points in the critical regions of “Fisher 1” is 552 whereas the analogous number of the new version “Fisher 2” is 788. The size of tables for “Fisher 2” can be reduced considerably because the main parts of the critical regions can be described by the aid of some Chi-square-test versions. In particular Yates’ continuity-correction turns out to be always conservative in the above mentioned region relative to “Fisher 2” whereas this is not strictly true relative to “Fisher 1”.      

A unified approach to optimal process control

Summary In this paper a unified approach to optimal process control is developed, which leads to relatively simple and rather general objective functions for optimization. These two features “simplicity” and “generality” are the basis for the development of powerful algorithms and nomograms to determine approximately optimal solutions. Research supported by the Deutsche Forschungsgemeinschaft.     

Variance estimation in the change analysis of a linear regression model

We study a “direct test” of Chu and White (1992) proposed for detecting changes in the trend of a linear regression model. The power of this test strongly depends on a suitable estimation of the variance of the error variables involved. We discuss various types of variance estimators and derive their asymptotic properties under the null-hypothesis of “no change” as well as under the alternative of “a change in linear trend”. A small simulation study illustrates the estimators' finite sample behaviour.