Household behavior and individual autonomy: an extended Lindahl mechanism

We present a comprehensive model of household economic decision covering both full cooperation and noncooperation as well as semi-cooperative cases, varying with income distribution and a parameter vector $\theta $ representing degrees of individual autonomy with respect to the public goods. In this model, the concept of “household $\theta $ -equilibrium” is introduced through the reformulation of the Lindahl equilibrium for Nash implementation and its extension to semi-cooperation. Existence is proved and some generic properties derived. An example is given to illustrate. An important benefit of this approach is to allow for a compact and unified investigation of the testable (local) restrictions of household demand. A particular decomposition of the pseudo-Slutsky matrix is derived and the testability of the various models discussed.     

Convergence of Euro area inflation rates

We study the behavior of inflation rates among the 12 initial Euro countries in order to test whether and when the group convergence initially dictated by the Maastricht treaty and now by the ECB, occurs. We also assess the impact of events such as the advent of the Euro and the 2008 financial crisis. Due to the small size of the estimation sample, we propose a new procedure that increases the power of panel unit root tests when used to study group-wise convergence. Applying this new procedure to Euro area inflation, we find strong and lasting evidence of convergence among the inflation rates soon after the implementation of the Maastricht treaty and a dramatic decrease in the persistence of the differential after the occurrence of the single currency. After the 2008 crisis, Euro area inflation rates follow the ECB's price stability benchmark, although Greece reports relatively higher inflation.     

On designers’ use of biomimicry tools during the new product development process: an empirical investigation

As technological problems and societal challenges become increasingly complex, designers are urged to recombine knowledge from different sources in order to innovate. In this article we question how nature may be the key source of inspiration and whether it can impact the new product development (NPD) process. We shed new light on whether designers and researchers are: first, familiar with biomimicry tools; second, aware of their characteristics; third, in favour of using biomimicry tools in the NPD process; and fourth, able to assess the impact of biomimicry tools on the NPD performance. By analysing survey data, counterintuitive results emerged concerning both the awareness of the biomimetic tools and their impact on the NPD innovation outcomes.     

Leaving the market or reducing the coverage? A model-based experimental analysis of the demand for insurance

This study develops a theoretical, and experimental analysis addressing the issue of premium variations on the demand for insurance. Accounting for risk attitudes, our contribution disentangles the decision to buy insurance from the conditional demand (the non-null demand for insurance). Partially validating our theoretical predictions, our experimental results show that, when it has an effect, a non-massive increase in the premium (either in the unit price or the fixed cost) exclusively results in an exit from the insurance market (the risk lovers first, then the risk averters). Moreover, our study highlights a key feature of risk-seeking agents' behavior; they exhibit behavior consistent with gambling and opportunism rather than a lack of interest in insurance.     

How to select an export mode without bias

Managers of startups and small and medium-sized enterprises (SMEs) tend to view subsidiaries as the preferred export mode. Yet this type of organization is associated with a high failure rate. Our in-depth interviews with more than 40 managers show that their bias in favor of foreign sales subsidiaries is rooted in unsubstantiated beliefs about control and the superiority of subsidiaries over other export modes. This article details the faulty reasoning that supports these prejudices and proposes a simple method for selecting more profitable and less risky international entry strategies.     

Business cycles are alive and well

For the Federal Republic of Germany in the period of 1961–1978, ninety percent of the fluctuation in aggregate output about trends is explained by an inventory cycle of about four years and an equipment cycle of about seven years.     

The lack of loan aversion among Canadian high school students

Evidence is presented on the factors that influence take‐up for postsecondary education financing (loans or grants) for high school students. Results show several factors influence the students' decisions about taking loans or grants but the most prominent influence was the price of educational subsidy. A total of 1,248 high school students across Canada participated. Prices for the grants and loans overlapped substantially in order to more clearly distinguish the impact of loan aversion on the decision to take up financial assistance to pursue PSE. The study featured paid experimental decisions (ranging from $25 to $700 in cash and from $500 to $4,000 in education financing), a numeracy assessment, a student survey and a parental telephone survey. The targeted sample included at‐risk high school students: low SES levels, First Nations and first generation students. Participants were marginally sensitive to the form of financing (grant or loan), with no evidence of systematic loan aversion being detected.