The Valuation of Contingent Claims under Portfolio Constraints: Reservation Buying and Selling Prices

With constrained portfolios contingent claims do not generally havea unique price that rules out arbitrage opportunities.Earlier studies have demonstratedthat when there are constraints on the hedge portfolio,a no-arbitrage price interval for any contingent claim exists.I consider the more realistic case where the constraints are imposed on the total portfolio of each investor and define reservation buying and selling prices for contingent claims. I derive propertiesof these prices, show how they can be computed numerically, and study two simple examples in which the reservation prices and the corresponding hedging strategies are compared to the Black–Scholes setting.     

Electronic monitoring at work: The role of attitudes,functions, and perceived control for the acceptance of tracking technologies

Organisations increasingly adopt tracking technologies that allow managers to continuously collect highly detailed records of employee, performance, and health. On the basis of the theory of planned behaviour, we aim to identify attitudes, functions of monitoring, and control perceptions that should strengthen or lower employees' acceptance of these technologies. Our experimental vignette study among 800 respondents in Germany reveals that acceptance is more likely if employees have positive attitudes towards surveillance in general and towards monitoring in private life and if the technologies enhance labour productivity. The tendency to reject the technology increases if it is to be used for monitoring health and performance. The results indicate that these new technologies will not be accepted unconditionally and may be subject to bargaining and conflicts. In the implementation process, human resources departments will have to take account of employee interests and well‐being, which in turn may improve acceptance and performance.     

Wage Cyclicality Under Different Regimes of Industrial Relations

We analyze the effect of collective wage agreements and of works councils on the cyclicality of real wages. Using employer–employee data for western Germany (1995–2004), we find that wage adjustments to positive and negative shocks are generally not symmetric. Wage growth increases in all industrial relations regimes when unemployment is falling, but this inverse relationship is weaker when unemployment is rising. Moreover, in plants with individual‐level bargaining, wages do not adjust at all to rising unemployment. Works councils increase wage growth only in firms covered by sectoral agreements, but they do not affect the cyclicality of wages.     

Applying the door-in-the-face compliance technique to retailing

The door-in-the-face (DITF) approach, a sequential compliance technique in which a large request is followed by a more moderate request, has been shown to increase compliance in a variety of non-business situations. The aim of this study is to investigate whether the DITF technique could also be used to increase sales in a retailing context. A field experiment outside an alpine hut was conducted. A total of 375 consumers participated in the experiment. As they passed by the entrance to the mountain hut, they were approached by an experimenter who invited them to buy some home-made cheese. In the experimental groups the DITF technique was used by the salesperson. The results show that the DITF technique can lead to a significant increase in the number of consumers making a purchase. Furthermore, it was found that this compliance technique is even more effective when it is used by a highly credible seller and when the seller points out that the more moderate request constitutes a concession. The large effect of the DITF intervention (the number of consumers making a purchase increased 15 to 40 percentage points over the control group) suggests that this technique could be used successfully in retailing.     

Establishment exits in Germany: the role of size and age

Using comprehensive data for West Germany, this paper investigates the determinants of establishment exit. We find that between 1975 and 2006 the average exit rate has risen considerably. In order to test various “liabilities” of establishment survival identified in the literature, we analyzed the impact of establishment size and put a special focus on differences between young and mature establishments. Our empirical analysis shows that the mortality risk falls with establishment size, which confirms the liability of smallness. The probability of exit is substantially higher for young establishments which are not more than 5 years old, thus confirming the liability of newness. There also exists a liability of aging since exit rates first decline over time, reaching a minimum at ages 15–18, and then rise again somewhat. The determinants of exit differ substantially between young and mature establishments, suggesting that young establishments are more vulnerable in a number of ways.     

A diagnostic approach to intra-metropolitan spatial targeting: Evidence from Cape Town,South Africa

This article ascribes poor returns from place-based economic policy to prevailing spatial norms and causal assumptions which continue to influence its deployment across South African cities. By elevating the local over the systemic as the cause of and solution to urban problems, spatial targeting in the telescopic mould gives rise to three forms of spatial bias which lock in suboptimal local outcomes and gradually undermine the resilience of the urban system. Place-based policy should instead be guided by a systemic and relational evaluation of local economic potentiality supported by data-driven planning tools. The article introduces one such tool developed by the City of Cape Town, focusing on its theoretical basis, initial findings and implications for intervention. We find that the tool represents a robust platform for policy-makers to make targeting decisions that are more evidence led and hence less arbitrary.     

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