Pricing goods for retailers: A new approach

In the retail sector, pricing goods is usually based on practitioner's experiences. Most of the time, the selling price is obtained by multiplying the buying price by an exogenous multiplier. However, There is no particular scientific procedure to determine such a multiplier except from the Lerner index, which is applicable only if the price elasticity of demand is inferior to −1. This paper generalizes the Lerner index to both elastic and inelastic goods by proposing an original model to determine the optimal markup for both static and intertemporal markets no matter what the price elasticity is. Finally, the paper considers the case of the social planner.     

The impact of private hospital insurance on the utilization of hospital care in Australia

We use the Australian National Health Survey to estimate the impact of private hospital insurance on the propensity for hospitalization as a private patient. We account for the potential endogeneity of supplementary private hospital insurance purchases and calculate moral hazard based on a difference-of-means estimator. We decompose the moral hazard estimate into a diversion component that is due to an insurance-induced substitution away from public patient care towards private patient care, and an expansion component that measures a pure insurance-induced increase in the propensity to seek private patient care. Our results suggest that on average, private hospital insurance causes a sizable and significant increase in the likelihood of hospital admission as a private patient. However, there is little evidence of an expansion effect; the treatment effect of private hospital insurance on private patient care is driven almost entirely by the substitution away from public patient care towards private patient care. We discuss the implications for policies that aim to expand supplementary private insurance coverage for the purpose of reducing excess demand on the public healthcare system.     

Price return autocorrelation and predictability in agent-based models of financial markets

We demonstrate that minority mechanisms arise in the dynamics of markets because of price impact; accordingly the relative importance of minority and delayed majority mechanisms depends on the frequency of trading. We then use mixed Majority/Minority Games to illustrate that a vanishing price return autocorrelation function does not necessarily imply market efficiency. On the contrary, we stress that crucial differences might be present between correlations measured conditionally and unconditionally on external patterns in such models.     

Extreme dependence for multivariate data

This article proposes a generalized notion of extreme multivariate dependence between two random vectors which relies on the extremality of the cross-covariance matrix between these two vectors. Using a partial ordering on the cross-covariance matrices, we also generalize the notion of positive upper dependence. We then propose a means to quantify the strength of the dependence between two given multivariate series and to increase this strength while preserving the marginal distributions. This allows for the design of stress-tests of the dependence between two sets of financial variables that can be useful in portfolio management or derivatives pricing.     

Hedging Index Options With Few Assets1

We consider hedging strategies against contingent claims depending on a large number of assets (typically options on an index). We introduce strategies involving a limited number of assets and give explicit formulae to characterize optimal strategies. Numerical methods to compute these formulae are also discussed.     

Time‐varying market price of risk in the crude oil futures market

In this study, a three‐factor model of crude oil prices is estimated, which incorporates a time‐varying market price of risk. The model is able to accurately capture the term structure of futures prices with evidence suggesting that risk premiums in the crude oil market are time‐varying. Using the cross‐section of futures prices, we estimate a time‐series of the market price of risk in the crude oil market implied by the model. We find that the risk premiums in the crude oil market are driven by the same risk factors as equity and bond markets. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark 31:779–807, 2011     

Banks' risk race: A signaling explanation

Many observers argue that one of the major causes of the 2007–2009 recession was the abnormal accumulation of risk by banks. This paper provides a signaling explanation for this race for risk. If banks' returns can be observed while risk cannot, the less efficient banks can hide their type by taking more risks and paying the same returns as the more efficient banks. The latter can signal themselves by taking even higher risks and delivering bigger returns. The game presents several equilibria that are all characterized by excessive risk taking as compared to the perfect information case.     

Good research and bad teaching? A business school tale

The paper presents a simultaneous differential game between rich and poor Business Schools (BS) that yields an equilibrium in which either type of BS may end up with bad teaching and good research, without resorting to informational problems. The necessary condition for this is that the BS’s impatience is smaller than the growth rate of research, which may arise as a result of the school’s lack of vision and ambition in becoming a leading school, or due to the fact that after a given critical mass of human capital is achieved in a BS, research grows fast, making BS managers underuse the available human capital for teaching. Policy implications are discussed.     

What exactly is corporate responsibility towards nature?: Ecological responsibility or management of nature?: A pluri-disciplinary standpoint

The paper analyses the motives and consequences of including environmental protection in good managerial practices driven by a concern of responsible corporate behaviour. Corporate Social Responsibility is increasingly discussed in economics and management studies today.This idea is fairly recent and stems from a philosophical school of thought attributed to Hans Jonas, which says that nature must be preserved for anthropocentric as well as biocentric reasons. In this respect, the consequences that these two visions imply for men and companies will be developed. Corporate leaders often make use of this concept, which finds its origins in philosophy, in order to analyse the normative behaviour of their companies. In this respect we shall favour a jonasian interpretation. Hans Jonas will help us question the fundamental meaning of responsibility. We will attempt to investigate this meaning using CSR. More specifically, this article tries to answer the question: what exactly is corporate responsibility? Is it a mere concept currently in fashion, or is it a new structural approach which could indeed take responsibility into account in so far as long-term environmental preservation is concerned? In order to answer this question, we shall first propose a reading of “stakeholders”. This approach poses several problems when dealing with corporate responsibility regarding the preservation of nature. Secondly, we shall present a more detailed analysis of such corporate social responsibility and the problems it poses. The debate regarding action with the interest of its outcome and action in the interest of the action itself shall be the focal point of our discussion. This article will adopt a narrative and critical methodology. So as to achieve this goal, we propose to critically analyse theoretical paradigms and test them through case studies.     

The cultural characteristic of individualism/collectivism: A comparative study of implications for investment in operations between emerging Asian and industrialized Western countries

This study provides insight into the importance of national culture, investment in operations, and performance in the context of emerging Asian economies with a collectivist orientation, which are compared to industrialized Western nations with an individualist orientation. Hypotheses are developed and tested based on the cultural concept of individualism/collectivism, the theory of performance frontiers, and the extent of economic development. More specifically, data collected from 639 manufacturing plants in nine countries are used to first assess the influence of the cultural trait of individualism/collectivism on the extent of investment in structural assets (specifically: physical and capital-based) and infrastructural assets (specifically: team-based methods and improvement programs). Second, the influence of the extent of economic development on these investment factors is measured. Third, evidence is provided supportive of the theory of performance frontiers, and the nature of resource investments in the context of the cultural construct of individualism/collectivism. And fourth, support is provided for the efficacy of this theory, as well as for its compatibility and association with the resource-based view of the firm. Overall, this study makes important contributions to both theory and practice, and provides evidence for the role played by the cultural characteristic of individualism/collectivism in determining plant level investment outcomes in emerging Asian economies.