The Fisher Equation: A Nonlinear Panel Data Approach

This article reinvestigates the Fisher equation. Using the panel smooth transition regression (PSTR) model, it was found that there is a significant regime-switching effect concerning the impact of inflation on interest rates. Specifically, inflation is found to raise the interest rates and the effect becomes stronger in magnitude with inflation. However, the data do not provide evidence in support of the one-for-one Fisher effect. The evidence is robust to interest rates with different maturities and subsamples.     

Information content of options trading volume for future volatility: Evidence from the Taiwan options market

This study follows the approach of Ni et al. [Ni, S.X., Pan, J., Poteshman, A.M., 2008. Volatility information trading in the option market. Journal of Finance 63, 1059–1091] – based upon the vega-weighted net demand for volatility – to determine whether volatility information exists within the Taiwan options market. Our empirical results show that foreign institutional investors possess the strongest and most direct volatility information, which is realized by the delta-neutral options/futures trades. In addition, a few individual investors (less than 1% of individuals’ trades) might be informed and realize their volatility information using the strangle strategy. Surprisingly, we find no evidence to support the predictive ability of the volatility demand from straddle trades, despite the widespread acknowledgement that such trades are sensitive to volatility.     

Transfer Price Negotiation in the Presence of Unequal Bargaining Power: The Effect of a Peer Evaluation Scheme on Inter-divisional Profit Distribution

This study examines how managers balance economic incentives and inter-divisional equity considerations during transfer price negotiations. Our experiment shows that both buyers and sellers are willing to give up a significant amount of their profits to pursue a more equitable outcome (one that results in greater inter-divisional profit equalisation). We also find that incorporating peer evaluation schemes into negotiators' formal incentive plans has both economic and social-psychological impacts on negotiation behaviour, resulting in even greater inter-divisional profit equalisation. While this outcome may seem 'fairer' to the individual managers, from the firms' perspective profit equalisation can obscure divisional performance, potentially leading to resource allocation inefficiencies.     

The effects of landscape fascination on subjective well-being and revisit intention: Evidence from agritourism destinations

This study adopted the reasonable person model (RPM) in the context of agritourism to identify tourists' preferences for features of agricultural landscapes; to examine the effects of agritourism landscape's fascination on subjective well-being and destination attachment, which in turn influence tourists' loyal behaviors; and to investigate the moderating effects of farm types. The quantitative and qualitative approaches were combined to obtain 1118 usable samples. The results validated the RPM by identifying the predictive power of landscape fascination, subjective well-being, and destination attachment on tourists' destination loyalty. Managerial implications for enhancing visitors' retentions in Taiwan were discussed.     

REDUCING RECOMMENDATION INEQUALITY VIA TWO-SIDED MATCHING: A FIELD EXPERIMENT OF ONLINE DATING

Leading dating platforms usually recommend only a small fraction of users based on users' popularity and similarity, leading to recommendation inequality. We use a stylized matching model from economics to modify existing algorithms to reduce inequality. We evaluate the proposed method through a large-scale field experiment on a dating platform. Experiment results suggest that our recommender reduces inequality, improves predictive accuracy, and leads to substantially more matched couples than other competing algorithms.     

Does office size matter in client acceptance decisions? Evidence from big 4 accounting firms

Review of Quantitative Finance and Accounting - This study examines whether audit firm office size affects auditors’ risk tolerance in making client acceptance decisions. Analyzing publicly...