Expectations and industry location: a discrete time dynamical analysis

The new economic geography (NEG) aims to explain long-term patterns in the spatial allocation of industrial activities. It stresses that endogenous economic processes may enlarge small historic differences leading to quite different regional patterns—history matters for the long-term geographical distribution of economic activities. A pivotal element is that productive factors move to another region whenever the anticipated remuneration is higher in that region. Given the long-term nature of NEG analyses and the crucial role of expectations, it is astonishing that most of the existing models assume only naïve or myopic expectations. However, a recent stream of the literature in behavioral and experimental economics shows that agents often use expectational heuristics, such as trend extrapolating and trend reverting rules. We introduce such expectations formation hypotheses into a NEG model formulated in discrete time. This modification leads to a system of two nonlinear difference equations (corresponding, in the language of dynamical systems theory, to a 2-dimensional piecewise smooth map) and thus enriches the possible dynamic patterns: with trend extrapolating (reverting) the symmetric equilibrium is less (more) stable; and it may lose stability only via a flip bifurcation (or also via a Neimark–Sacker bifurcation) giving rise to a period-doubling cascade (or also to quasi-periodic orbits). In both cases, complex behavior is possible; multistability, that is, the coexistence of locally stable equilibria, is pervasive; and border-collision bifurcations are also allowed. In this sense, our analysis corroborates some of the basic insights of the NEG.     

Effects of ethnic advertising on consumers of minority and majority groups: the moderating effect of humor

The effects of portrayals of ethnic endorsers in advertising are ambiguous. These portrayals strengthen the ethnic identity of ethnic minority groups, thus leading to positive responses toward the ad. They can lead to negative responses, because these portrayals can be perceived as stereotyped. Humor is a tool that can increase positive effects of identity-building and reduce negative effects of stereotyping. In this study, we investigate how humor moderates the effects of ethnic advertising on consumers from ethnic minority and majority groups. We find that humor supports the effects of traditional portrayals for both groups. Moreover, the effect of traditional portrayals combined with humor is strongest for the minority group. These findings provide evidence for the positive effects of humor in ethnic advertising and thus provide new insights to the stereotyping, ethnic advertising, and humor literature. The findings have practical implications for advertising using ethnic endorsers, humor, or targeted at ethnic minority groups.     

Global and local determinacy in a one-step forward looking New Keynesian model

In this paper we consider a New Keynesian model for optimal monetary policy in a staggered fashion. We provide the relations of a non linear model of general economic equilibrium, implementing a suitable Taylor-type interest rate rule. We characterize the conditions that guarantee local determinacy and explore conditions under which local bifurcations of the target equilibrium may occur. Afterwards, we argue how local determinacy might be associated with global indeterminacy, providing some numerical examples.     

Effect of Diversity of Large Wildlife Species on Financial Benefits to Local Communities in Northwest Namibia

There exist few quantitative assessments of the relationship between biodiversity per se and economic benefits at scales that are relevant for conservation. Similarly, the merits of Community-Based Natural Resource Management programs for both wildlife and people are contested. Here, we harness two databases, on wildlife surveys and financial benefits, to address these issues for communal conservancies in northwest Namibia. We use ordination methods to characterize the diversity and stability of large wildlife assemblages on conservancies, and demonstrate that diversity (but not stability) is an important explanator of conservancy financial benefits. Our results indicate that for this area of Namibia, biodiversity, as represented by large wildlife assemblages, has an important, positive effect on the tangible financial benefits that people derive from conservation programs.     

Do interest groups affect US immigration policy?

While anecdotal evidence suggests that interest groups play a key role in shaping immigration policy, there is no systematic empirical analysis of this issue. In this paper, we construct an industry-level dataset for the United States, by combining information on the number of temporary work visas with data on lobbying activity associated with immigration. We find robust evidence that both pro- and anti-immigration interest groups play a statistically significant and economically relevant role in shaping migration policy across sectors. Barriers to migration are lower in sectors in which business interest groups incur larger lobbying expenditures and higher in sectors where labor unions are more important.     

The impact of mood states and surprise cues on satisfaction

Mood effects have been studied in consumer behavior literature, but prior research investigating the joint impact of mood and surprise on satisfaction is scant. To bridge this gap, this study examines the relationship among these three constructs. We manipulated customers’ pre-consumption mood and provided surprise cues with hypothetical scenarios in a 2 by 2 factorial design in a restaurant setting. The results show that a positive surprise yields high satisfaction without a significant effect from customers’ pre-consumption mood. Conversely, with a negative surprise, customers in a negative pre-consumption mood indicate lower satisfaction than those in a positive mood.     

An analysis of e-business adoption and its impact on relational quality in travel agency–supplier relationships

This study analyzes how managers of retail travel agencies perceive the antecedents and consequences of adopting e-business in their supplier relationships. A comprehensive model integrating its antecedents and relational effects is developed and empirically tested using SEM. The study surveyed 101 travel agents in Spain. Research findings indicate that customer pressure has a strong influence on e-communication practices. E-communication with the travel agency's supplier and the pressure exerted by the sector are the main antecedents for e-procurement. Effects of e-business on relational quality are contradictory. E-procurement influences negatively on trust. Conversely, e-communication has a positive impact on trust, thus having a favorable impact on perceived reciprocity and travel agent's commitment to its supplier. Main findings indicate that the use of the Internet is largely driven by normative pressures, and this coercive power has a detrimental impact on trust. To avoid such negative consequences, perceived reciprocity is a prerequisite for committed supplier relationships.     

Dynamically stable preferences

In the framework of dynamic choice under uncertainty, we define dynamic stability as a combination of two assumptions prevalent in the literature: dynamic consistency and the requirement that updated preferences have the same “structure” as ex ante ones. Dynamic stability also turns out to be a defining characteristic of the multiplier preferences of Hansen and Sargent (2001) [24] within the scope of variational preferences. Generally, for any class of invariant preferences, dynamic stability is shown to be connected to another independent property — consequentialism.