Anticounterfeiting Strategies and Their Influence on Attitudes of Different Counterfeit Consumer Types

This article reports the findings of two studies that were designed to determine the effectiveness of several anticounterfeiting strategies on the counterfeit purchasing behavior of the participants, through a mixed methods research approach. In Study 1, in‐depth interviews were conducted with 50 consumers of counterfeit brands in order to investigate their attitudes. Drawing on the results, which revealed four different consumer types (struggle, spurious, indifferent, and liberated), Study 2 was undertaken with a further 128 consumers (32 from each type) to further define each group's type and identify the best anticounterfeit strategies suited to each. The findings suggest that counterfeit purchasing may be reduced if a specific strategy is adapted to suit each typology. Overall, positive rather than negative strategies were found to be more effective for the struggle and spurious consumers compared with indifferent and liberated consumers. The findings also reveal that the acquisition of affordable genuine merchandise may be the key to preventing counterfeit purchasing.     

Volatility of capital flows and financial liberalization: Do specific flows respond differently?

This paper examines the volatility of capital flows following the liberalization of financial markets. Utilizing a panel data set of overlapping data, the paper focuses on the response of foreign direct investment, portfolio flows, and other debt flows to financial liberalization. The financial liberalization variable comes from the chronology and index developed by Kaminsky and Schmukler [Kaminsky, G.L. and Schmukler, S.L., 2003, Short-run pain, long-run gain: The effects of financial liberalization, IMF Working Paper WP/03/34.]. Different types of capital flows are found to respond differently to financial liberalization. Surprisingly, portfolio flows appear to show little response to capital liberalization while foreign direct investment flows show significant increases in volatility, particularly for the emerging markets considered.     

Caribbean cruise tourism : A business of transnational partnerships

The cruise industry has grown dramatically during the 1980s to the extent that over four million North Americans will have opted for a cruise holiday in 1990. The Caribbean is perfectly placed to take advantage of this market but the governments concerned have not supported tourism development appropriate to the transnational cruise line operators. Cruise ship arrivals in the Caribbean are growing faster than stopover arrivals so it is vital that the various Caribbean governments cooperate with the transnational cruise line operators in planning and providing the necessary infrastructure to tempt the cruise ship arrivals to part with their dollars at the Caribbean destinations.     

Correcting for bias in retrospective data

When panel data are not available, retrospective data are used in the estimation of dynamic choice models. However, retrospective data are not reliable. Previous studies of voting choices, for example, have shown that respondents misreport their past choices in order to appear more consistent with their current choice. Such retrospective bias leads to inconsistent estimates, especially when there is state dependence in choices. Specifically, observed persistence in retrospective data may be due to (a) true state dependence, (b) unobserved heterogeneity, and (c) retrospective bias in reporting previous choices. Whereas Heckman in his 1981 study deals with (a) and (b), we introduce a method to estimate true state dependence while accounting for both unobserved heterogeneity and retrospective reporting bias. Our method is based on modeling the reporting behavior and integrating it into the estimation. The identification strategy is based on the correlation between the reported previous choices and current exogenous variables. Using data on Israeli voters, we find that the probability that a respondent whose vote intention in 1991 differed from his or her past voting choices would lie about their past choices is 0.23. Copyright © 2007 John Wiley & Sons, Ltd.     

Quadratic risk domination of restricted least squares estimators via Stein-ruled auxiliary constraints

This paper develops an estimator that under the standard assumption of the General Linear Model, including normality of disturbances, can be designed to dominate the Restricted Least Squares estimator in quadratic risk under very general conditions. The domination is achieved for any choice of symmetric positive definite weighting matrix used in defining the quadratic risk function, regardless of the correctness of the constraints used to define the restricted least squares estimator. The general problem conditions under which the estimator exists, and the risk behavior of the estimator over the parameter space are identified.     

Tax management strategies with multiple risky assets

We study the consumption-portfolio problem in a setting with capital gain taxes and multiple risky stocks to understand how short selling influences portfolio choice with a shorting-the-box restriction. Our analysis uncovers a novel trading flexibility strategy whereby, to minimize future tax-induced trading costs, the investor optimally shorts one of the stocks (or equivalently, buys put options) even when no stock has an embedded gain. Alternatively, an imperfect form of shorting the box can reduce aggregate equity exposure ex post. Given these two short selling strategies, it is common for an unconstrained investor to short some equity while a constrained investor holds a positive investment in all stocks. With no shorting, the benefit of trading separately in multiple stocks is not economically significant.     

Globalization, Financial Volatility and Monetary Policy

Recently it has often been claimed that globalization eases the job of central banks as it helps to tame inflation. This is used to argue that central banks (particularly the ECB, referring to the objectives as laid down in the EU Treaty) could or should reduce their efforts in the fight against inflation in favor of supporting the general economic policies of the governments. This paper takes a critical look at this argument, pointing to the structural changes associated with globalization and to the corresponding increase in uncertainty by which the central banks are affected. As an example of this, the increase in financial volatility is analyzed and explained as the result of optimal portfolio allocation, and its implications for monetary policy are discussed.