Rothschild-Stiglitz's definition of increasing risk and the relationship between volatility and risk premium

This paper analyzes the relationship between volatility and risk premium under the capital asset pricing model and Rothschild and Stiglitz's [Rothschild, M. and J.E. Stiglitz. (1970) Increasing risk I: a definition. Journal of Economic Theory, 2, 225-243.] definition of increasing risk. Especially examined are the conditions of the widely used assumption of constant correlation, which results in a linear relationship. Though both the above model and definition are widely known and accepted, their compatibility has remained unclear in the literature. According to this paper, they are in harmony with the linear relationship, if the correlation between a stock and the market portfolio is less than 0.7. Otherwise a conflict may arise.     

An active learning strategy for the classroom—“who wants to win … some mini chips ahoy?”

Skillfully presenting technical accounting material has been identified as an important dimension of effective teaching [Issues in Accounting Education (1993) 8(2), 436]. Faculty may more effectively present material by modifying the traditional lecture approach to incorporate visual-based instruction and increase student involvement through active learning exercises. One approach to presenting accounting material more effectively is described in this article. A “Who Wants to Win…?” game, similar to that seen on television, is constructed with the instructor in the role of master of ceremonies and one class member, a group, or the entire class in the role of contestants. The method described can be adapted and used to present a variety of accounting topics. Anecdotal evidence from two very different college classroom settings indicates a high level of student enjoyment, increased class participation, and an increased level of advance preparation on the part of the students. While a significant amount of material is presented in a concise, novel, and effective manner, the game provides a relaxed classroom atmosphere for the students and an enjoyable method of presentation for the instructor.     

A dynamic model of supplier–customer product development collaboration strategies

This study examines transitions between different types of product development collaboration in supplier–customer settings, the events that trigger such transitions, and the emerging requirements for suppliers. The current study contributes to the literature regarding supplier and customer involvement by combining previously discovered types of collaboration into a dynamic model that describes these different types as alternative modes of collaboration that can be implemented in a relationship. Transitions between different types of collaboration are identified in a longitudinal case study. Three of the four transitions identified took place in the same dyad, which demonstrates that it is possible to change the type of collaboration without losing the advantages of a long-term relationship with a customer. The most radical change in collaboration—the change from supplier involvement to customer involvement—involved temporarily discontinuing the original relationship, which indicates that this transition incorporates the highest risk of relationship termination. By offering a dynamic model for product development collaboration, this study is the first to analyze changes between different types of customer–supplier product development collaboration from a supplier's perspective. The dynamic view is important for companies seeking to take advantage of their long-term relationships instead of starting new ones when new requirements for product development collaboration emerge.     

Young British partisans’ and non-voters’ processing of attack election advertising and the implications for marketing politics

Abstract

This article presents an empirical study of young partisans’ and non-voters’ processing of attack ad messages utilised in the 2010 British general election. Expanding understanding of how these messages are processed is important because they can aid electoral and civic engagement, which is declining amongst youth. Currently, there is limited understanding of how youth process these ad messages and how they influence their engagement. We applied motivated reasoning to explore this in a national survey in England with 18- to 22-year-old British first-time voters, with data from 646 respondents presented in this article. Overall, our young partisans and non-voters employed motivated reasoning – (de)selection and critical appraisal – in their ad processing, thereby advancing understanding of how youth process attack election advertising. Concerns surrounding the use of attack election advertising emerge, suggesting the need for greater appraisal of the relevance of marketing in the development of election campaign strategies.     

Risk Management as Passionate Imitation: The Interconnections Among Emotions,Performance Metrics,and Risk in a Global Technology Firm

This paper traces the evolution of risk management practices in a global technology company between 2000 and 2015. We extend recent research that has highlighted the emotional aspects of riskwork. We detail how a passionate interest—‘we can do better at risk management’—emotionally ‘hooked’ the staff in the company's Sourcing Unit. Risk management, emotion, and management controls were intertwined. When top management singled out one of the key metrics clearly as a risk‐related metric for the Sourcing Unit, the employees felt a strong sense of relief, which gave rise to subsequent extensive risk measurement. We also contribute to the more general debate about accounting and its entanglement with emotions. Little is known about the ‘birth’ and the reasons for durability of passionate interests. Following Tarde (1903/2013), such ‘birth’ and endurance can be explained by analyzing how passionate imitation emerges as a result of a series of dislocal events—in our case a fire, new performance metrics, and natural disasters. These events triggered emotions that provided the necessary energy for three forms of passionate imitation: a) ‘we need to imitate our main competitor’ and risk mapping; b) ‘others in the organization are imitating us and our suppliers should imitate us’ and risk measurement; and c) ‘others in the organization (more specifically the Product Development Unit) should imitate us’ and proactive risk avoidance. This passionate imitation helped explain why the sourcing staff continued to be emotionally ‘hooked’ to risk management, that is, how the passionate interest endured and became vested.     

CEO characteristics,firm performance,and corporate political contributions

We investigate if CEO characteristics determine the choice of Political Action Committee (PAC) contributions by firms and if such participation leads to better firm performance. Using a unique, hand‐collected database, we also focus on the identity of the politicians receiving PAC contributions to examine the impact of the value‐relevance of such contributions. Examining data on corporate contributions made to candidates seeking federal office during the 2002, 2004, and 2006 election cycles, we find that CEO dominance and interest alignment influence strategic choices of firms with regards to establishing PACs. Our analysis of value‐relevant contributions shows that firms prefer to donate to politicians representing the state of a firm's headquarters, validating the truth to the adage that all politics is local. However, these targeted political contributions do not have a discernible impact on firm performance.