Servicers and Mortgage‐Backed Securities Default: Theory and Evidence

We study conflicting incentives of the master and special servicers in handling troubled loans in a Commercial Mortgage‐Backed Securities deal and how the frictions between the interests of the two servicers might be diminished if the master and special servicing rights are held by the same firm. We show that concentrating both servicing rights in one firm reduces the likelihood that a defaulted loan terminates in foreclosure.     

Form or substance: the role of business plans in venture capital decision making

We explore a well‐known instance of fast decision making under high uncertainty, venture capital (VC) opportunity screening. We analyze a sample of 722 funding requests submitted to an American VC firm and evaluate the influence of the form of the submission and content of business planning documents on VC funding decisions. We improve on prior literature by a) using a large sample of known representativeness, b) relating request characteristics to actual VC decisions, and c) developing an inferential logic that takes account of the multiple sources of information to which VCs have access. We find that the presence of planning documents and some information contained therein are weakly associated with VC funding decisions. Based on our inferential strategy, we find that this information is learned independently of its inclusion in the business planning documents. Copyright © 2009 John Wiley & Sons, Ltd.     

Cultural Change and Marketing

ABSTRACT

The results of this study suggest that marketing strategies need to be adjusted to changing cultures. Culture affects marketing decisions regarding product, price, promotion and place (the 4 Ps). Many marketing studies have been reported based on Hofstede's seminal work on national culture (1980). Marketing managers need to be cautious about assuming the validity of the Anglo cluster equating the cultures of the United States (U.S.) and Canada. We should recognize that national cultures are changing in the U.S., Canada and Mexico, as well as most other countries in the world. Our findings for a very recent sample of people attending executive and MBA programs would seem to apply to the upwardly-mobile business class. Contrary to the ubiquitous Hofstede data found in textbooks, we found no significant differences in Power Distance between the U.S., Mexico and Canada. Our findings regarding differences in Uncertainty Avoidance show that Mexico did not have a significantly higher mean than the U.S., but that the U.S. had a higher mean than Canada. The U.S. and Canada did not differ significantly on Individualism/Collectivism. Our results suggest that caution should be taken in automatically assuming cultural parity between the U.S. and Canada and that established cultural positions between the North American Free Trade Agreement (NAFTA) member nations may be changing.     

Host community attitudes toward tourism and cultural tourism development: the case of the Lewes District,southern England

Increasingly research is being conducted on host community attitudes toward tourism. However, few studies have been conducted at a regional level and none have examined the attitudes of the host community towards both tourism and cultural tourism development. This paper outlines a study conducted in the Lewes District of southern England and notes that although residents are generally supportive of tourism development and cultural tourism development, there are differences in opinion concerning the perceived economic and social benefits. In particular, levels of income and proximity to the tourist centre were major influencing factors. Conclusions and recommendations are made concerning the need for tourism planners to distribute the benefits more widely and to engage residents from different socio‐economic groups and localities in tourism planning and development activities. Copyright © 2006 John Wiley & Sons, Ltd.     

‘More is different’, exaptation and uncertainty: three foundational concepts for a complexity theory of innovation

Universities are engaging in more licensing and patenting activities than ever before, and the amount of research funded by industry is increasing. Academics’ commercialization activities may inhibit traditional academic scholarship. If the output of such scholarship is an important input into technological innovation and economic growth, then such an inhibition would be cause for concern. We introduce new instruments and techniques and demonstrate them using a novel panel dataset of academic electrical engineers from Stanford University. We find no evidence that engaging in inventive activity reduces the quantity of scientific output and some evidence that it increases its quality.     

Investigating the Memorable Experiences of the Senior Travel Market: An Examination of the Reminiscence Bump

The importance of the senior travel market has been well-recognized by tourism marketers and researchers. While academic studies have begun to examine the psychological aspects of senior travelers, more progress must be made to investigate the psychology of memory, particularly with respect to the reminiscence bump, behind the nature of their memorable experiences (MEs). In-depth interviews with 42 respondents revealed five characteristics: identity formation, family milestones, relationship development, nostalgia reenactment, and freedom pursuits. Finally, the practical implications of this study are discussed and several avenues for future research are proposed.     

Valuing the prevention of elder abuse

We develop a framework for valuing cases of serious elder abuse. We use the preferences of the elderly who are abused, the victims, to help identify: what offenses are of concern, the seriousness of any particular offense and the value of preventing any particular offense. The variable revealing the valuations is the victim’s willingness to prosecute in New York City police complaint reports. Using our framework we found that it took a loss of $38 462 in order to be classed as a serious financial offense. With this monetary magnitude as a benchmark we were able to value nonfinancial serious offenses at up to $50 000 per offense.     

Residential Mortgage Default: The Roles of House Price Volatility, Euphoria and the Borrower’s Put Option

House price volatility; lender and borrower perception of price trends, loan and property features; and the borrower’s put option are integrated in a model of residential mortgage default. These dimensions of the default problem have, to our knowledge, not previously been considered altogether within the same investigation framework. We rely on a sample of individual mortgage loans for 20 counties in Florida, over the period 2001 through 2008, third quarter, with housing price performance obtained from repeat sales analysis of individual transactions. The results from the analysis strongly confirm the significance of the borrower’s put as an operative factor in default. At the same time, the results provide convincing evidence that the experience in Florida is in part driven by lenders and purchasers exhibiting euphoric behavior such that in markets with higher price appreciation there is a willingness to accept recent prior performance as an indicator of future risk. This connection illustrates a familiar moral hazard in the housing market due to the limited information about future prices.