Rumors

A Kyle (1985) model with private information diffusion is used to examine the motivation to spread stock tips. An informed investor with limited investment capacity spreads imprecise rumors to an audience of followers. Followers trade on the advice and move the price. Due to the imprecision of the rumor, the price overshoots with positive probability. This gives the rumormonger the opportunity to trade twice: First when she receives information, then when she knows the price to be overshooting. In equilibrium, rumors are informative and both rumormongers and followers increase their profits at the expense of uninformed liquidity traders.     

The biological reserve: The future's last stand

This article addresses the societal and cultural aspects of bioreserves and environmental restoration programmes. It begins with a discussion of bioreserves, then uses the example of a Man and Biosphere (MAB) inspired study of the US Everglades to illustrate how land has been shaped historically by culture and technology. It then demonstrates how current conflicts of values and culture, from both inside and outside the region, from interest groups with both pragmatic and emotional stances, are determining the future of an environment—the Everglades. The article thereby shows how human values and perceptions impact on the development of a sustainable Everglades, using the findings of surveys and public meetings to highlight the interests of the competing communities, ethnic and interest groups involved. If bioreserves are to survive they cannot become alienated from the people in the regions in which they are located.     

The toxic syndrome proceedings in Spain

The author, who has been counsel for the injured in the Spanish olive oil proceedings, reports about the health, political and legal issues of this the greatest tragic event in recent Spanish history. The complexity of the marketing processes has made it difficult to trace the criminal responsibilities of the traders of denatured oil. The civil servants in charge of control and supervision have so far been exempted from the proceedings. The author analyses the legal problems and makes suggestions as to the handling of such cases, including compensation.

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Die spanischen Strafverfahren im Zusammenhang mit dem Olivenölskandal

Zusammenfassung Der Bericht untersucht die Entstehung und Abwicklung des spanischen Strafverfahrens im Olivenölskandal. Im Jahre 1981 sind durch kontaminiertes Speiseöl nahezu 1,000 Menschen — meistens aus ärmeren Schichten herkommend — an schweren Vergiftungen gestorben und weitere tausend schwer erkrankt. Die Behörden haben nur zögerlich auf die größte Gesundheitskatastrophe in der spanischen Geschichte, das sog. síndrome tóxico, reagiert und das Strafverfahren gegen die verantwortlichen Händler erst nach langer Verzögerung, gegen die nachlässigen Beamten der Aufsichtsbehörden noch gar nicht eingeleitet. Die kaum aufklärbaren Wege der Vermarktung des vergifteten Öles machten es schwierig, die für die Opfer verantwortlichen Personen aufzufinden und ihre Schuld nachzuweisen. Der Autor, der als Vertreter der geschädigten Nebenkläger bzw. ihrer Familien das umfangreiche, noch nicht durch ein Urteil abgeschlossene Strafverfahren vor der audencia nacionál in Madrid mehrere Jahre aktiv begleitet hat, untersucht die rechtlichen und tatsächlichen Probleme einer kollektivrechtlichen Bewältigung des síndrome tóxico und macht Verbesserungsvorschläge, auch zur Opferentschädigung. Ein Postskrip berichtet über das nach Fertigstellung am 20. März gefällte Urteil ins Strafverfahren gegen die aceiteros.

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Ignacio de Uriarte Bofarull is a lawyer in Madrid and legal counsel to OCU (Organisación de los consumidores y usuarios). He has represented part of the victims as private attorney in the legal proceedings against the aceiteros. His address: Goya 99, Madrid — 9, Spain.     

Wage rigidity and capital mobility in an optimizing model of a small open economy

Summary This paper formulates an optimizing model of a small open economy with a representative (immortal) household, a firm and a government. The asset menu consists of domestic currency, non-traded bonds and traded bonds. There is a risk premium on traded bonds, which leads to deviations from perfect capital mobility and uncovered interest parity. Taxes are lump-sum, so that finance by bonds and by taxation are equivalent. The model allows for current-account and wealth dynamics. The model assumes either purchasing power parity or imperfect substitution between home and foreign goods and either labour market equilibrium, nominal wage rigidity or real wage rigidity. The steady-state effects of a fiscal contraction, a monetary disinflation and an increase in the world interest rate are discussed. The transient effects of these policies are analysed with the aid of a multiple shooting algorithm.We thank Gerard Staarink for implementing the multiple shooting algorithm used in section 4 and we thank Professors M. Fase and J. Pen for their constructive comments on a previous version of this paper. The paper is a shortened version of discussion paper No. 168 of the Centre for Economic Policy Research, London.     

Operational Research and the environment

The discipline of Operational Research (OR) is primarily concerned with improving the effectiveness and efficiency of decision processes. These processes take place everywhere in society: industry, banking, agriculture, government, politics. Frequent use of mathematical optimization models is typical of OR. Since the early '80s these models are increasingly packaged in a user-friendly way, as Decision Support Systems. In the following we will illustrate how OR can be used to describe and solve a number of environmental problems.     

Trade uncertainty and the two-step procedure: The choice of numeraire and exact indexation

Summary In a small open economy it is optimal to first maximize national income and second choose the best consumption point.The same two-step procedure under (quantitative) uncertainty is suboptimal if one of the goods is used as numéraire. Optimality is restored however, if nominal prices are deflated by the exact price index. Hence there is equivalence between the appropriate two-step procedure and the introduction of a stock market under uncertainty (Diamond 1967) under ideal circumstances.I would like to thank, without implicating, Peter van Bergeijk, Steven Brakman, Willem Buiter, Richard Gigengack, Jean-Marie, Viaene, Casper de Vries and an anonymous referee for useful comments and Angelique van Haasteren and Martijn Herrmann for graphical assistance.     

Probability theory in fuzzy sample spaces

This paper tries to develop a neat and comprehensive probability theory for sample spaces where the events are fuzzy subsets of The investigations are focussed on the discussion how to equip those sample spaces with suitable -algebras and metrics. In the end we can point out a unified concept of random elements in the sample spaces under consideration which is linked with compatible metrics to express random errors. The result is supported by presenting a strong law of large numbers, a central limit theorem and a Glivenko-Cantelli theorem for these kinds of random elements, formulated simultaneously w.r.t. the selected metrics. As a by-product the line of reasoning, which is followed within the paper, enables us to generalize as well as to bring together already known results and concepts from literature.Acknowledgement. The author would like to thank the participants of the 23rd Linz Seminar on Fuzzy Set Theory for the intensive discussion of the paper. Especially he is indebted to Professors Diamond and Höhle whose remarks have helped to get deeper insights into the subject. Additionally, the author is grateful to one anonymous referee for careful reading and valuable proposals which have led to an improvement of the first draft.This paper was presented at the 23rd Linz Seminar on Fuzzy Set Theory, Linz, Austria, February 5–9, 2002.     

Inter-market competition for exchange traded funds

We examine how the different mix of informed and liquidity trading in the market for ETFs affects the nature of inter-market competition. We find that both the characteristics of the securities and the structures of the competing markets jointly determine the nature of inter-market competition. Given the superior execution quality on the ECNs and the low adverse selection costs in the ETF market, anonymous market such as the ECNs, attract both liquidity and informed traders. We also find that markets compete in a subset of ETFs. In addition, we find that quotebased competition is prevalent in the market for ETFs.     

Environmental uncertainty, supply chain relationship quality and performance

Environmental uncertainty is a fact of life in today's supply chains. In this paper we develop a model of environmental uncertainty, supply chain (SC) relationship quality and SC performance. We use data from the electronics sector in Ireland to test our model. Our results provide mixed support for the model, with the moderating role of both demand and supply uncertainty being supported, but technological uncertainty not supported. We reflect on these findings and suggest a research agenda based on our results.     

Nash-equilibria in a heterogeneous oligopoly with fuzzy information

We consider a model of an oligopolistic market with heterogeneous firms and products where neither the cost nor the demand functions are common knowledge. Instead, each firm only has some vague ideas about the price strategies adopted by its competitors which is modelled by a fuzzy set. In analogy to the notion of an "equilibrium of actions and beliefs" we define and characterize a generalized Nash-equilibrium and show its existence under general conditions. Furthermore, the impact of the fuzzy information on the equilibrium outcome is analyzed by means of a comparative static analysis within a particular model framework.Received: 28 May 2002, Accepted: 25 December 2002, JEL Classification: D43, D80, L13We wish to thank Bernhard F. Arnold, the editor Murat Sertel , and two anonymous referees for helpful comments. Of course, we are responsible for all remaining errors.