Online consumer behaviour and its relationship to website atmospheric induced flow: Insights into online travel agencies in China

Although the study of flow has recently received a lot attention, little is published about what factors controllable by firms influence its formation. Furthermore, there is a lack of knowledge between the relationship of website atmospheric cues and flow experience. Using a stimulus–organism–response framework (S–O–R framework) as the theoretical basis, this study examines the impact of consumer perceptions of website atmospheric cues (informativeness, effectiveness and entertainment) on the development of flow and its subsequent impact on purchase intention and satisfaction. A self-administered online survey was used for data collection through an internet market research firm which randomly selected individuals from its online panel. Our results support the validity of the S–O–R framework in the context of online tourism and indicate that flow fully mediates the three site atmospheric cues with regards to purchase intention and satisfaction with the travel website. This study enhances our understanding on the determinants of online purchase intention and satisfaction as well as on how a proper web atmospheric design alters consumer shopping experience which entices favourable purchase intention and generates satisfaction.     

International buyer behaviour–commitment relationship: An investigation of the empirical link in importing

Drawing on the resource-based view (RBV) of the firm this article examines relationships between knowledge, trust, communication, volatility and sustainable competitive advantage as the exogenous and endogenous variables with importer commitment as the dependent variable. The primary data was gathered from a survey of 224 commercial and industrial firms, headquartered in Bangladesh, coming from a wide cross section of industries. Statistical analysis was carried out using Structural Equation Modelling via AMOS. The study's key findings revealed that all exogenous/endogenous variables had a significant impact on importer commitment. That is, knowledge, trust, communication, volatility and sustainable competitive advantage had a significant direct impact on importer commitment. Additionally, cultural similarity, communication, volatility and supplier opportunism all had a significant indirect impact on importer commitment. This finding makes a significant contribution to the relational side of the RBV.     

Board changes and CEO turnover: The unanticipated effects of the Sarbanes–Oxley Act

The board independence requirements enacted in conjunction with the Sarbanes Oxley Act of 2002 (SOX) provided motivation for firms that were already compliant with the regulations to alter their board structure. We consider actual board changes made by compliant firms and how such changes affect the monitoring efficiency of the boards. We find that the majority of compliant firms (approximately 56%) add independent directors following SOX. However, we find a nontrivial number of firms (approximately 26%) actually decrease the number of independent directors to move closer to the stated 50% requirement. For firms that decrease independence, the CEO turnover performance sensitivity significantly decreases following SOX. We also find that large board independence changes seem to be most detrimental to the monitoring function of the board. Our results highlight that SOX may have had unintended consequences.     

Optimal harvesting of a spatial renewable resource

In this paper we investigate the optimal harvesting of a renewable natural resource. While in most standard approaches the resource is located at a single point, we allow the resource to be distributed spatially. Consequently, an agent who exploits the resource has to travel from one location to another. For a fixed planning horizon, we investigate the speed and the path of harvesting chosen by the agent. We show that the agent adjusts this speed so as to visit each location only once, even in the absence of travelling cost. Since the agent does not return to any location for a second harvest, it is optimal to fully deplete the resource upon arrival. A similar type of bang–bang solution results when we drop the assumption of a constant harvesting rate: allowing for a variable harvesting rate, the agent chooses to fully exploit the resource either in the last or in the first travelling period. A society interested in conserving some of the resource thus has to take measures to limit the exploitative behaviour of the agent.     

Compliance of land cover changes with municipal land use planning: Evidence from the Lisbon metropolitan region (1990–2007)

In the past few decades, urbanisation has become a major phenomenon in European cities, thus representing one of the key human land cover changes with socio-economic and environmental impacts. In the Lisbon metropolitan region it is estimated that 17% of natural and farmland have been transformed into artificial areas. Since the end of 1990s, specific EU guidelines have been issued to contain urban sprawl and preserve agricultural land. Spatial planning in Portugal obviously is integrating these assumptions into the statutory land-use master plans. But what is the performance of this land use planning system regarding land cover evolution itself? Based on the Lisbon metropolitan region (LMR), one of the major areas of urban growth in Portugal, we examine spatio-temporal land cover patterns between 1990 and 2007 by integrating cross-matrix analysis, spatial metrics, and gradient analysis. Additionally, we overlay these land cover dynamics with municipal master plans that regulate land development in order to assess the compliance levels of this land-use regulatory system. Results indicate that: artificial areas are growing by coalescence and/or by scattered development along an urban–rural gradient; agricultural land is reducing and fragmentation is increasing to enlarge peri-urban spaces; there are high levels of conversion of agricultural land into urban land in protected areas, thus showing a lack of compliance to the land use regulatory system visible in the existing gaps between the original land-use assignments of the master plan and the actual developments.     

ADAM SMITH AND THE ROLE OF THE METAPHOR OF AN INVISIBLE HAND

Daniel Klein and Brandon Lucas's ‘In a Word or Two, Placed in the Middle: The Invisible Hand in Smith's Tomes’, following a vague hint by Peter Minowitz (2004) , offers original physical evidence that Smith ‘deliberately placed the phrase “led by an invisible hand”– at the physical centre of both his masterworks’. Further, it suggests that the invisible‐hand paragraphs are a response to Rousseau (1755 ); and that in ‘numerous and rich ways’, centrality holds ‘special and positive significance in Smith's thought’. This paper acknowledges the physical centrality of the invisible‐hand metaphor, but questions whether centrality alone gives weight to wider claims that the ‘invisible hand’ was Smith's ‘central idea’. It draws upon Smith's Rhetoric Lectures (1763), and argues that the invisible‐hand paragraphs in The Theory of Moral Sentiments and Wealth of Nations identify the actual objects of the invisible‐hand metaphor. This paper insists that Adam Smith is the most reliable source for revealing what he meant. In contrast, most modern attributions of special meaning to Adam Smith's use of the metaphor ignore Smith's teaching on the use of metaphors and, instead, make numerous, and often mutually exclusive, claims that Smith had a ‘doctrine’ of ‘an invisible‐hand’.     

The willingness to pay–willingness to accept gap: A failed replication of Plott and Zeiler

The well-known willingness to pay–willingness to accept (WTP–WTA) gap refers to the observation that individuals attach a higher value to objects they own (WTA) than to objects they do not own (WTP). We report on experiments to re-investigate the possibility that the WTP–WTA gap arises from subject misconceptions due to experimental procedures as suggested by Plott and Zeiler (2005). The contribution of this paper is two-fold: first, we attempt to replicate the findings by Plott and Zeiler that the WTP–WTA gap disappears when using procedures that are aimed at reducing misconceptions, such as extensive training and practice rounds for the BDM mechanism. However, we fail to do so as the WTP–WTA gap persists in the main task where subjects state their WTA or WTP for a mug. Second, we use the paid practice rounds to identify subjects without apparent misconceptions and find that also for those subjects who never make dominated choices in the lottery tasks, the WTP–WTA gap in the mug task exists. Thus, we find no evidence of the idea that subject misconceptions are the main source of the WTP–WTA gap.     

The consumption–investment decision of a prospect theory household: A two-period model

This study extends the literature on portfolio choice under prospect theory preferences by introducing a two-period life cycle model, where the sufficiently loss averse household decides on optimal consumption and investment in a portfolio with one risk-free and one risky asset. The optimal solution depends primarily on whether the household’s present value of the consumption reference levels is below, equal to, or above the present value of its endowment income. Reference levels below the endowment income are associated with the self-enhancement motive. In this case, the household avoids relative losses in consumption in any present or future state of nature (good or bad). As a result the degree of loss aversion does not directly affect optimal consumption and risk taking activity. Reference levels equal to the endowment income are associated with the belonging motive. An example would be a household comparing to others that belong to the same social class. In this case the household’s optimal consumption is the reference consumption and the household will not invest in the risky asset. Finally, reference levels above the endowment income are associated with the self-improvement motive (or high aspirations). For such high reference levels, households cannot avoid experiencing a relative loss in consumption, either now or in the future. As a result, loss aversion directly affects consumption and risky investment.     

Sources of business fluctuations: Financial or technology shocks?

Despite the widespread belief that technology shocks are the main source of business fluctuations, recent empirical studies indicate that in the absence of financial frictions, a shock to the marginal efficiency of investment is the main source and is closely related to financial conditions for investment. We incorporate a financial accelerator mechanism and two types of financial shocks to the external finance premium and net worth in a dynamic stochastic general equilibrium model with shocks to the marginal efficiency of investment, the investment-good price markup, and the rates of neutral and investment-specific technological changes. This model is estimated using eleven US time series that include data on loan, net worth, the loan rate, and the relative price of investment. Our estimation results show that the (non-stationary) neutral and investment-specific technology shocks primarily drive output and investment fluctuations, while the external finance premium shock plays an important role for investment fluctuations. This financial shock induced substantial falls and subsequent sharp hikes in the external finance premium and caused boom–bust cycles over the past two decades.     

Beyond Asymmetry: Substantive Beliefs in Preference Formation and Efficiency of Asymmetrical Negotiations

Contrary to extant propositions on the primacy of trade dependency in compelling faster agreement by subordinate states in asymmetrical economic negotiations, in the European Union–Africa, Caribbean and Pacific (EU–ACP) Economic Partnership Agreement (EPA) negotiations, it is the states that were least materially vulnerable that were quickest to accept an EPA. Why so? I argue that the speed and propensity of ACP states to accept and ratify their EPAs were principally hinged on variances in preference formation based on what Ikenberry and Kupchan [(1990), ‘Socialization and Hegemonic Power’, International Organization, 44 (3), pp. 283–315: 283] call ‘substantive beliefs rather than material payoffs’. The quickest states to ratify an EPA were those which most intensely shared the EU's neoliberal belief in an automatic correlation between trade liberalisation and economic growth, rather than those that were most materially vulnerable. Therefore, by taking the normative sources of preference formation by subordinate states seriously, we can not only derive a parsimonious explanation of EPA negotiating efficiency but also form a foundational conceptual model of predicting efficiency in asymmetrical negotiations that unifies the role of both normative and material considerations.