The Effect of Low‐ versus High‐Variance in Product Reviews on Product Evaluation

This research investigates whether the effect of low‐ versus high‐variance product reviews on the evaluation of a product about which consumers have favorable or unfavorable prior expectation can vary depending on product type, the argument quality of product reviews, and the number of reviewers. The data across three laboratory experiments demonstrate that high‐variance product reviews are more likely than low‐variance product reviews to undermine product evaluation when consumers have unfavorable prior expectation about a product. When consumers have favorable prior expectation, however, high‐variance product reviews can enhance or undermine product evaluation depending on product category, the argument quality of reviews, and the number of reviewers. The findings are explained by the type of causal attribution consumers make, such that high‐variance product reviews can allow consumers to make biased product evaluation consistent with their prior expectation when the causes of variance in the product reviews are attributed to the reviewers rather than to the product. However, when the causes of variance are attributed to the product rather than the reviewers, high‐variance product reviews can undermine product evaluation regardless of the favorability of prior expectation.     

Contests over joint production on networks

We consider a network of heterogeneous agents where each edge represents a two‐player contest between the respective nodes. In these bilateral contests, agents compete over an endogenous prize jointly produced using their own contest efforts. We provide a necessary and sufficient condition for the existence of Nash equilibrium and characterize the equilibrium total effort for every agent. Our model has insightful results regarding the network type, that is, depending on whether the network is bipartite or nonbipartite. Finally, considering the sum of all expected utilities as an efficiency notion, we investigate the optimal network structure.     

Prediction of bank financial strength ratings: The case of Turkey

Bank financial strength ratings have gained widespread popularity especially after the recent financial turmoil. Rating agencies were criticized because of their ratings and failure to predict the bankruptcy of the banks. Based on this observation, we investigate whether the forecast of the rating of bank's financial strength using publicly available data is consistent with those of the credit rating agency. We use the data of Turkish banks for this investigation. We take a country-specific approach because previous studies found that proxies used for environmental factors (political, economic, and financial risk of the country) did not have any explanatory power and it is hard to find international data for other important factors such as franchise value, concentration, and efficiency. We use two popular multivariate statistical techniques (multiple discriminant analysis and ordered logistic regression) to estimate a suitable model and we compare their performances with those of two mostly used data mining techniques (Support Vector Machine and Artificial Neural Network). Our results suggest that our predictions are consistent with those of Moody's financial strength rating in general.. The important factors in rating are found to be profitability (measured by return on equity), efficient use of resources, and funding the businesses and the households instead of the government that shows efficient placement of the funds.     

An Incentive Compatible Price Mechanism For Attaining Lindhal Allocation

A mechanism operated by price signals of individuals that yields Lindahl allocation as an outcome is studied. This mechanism incorporates producers as players as well as consumers. The mechanism is valid when there are two or more consumers. A stable allocation rule exists when two consumers are present, and a stable operation of the mechanism through parameter for the more general environment is analized. [020]     

Unbundling the local loop

We study competition for high bandwidth services in the telecommunications industry by introducing the possibility of unbundling the local loop, where leased lines permit the entrant to provide services without building up its own infrastructure. We use a dynamic model of technology adoption and study the incentives of the entrant to lease loops and compete “service-based”, and/or to build up a new and more efficient infrastructure and compete “facility-based”, given the rental price.We show that the incumbent sets too low a rental price for its loops; hence, the entrant adopts the new technology too late from a social welfare perspective. The distortion may appear not only on the timing of technology adoption but also on the type (quality) of the new technology to be adopted. We also show that while regulating the rental price may suffice to achieve socially desirable outcomes, a sunset clause does not improve social welfare.     

Business responses to climate change: strategies for reducing greenhouse gas emissions in Vietnam

This study identifies the climate change strategies adopted by firms in developing countries to reduce their greenhouse gas (GHG) emissions. First, a framework is developed to classify and assess the GHG emission strategies of companies; second, it is then improved by using data on their implementation collected from 185 companies operating in 10 energy-intensive industries in Vietnam. We find that multinational subsidiaries engage in various climate change activities and have a higher level of implementation than those of domestic firms. Further, the most active and proactive companies are large in size and from Europe, the United States and Japan.     

Level of access and infrastructure investment in network industries

In this paper, we study how the terms of access to an incumbent’s infrastructure (i.e., the level of access and price) affect an entrant’s incentives to build its own infrastructure. Setting a high level of access (e.g., a resale arrangement), which requires relatively small up-front investment for entry, accelerates market entry, but at the same time delays the deployment of the entrant’s infrastructure. This is also true for a lower access price. We show that the socially optimal access price can vary non-monotonically with the level of access. We also study the case where access is provided at two different levels, and show that access provision at multiple levels can delay infrastructure building. Finally, we modify our baseline model to allow for experience and/or market share acquisition via access-based entry, and show that high levels of access may accelerate facility-based entry.     

Gender,generation and sustainable consumption: Exploring the behaviour of consumers from Izmir,Turkey

This study investigates the relationship between consumers’ sustainable consumption behaviour and both gender and generation‐related individual differences in a sample of Turkish consumers. A total of 393 participants from different generations and gender took part in the study. To measure sustainable consumption behaviour, we used four‐dimensional sustainable consumption behaviour scale. The results showed that generation is associated with unneeded consumption as a dimension of sustainable consumption behaviour. Consumers who are Baby Boomers found to have the highest level of unneeded consumption behaviour while Gen‐Zers have fewest. Additionally, data supported the association between gender and sustainable consumption behaviour. Women showed a higher level of sustainable consumption behaviour both in overall behaviour and tendency to reuse products. Taken together, the findings suggest that gender and generation of consumers can differentiate sustainable consumption behaviour. The implications of these findings, as well as the limitations and future directions, are also discussed.     

Do futures‐based strategies enhance dynamic portfolio insurance?

In this paper we investigate the relative performance of two approaches to dynamic portfolio insurance: the synthetic put and the Constant Proportion Portfolio Insurance (CPPI). The investigation is conducted on the Australian market, over a sample period of 59 non‐overlapping quarters from December 1987 to December 2002. Its main contribution is to provide a comprehensive assessment of the two approaches under different market conditions, and the testing of ex ante information as an input into the trading program. The major finding is that the futures‐based implementation of both synthetic put and the CPPI approach is robust to both tranquil and turbulent market conditions in preserving the desired floor. The fact that this conclusion includes the case of employing implied volatility (obtained from the options market) is highly encouraging as it suggests high implementability of the strategy. Notably, the risk‐return tradeoff shows that portfolio insurance using this volatility measure yields a return that is 64 basis points over the risk free investment. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:591–608, 2004