Cross channel effects of search engine advertising on brick & mortar retail sales: Meta analysis of large scale field experiments on Google.com

We investigate the cross channel effects of search engine advertising on Google.com on sales in brick and mortar retail stores. Obtaining causal and actionable estimates in this context is challenging: Brick and mortar store sales vary widely on a weekly basis; offline media dominate the marketing budget; search advertising and demand are contemporaneously correlated; and estimates have to be credible to overcome agency issues between the online and offline marketing groups. We report on a meta-analysis of a population of 15 independent field experiments, in which 13 well-known U.S. multi-channel retailers spent over $4 Million in incremental search advertising. In test markets category keywords were maintained in positions 1-3 for 76 product categories with no search advertising on these keywords in the control markets. Outcomes measured include sales in the advertised categories, total store sales and Return on Ad Spending. We estimate the average effect of each outcome for this population of experiments using a Hierarchical Bayesian (HB) model. The estimates from the HB model provide causal evidence that increasing search engine advertising on broad keywords on Google.com had a positive effect on sales in brick and mortar stores for the advertised categories for this population of retailers. There also was a positive effect on total store sales. Hence the increase in sales in the advertised categories was incremental to the retailer net of any sales borrowed from non-advertised categories. The total store sales increase was a meaningful improvement compared to the baseline sales growth rates. The average Return on Ad Spend (ROAS) is positive, but does not breakeven on average although several retailers achieved or exceeded break-even based only on brick and mortar sales. We examine the robustness of our findings to alternative assumptions about the data specific to this set of experiments. Our estimates suggest online and offline are linked markets, that media planners should account for the offline effects in the planning and execution of search advertising campaigns, and that these effects should be adjusted by category and retailer. Extensive replication and a unique research protocol ensure that our results are general and credible.     

Performance of the Macroeconomic Imbalance Procedure in light of historical experience in the CEE region

This article applies set of 24 baseline and auxiliary indicators included into the Macroeconomic Imbalance Procedure framework on the conditions of 17 CEE countries to assess their predictive power given the policy pre-determined and optimal thresholds for the period 1991–2014. Our results suggest that the optimal official thresholds might either be excessively too accommodative (public and private, total or external debt levels), overly conservative (current account balance, export market share and nominal unit labour costs), or with less informative value (labour market characteristics) for set of transition economies. Indicators with higher predictive power belong predominantly to the group of external imbalances indicators.     

A valuation algorithm for indifference prices in incomplete markets

A probabilistic iterative algorithm is constructed for indifference prices of claims in a multiperiod incomplete model. At each time step, a nonlinear pricing functional is applied that isolates and prices separately the two types of risk. It is represented solely in terms of risk aversion and the pricing measure, a martingale measure that preserves the conditional distribution of unhedged risks, given the hedgeable ones, from their historical counterparts.Received: 1 September 2003, Mathematics Subject Classification: 93E20, 60G40, 60J75JEL Classification: C61, G11, G13The second author acknowledges partial support from NSF Grants DMS 0102909 and DMS 0091946.     

Computer-assisted constrained approval voting

Approval voting, proposed independently by several analysts in the 1970s, is a voting system in which voters can vote for as many candidates as they like in multicandidate elections. Recently, S.J. Brams modified this system, introducing so-called constrained approval voting. It is designed for a professional association to ensure equitable representation of different interests. In his new system approval voting is combined with the constraints on the number of persons that can be elected from different categories of members. In the present paper the problem of constrained approval voting is formulated (following the work of R.F. Potthoff) as an integer programming problem. Some computational aspects of this problem are discussed. The paper presents a numerical example illustrating a possibility to apply the discussed voting procedure in the election of members of the Committee for Organization and Management Sciences of the Polish Academy of Sciences.     

The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from Poland

ABSTRACT

We outline the process of implementation of the accounting Directive 2013/34/EU by the Republic of Poland in the context of references to IFRS. The purpose of the article is to determine to what extent IFRS are used by actors taking part in the legislative and enforcement processes. The accounting regulation in Poland comprises an act of Parliament and the regulations of the Ministry of Finance. As a result the regulation is relatively succinct and many elements present in IFRS are not covered, while the issues of record-keeping and verification of accounting documentation receive more attention. A review of the responses to a call for opinions reveals that IFRS are rarely mentioned.     

A BSDE approach to fair bilateral pricing under endogenous collateralization

Nie and Rutkowski (Int. J. Theor. Appl. Finance 18:1550048, 2015; Math. Finance, 2016, to appear) examined fair bilateral pricing in models with funding costs and an exogenously given collateral. The main goal of this work is to extend results from Nie and Rutkowski (Int. J. Theor. Appl. Finance 18:1550048, 2015; Math. Finance, 2016, to appear) to the case of an endogenous margin account depending on the contract’s value for the hedger and/or the counterparty. Comparison theorems for BSDEs from Nie and Rutkowski (Theory Probab. Appl., 2016, forthcoming) are used to derive bounds for unilateral prices and to study the range for fair bilateral prices in a general semimartingale model. The backward stochastic viability property, introduced by Buckdahn et al. (Probab. Theory Relat. Fields 116:485–504, 2000), is employed to examine the bounds for fair bilateral prices for European claims with a negotiated collateral in a diffusion-type model. We also generalize in several respects the option pricing results from Bergman (Rev. Financ. Stud. 8:475–500, 1995), Mercurio (Actuarial Sciences and Quantitative Finance, pp. 65–95, 2015) and Piterbarg (Risk 23(2):97–102, 2010) by considering contracts with cash-flow streams and allowing for idiosyncratic funding costs for risky assets.     

Estimating the revenue costs of tax treaties in developing countries

(12764) Petr Janský Marek Šedivý Tax treaties between countries influence how much tax revenues governments receive from multinational enterprises. These treaties often reduce the withholding tax rates on outgoing dividend and interest payments. We provide illustrative estimates of costs for these two taxes for 14 developing countries in sub‐Saharan Africa and Asia in a first multi‐country comparison of this kind. These might be overestimates because we assume that foreign direct investments are not influenced by the tax treaties. We estimate that the highest potential tax revenue losses are within hundreds of millions US$ and around 0.1% of GDP, with Philippines incurring the highest losses both in US$ and relative to GDP. We also find that around 95% of the losses is due to dividends and that only four investor countries—Japan, Netherlands, Switzerland and Singapore—are together responsible for more than half of the losses. We discuss the limitations of these estimates and how future research could improve their quality as well as coverage.     

Fair bilateral pricing under funding costs and exogenous collateralization

Bielecki and Rutkowski introduced and studied a generic nonlinear market model, which includes several risky assets, multiple funding accounts, and margin accounts. In this paper, we examine the pricing and hedging of contract from the perspective of both the hedger and the counterparty with arbitrary initial endowments. We derive inequalities for unilateral prices and we study the range of fair bilateral prices. We also examine the positive homogeneity and monotonicity of unilateral prices with respect to the initial endowments. Our study hinges on results from Nie and Rutkowski for backward stochastic differential equations (BSDEs) driven by continuous martingales, but we also derive the pricing partial differential equations (PDEs) for path‐independent contingent claims of a European style in a Markovian framework.     

Interpretable sports team rating models based on the gradient descent algorithm

We introduce several new sports team rating models based on the gradient descent algorithm. More precisely, the models can be formulated by maximising the likelihood of match results observed using a single step of this optimisation heuristic. The proposed framework is inspired by the prominent Elo rating system, and yields an iterative version of ordinal logistic regression, as well as different variants of Poisson regression-based models. This construction makes the update equations easy to interpret, and adjusts ratings once new match results are observed. Thus, it naturally handles temporal changes in team strength. Moreover, a study of association football data indicates that the new models yield more accurate forecasts and are less computationally demanding than corresponding methods that jointly optimise the likelihood for the whole set of matches.