Regret theory and the banking firm: The optimal bank interest margin

This paper examines the optimal bank interest margin, i.e., the spread between the loan rate and the deposit rate of a bank, when the bank is not only risk-averse but also regret-averse. Regret-averse preferences are characterized by a utility function that includes disutility from having chosen ex-post suboptimal alternatives. We show that the presence of regret aversion raises or lowers the optimal bank interest margin than the one chosen by the purely risk-averse bank, depending on whether the probability of default is below or above a threshold value, respectively. Regret aversion as such makes the bank less prudent and more prone to risk-taking when the probability of default is high, thereby adversely affecting the stability of the banking system.     

Understanding organizational citizenship behavior from a cultural perspective: An empirical study within the context of hotels in Mainland China

Scholarly concerns in organizational citizenship behaviors (OCBs) have increased dramatically over the past two decades. Nevertheless, there are significant issues yet to be addressed and resolved, one of which relates to the influences of cultural values on such voluntary behaviors. In view of the importance of OCB in meliorating hotel service and cultivating customer loyalty, the current study seeks to investigate a possible mechanism through which Chinese values (CVs) may function on employee citizenship behaviors within the hotels in Mainland China. The research questions focus on whether CVs have a direct impact on OCB and its verified antecedents, leader–member exchange (LMX) and employee organizational commitment (OC). Eventually, the research findings have verified the conceptual model and confirmed all the postulated linkages among the constructs under study.     

Working with customers: Cooperation and competition in relational marketing

The relationship and interaction between salespeople and their customers may be usefiilly examined in terms of how they believe their goals and interests are related. Twenty‐five sales persons and 40 travel agents and managers in charge of corporate travel were interviewed on specific interactions. Results support previous theorizing that productive conflict management and resulting trust and personal bonds contribute to successful marketing relationships and suggest that these dynamics occur when sales representatives and clients have developed strongly cooperative goals, but not when they have competitive or independent goals. Results were interpreted that the constructive discussion of opposing views complements cooperative goals as important contributors for developing successful relational marketing.     

Progressive taxation and the intensity and timing of investment

This paper examines the effect of progressive taxation on a firm's investment intensity and timing decisions using a real options approach. The firm possesses a perpetual option to invest in a project at any instant by incurring an irreversible investment cost at that time. The amount of the irreversible investment cost determines the intensity of investment that augments the value of the project. Tax progression is specified in a particular case of a constant marginal tax rate with an exogenously given tax exemption threshold that makes the average tax rate increase with the tax base. We show that the firm's investment decisions are neutral to tax progression only when the exogenously given tax exemption threshold is sufficiently large. When tax neutrality does not hold, we show that progressive taxation has a perverse effect on investment intensity. Finally, we show that progressive taxation induces the firm to invest earlier as compared to the case under proportional taxation (i.e., in the absence of any tax exemption).     

Valuation of Discrete Dynamic Fund Protection Under Lévy Processes

Abstract

This paper investigates the valuation of discrete dynamic fund protection (DFP) under Levy processes. Specifically, the analytical solution of discrete DFP under Lévy processes is obtained in terms of Fourier transforms. The derivation uses Spitzer’s formula and leads to a recursion on computing the characteristic function of the maximum protection-to-fund ratio using the Fourier inversion. DFP can then be valued efficiently and accurately via the fast Fourier transform. The pricing behavior of the discrete DFP is numerically examined using several Levy processes, such as geometric Brownian motion, jump-diffusion models, and variance gamma process. Numerical experiments confirm that the proposed approach produces highly accurate discrete DFP values within 1 second.     

Gender preference and transfers from parents to children: an inter-regional comparison

This paper examines whether parents exhibit gender preference in the allocation of family resources to their adult children. Gender preference is defined in the context of an altruistic model for inter-vivos transfer from parents to children extended to include educational investment. Data from the Health and Retirement Study (United States) and the Korean Longitudinal Study of Ageing are used to show that the degree of gender preference differs across these culturally distinct regions. Among Korean families, empirical results point to male preference as sons receive larger inter-vivos transfers and attain higher levels of education compared with daughters. In contrast, the evidence pertaining to gender preference among American families points to daughter preference as inter-vivos transfers and educational investment is generally higher among female adult children.     

Is a Picture Always Worth a Thousand Words? The Impact of Presentation Formats in Consumers' Early Evaluations of Really New Products (RNPs)

Really new products (RNPs) enable consumers to do things they have never been able to do before. However, research has shown that consumers have difficulties understanding the benefits of such novel products, and therefore, adoption intentions remain low. Mental simulations and analogies have been identified as effective framing strategies to convey the benefits of RNPs. However, existing research has focused solely on the use of mental simulations and analogies conveyed using words, whereas these can also be conveyed using pictures. Although the general consumer research literature points to a superiority effect of pictures, because the underlying mechanisms that individuals use to understand RNPs differ entirely from those used for traditional products, there is a need to study the impact of pictures for RNPs. Moreover, prior work has not examined differences in RNP type. The present research argues that RNPs can be utilitarian, hedonic, or hybrid and that the optimal presentation format (words versus pictures) is contingent upon the type of RNP considered. Consequently, failure to acknowledge this distinction could lead to negative consequences. The present study aims to identify the impact of alternative presentation formats (i.e., words versus pictures) presented using different framing strategies (i.e., analogies versus mental simulations) on individual responses (i.e., product comprehension and attitude to the product) to three types of RNPs (i.e., utilitarian versus hedonic versus hybrid). Hypotheses are tested by means of an experimental study. The results of the study show that the effectiveness of alternative combinations of framing strategies and presentation formats in enhancing comprehension and attitude for RNPs depends on product type (utilitarian versus hedonic versus hybrid). The empirical findings presented not only extend prior work on consumer responses to mental simulations and analogies for RNPs, but also establish connections between this literature and an underdeveloped stream of research on hybrid products, as well as a broader stream of research on utilitarian versus hedonic product benefits. The findings suggest that practitioners may not have been using optimal marketing communications strategies to convey the benefits of RNPs. Strategies that may help enhance consumer responses to RNPs by taking into consideration product type (utilitarian versus hedonic versus hybrid) are put forward.     

Path‐dependent currency options with mean reversion

This paper develops a path‐dependent currency option pricing framework in which the exchange rate follows a mean‐reverting lognormal process. Analytical solutions are derived for barrier options with a constant barrier, lookback options, and turbo warrants. As the analytical solutions are obtained using a Laplace transform, this study numerically shows that the solution implemented with a numerical Laplace inversion is efficient and accurate. The pricing behavior of path‐dependent options with mean reversion is contrasted with the Black‐Scholes model. © 2008 Wiley Periodicals, Inc. Jrl Fut Mark 28:275–293, 2008     

投资圈的“红色行动”

在被戏称为“兄弟会”的华尔街，女性投资决策人的数量屈指可数，但情况正在不懈的努力下一点一点发生变化。     

节约成本十法则

在当今竞争白热化的商业世界，削减成本已是势在必行了。大部分削减成本的技巧都简单易行，能够迅速起效，让企业实现短期的成本节约。