Economic geography and endogenous determination of transport technology

This paper studies the interdependence of economic geography and transport technology. A two-region model is used to obtain the conditions for the modern transport technology to be adopted in an economy. In particular, the impact of economic geography upon the adoption of the modern technology is examined. Furthermore, I discuss what combination of economic geography (symmetric or core–periphery pattern) and transport technology (traditional or modern technology) is to be realized in an economy.     

Contagion of Self‐Interested Behavior: Evidence from Group Dictator Game Experiments

We examine how group decision‐making affects other‐regarding behavior in experimental dictator games. In particular, we assess whether the effects of iterated games differ for group and individual decision‐making and whether the difference in decision‐making style (individual or group) changes the perception of social identity. We make two findings on group decision‐making. First, group decisions become more selfish when repeating the game after changing group members. Second, a dictator group donates more to a recipient group at the same university than to a recipient group at a different university. These findings are not true for individual decision‐making.     

Corporate restructuring in Japan: Who monitors the monitor?

Peek and Rosengren [Peek, J., Rosengren, E., 2005. Unnatural selection: Perverse incentives and the misallocation of credit in Japan. American Economic Review 95, 1144–1166] showed that, when the bubble economy era ended, regulatory forbearance and perverse incentives allowed Japanese banks to engage extensively in evergreening. This is the first comprehensive study to empirically analyze the economics of private debt restructurings of financially distressed companies in Japan, where the corporate monitoring mechanism is not market based but large-stakeholder based – typically, banks and affiliated companies. These stakeholders are expected to efficiently resolve potential bankruptcy or collapse with better information resulting from long-term relationships with the distressed firms. Our study, however, finds that private restructurings led by them failed because of delays in implementing fundamental solutions. Forbearance in addressing the needs of distressed firms demonstrates the weakness of such stakeholders in instituting discipline, hence the need for a system to “monitor the monitor”.     

The influence of academic interactions on stock selection and performance: Evidence from Japan

Using mutual fund holdings data and fund manager demographic data, this paper examines whether academic interactions between fund managers and board members affect fund manager investment decisions and fund performance. I show that mutual fund managers are more likely to hold academically related stocks. Performance tests provide empirical evidence that academic interactions are beneficial to earn more profits. In addition, I show that mutual fund managers seem to lose profitable opportunities due to academic interactions because of their investment styles. Overall, this paper shows that mutual fund managers seem to take advantage of academic interactions to earn greater profits.     

Pricing average options on commodities

This study proposes a new approximation formula for pricing average options on commodities under a stochastic volatility environment. In particular, it derives an option pricing formula under Heston and an extended λ‐SABR stochastic volatility models (which includes an extended SABR model as a special case). Moreover, numerical examples support the accuracy of the proposed average option pricing formula. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark Mark 31:407–439, 2011     

Important attributes of lodgings to gain repeat business: A comparison between individual travels and group travels

The purpose of this study is to investigate the attributes of the satisfaction that are related to the lodging-guests’ tendency to revisit the lodgings and to compare these attributes among the different travel styles, such as individual travel, travel with friends or as a couple, and travel with family. We examine 6351 guest evaluations from a highly popular travel reservations website. Multinomial logistic regression analyses are performed and they show that the important attributes for lodgings to gain repeat business vary among their guest's travel styles.     

Efficient static replication of European options under exponential Lévy models

This study proposes a new scheme for the static replication of European options and their portfolios. First, a general approximation formula for efficient static replication as an extension of Carr P. and Chou A. (1997, 2002) and Carr P. and Wu L. (2002) is derived. Second, a concrete procedure for implementing the scheme by applying it to plain vanilla options under exponential Lévy models is presented. Finally, numerical examples in a model developed by Carr, P., Geman, H., Madan, D., and Yor M. (2002) are used to demonstrate that the replication scheme is more efficient and more effective in practice than a standard static replication method. © 2008 Wiley Periodicals, Inc. Jrl Fut Mark 29:1–15, 2009     

A Pacific free trade area

Great Britain's desire to join the Common Market has given a fresh impetus to the plans of a Pacific-Asiatic free trade area. Members of PAFTA are to be Japan, the United States, Canada, Australia, and New Zealand. By means of an economic integration of these nations, particularly Japan is interested in stabilising its position in the world economy and not to stand completely outside regional unions. Already last year, INTERECONOMICS published a critical comment to the PAFTA plans written by the Australian professor, H. W. Arndt. In view of the manifold problems and the economic disadvantages to be anticipated, he declared against an Australian participation in this project. In the following article, Professor Kojima, the initiator of the Pacific integration plans, takes a different point of view.     

Budget constraint of a firm and economic theory

Summary Firms in reality are subject to budget constraints which general equilibrium theorists have paid little attention. Using Morishima (1950, 1992) model, this paper deals with firms that are subject to budgets pertaining to sales and investment decisions, and proves the existence of a general equilibrium. We show that an economy with firms subject to budgets does not necessarily satisfy the efficiency proposition, and clarify how the total profit maximum condition in the Arrow-Debreu (1954) type economy ensures an efficiency in a limited dynamic sense.The author is grateful to Professors J. Iritani, H. Nagatani, and K. Urai who gave useful comments on occasions of Saturday Workshop on Economic Theory and Mathematics. He is also grateful to Professor M. Kaneko for his useful comments on an earlier version of the paper Kuga (1993), to which this article is closely related.