A note on the independence of irrelevant alternatives in probabilistic choice models

The purpose of this note is to show that there is no necessary relationship between the independence of irrelevant alternatives (IIA) property and stochastic independence of the errors in probabilistic choice models.     

Does context matter for sustainability disclosure? Institutional factors in Southeast Asia

Corporate sustainability is a dynamic, socially constructed concept. Relatedly, to understand the variations in the disclosure of corporate sustainability activities across countries, we need to inherently explore their underlying sociopolitical contexts. At present our understanding in this regard, is deficient. We respond to this extant research gap by adopting a multi‐country approach to investigate the relationship between countries' institutional environments and firms' sustainability disclosure (SD) practices, across six countries in the Southeast Asian region. Our findings reflect a common focus of Southeast Asian firms on community and human resources (HRs) related disclosures. Nevertheless, nuanced differences in their overall SD levels confirm the influence of differing legal, normative, and sociocultural systems in engendering greater disclosure and transparency at a national level. By quantifying the institutional environment and identifying external influencing factors, our study provides a useful framework grounded in neo‐institutional theory to widen the existing understanding of how institutional pressures can be measured and compared across different contexts.     

Being Innovative While Being Green: An Experimental Inquiry into How Consumers Respond to Eco‐Innovative Product Designs

Eco‐innovations are an effective way for companies to strategically align themselves with customers’ growing environmental concerns. Despite their crucial role, scant research has focused on eco‐innovative product designs. Drawing from the sustainability and innovation literature, this article proposes that in the design of an eco‐innovation, its degree of innovativeness, level of eco‐friendliness, and detachability significantly affect consumers' adoption intentions. This article develops various conceptual models tested through three independent online experiments with U.S. consumers. The findings support the hypotheses and provide useful insights into the underlying mechanisms of how and why consumers respond to eco‐innovative product designs across various high‐tech product categories. Specifically, the results show (1) a positive effect of innovativeness degrees of eco‐innovative attributes on consumers' perceptions of product eco‐friendliness and on their adoption intentions as well as a significant moderating role of consumers' need for cognition (Study 1); (2) a positive influence of eco‐friendliness levels of eco‐innovative attributes on consumer adoption intentions in the case of high‐complexity products but not for low‐complexity products, emphasizing the need to adopt different approaches when developing eco‐innovations to ensure favorable consumer reactions (Study 2); and (3) a significant impact of the detachability of eco‐innovative attributes on consumers' perceptions of trade‐offs between environmental benefits and product functionality and on their intentions to adopt eco‐innovations (Study 3). These findings add to existing theoretical knowledge, provide actionable managerial implications, and identify fruitful avenues for future research.     

Competition and Appraisal Inflation

The Journal of Real Estate Finance and Economics - In mortgage debt contracts, real property serves as collateral and the terms of mortgage financing are largely conditional on the certification of...     

Social media bots and stock markets

This study examines the link between information spread by social media bots and stock trading. Based on a large sample of tweets mentioning 55 companies in the FTSE 100 composites, we find significant relations between bot tweets and stock returns, volatility, and trading volume at both daily and intraday levels. These results are also confirmed by an event study of stock response following abnormal increases in the volume of tweets. The findings are robust to various specifications, including controlling for traditional news channel, alternative measures of volatility, information flows in pretrading hours, and different measures of sentiment.     

Applying the dissonance‐minimising format to value cultural heritage in developing countries*

We adapt the dissonance‐minimising (DM) format proposed by Blamey et al. [Land Economics, 75 (1999) 126] in a dichotomous choice contingent valuation survey to estimate the economic benefits of preserving a cultural heritage site in Vietnam. We find that the DM format can be successfully applied to avoid biases because of yea‐saying in a developing country context.     

Investment in quality upgrade and regulation of the internet

This paper studies the investment decision by a monopolistic internet service provider (ISP) in different regulatory environments. We consider that the ISP can technically provide separate quality upgrades to two vertically differentiated content providers (CPs). Our results show that if unregulated, the ISP could optimally provide asymmetric quality upgrades to both CPs, in favor of the high-quality CP. This subsequently increases the degree of content differentiation, softening competition between the CPs. Imposing a nondiscrimination regulation that forces the ISP to provide an equal quality upgrade to both CPs, however, reduce the ISP’s investment incentive and social welfare. Furthermore, the social planner provides preferential treatment to the high-quality CP if the degree of substitutability is sufficiently low. In contrast, it is socially optimal to prioritize the low-quality CP if the contents are sufficient substitutes, or provide exclusivity if vertical differentiation is high.

     

A Note on a Conversation with Geoff Harcourt

In this note Geoff Harcourt offers his views, via a face to face interview, on a wide range of issues relating to the discipline of economics. He recalls his time as a student at University of Melbourne, his choice of doctoral study and experiences at University of Cambridge, his original intellectual influences and affiliation, and his contributions to economics. He also discusses how economics have evolved over the years, comments on the current status of economic teaching, research and policy advice in Australia, and makes some recommendations to early career researchers. The note also includes a brief bio sketch of Professor Harcourt.