Daylight saving effect

Kamstra et al. [Kamstra, M.J., Kramer, L.A., Levi, M.D., 2000. Losing sleep at the market: the daylight saving anomaly. The American Economic Review 90, 1005–1011] argue that the mean weekend return following the changes in daylight saving time is less than the mean weekend return throughout the rest of the year. Opposing studies, such as Pinegar [Pinegar, J.M., 2002. Losing sleep at the market: comment. The American Economic Review 92, 1251–1256), reason that the observed results depend upon methodology. We extend the ongoing discussions by providing further evidence for equity markets and bond markets in Germany and across Europe. We further demonstrate that the daylight saving effect does not serve as a potential rationale for the weekend effect.     

A welfare analysis of social security in a dynastic framework*

In this article, we study the welfare effects of unfunded social security in a general equilibrium model populated with overlapping generations of altruistic individuals that differ in lifetime expectancy and earnings ability. Contrary to previous research, our results indicate that steady‐state welfare increases with social security for most households, although by very different amounts. This result is mainly due to two factors. First, the presence of two‐sided altruism significantly mitigates the crowding out effect of unfunded social security. Second, ability shocks and uncertain lifetimes generate significant heterogeneity among households to yield different induced preferences for social security.     

MONETARY–FISCAL INTERACTIONS WITH A CONSERVATIVE CENTRAL BANK

We study macroeconomic stabilization when monetary and fiscal policies interact via their effects on output and inflation and the monetary authority is more conservative than the fiscal. We find that monetary–fiscal interactions result in poor macroeconomic stabilization. With both policies discretionary, the Nash equilibrium is suboptimal with higher output and lower inflation than optimal; the Nash equilibrium may be extreme with output higher and inflation lower than either authority want. Leadership equilibria are not second best. Monetary commitment is completely negated by fiscal discretion and yields the same outcome as discretionary monetary leadership for all realizations of shocks. But fiscal commitment is not similarly negated by monetary discretion. Optimal macroeconomic stabilization requires either commitment of both monetary and fiscal policies, or identical targets for both authorities – output socially optimal and inflation appropriately conservative – or complete separation of tasks.     

The Bertrand Paradox,the Useless Auctioneer and the Launhardt Model

We revisit the Cournot–Bertrand debate in the light of Cournot, Edgeworth and Launhardt, tracing back to Launhardt the origin of price competition in duopoly models with constant returns to scale. Then, we discuss the formalisation of consumer utility function for differentiated products, first appearing in Launhardt and then in Bowley. This allows us to point out that assuming that firms know the demand function(s) is equivalent to assuming that they know the structure of consumer preferences. Therefore, we argue that there is no role for the auctioneer, either in Cournot or in Walras.     

Revisiting Tversky's Trail—How Money Makes a Subtle Difference in Similarity Effect Experiments

Recent findings in research on context effects indicate that, as opposed to choices under hypothetical settings, compromise effects are significantly attenuated in binding settings that include real payments for products. The present investigation examines to what extent this finding applies to yet another context effect, namely the similarity effect (SE). The SE stipulates that, compared with initial shares of two options A and B in a binary choice set, the introduction of an option C that is dissimilar to B but similar to A will hurt the latter more than the nonadjacent option B. The conducted online survey examines the SE in unforced choices of experienced consumers between real brands across three consumer good categories. The results confirm that the SE is evidently reduced under real payment conditions, hence confirming the hypothesis that the applied choice setting moderates the efficacy of the composition of choice sets.     

ENDOGENOUS TIMING IN QUALITY CHOICES AND PRICE COMPETITION

We modify the price‐setting version of the vertically differentiated duopoly model by Aoki (2003) by introducing an extended game in which firms noncooperatively choose the timing of moves at the quality stage. Our results show that there are multiple equilibria in pure strategies, whereby firms always select sequential play at the quality stage. We also investigate the mixed‐strategy equilibrium, revealing that the probability of generating outcomes out of equilibrium is higher than the probability of playing one Nash equilibria in pure strategies. In the alternative case with full market coverage, we show that the quality stage is solved in dominant strategies and therefore the choice of roles becomes irrelevant as the Nash and Stackelberg solutions coincide. With full market coverage and corner solution, the results show that the game has a unique subgame perfect equilibrium in pure strategies, where the high‐quality firm takes the lead in the quality stage.     

An analysis of e-business adoption and its impact on relational quality in travel agency–supplier relationships

This study analyzes how managers of retail travel agencies perceive the antecedents and consequences of adopting e-business in their supplier relationships. A comprehensive model integrating its antecedents and relational effects is developed and empirically tested using SEM. The study surveyed 101 travel agents in Spain. Research findings indicate that customer pressure has a strong influence on e-communication practices. E-communication with the travel agency's supplier and the pressure exerted by the sector are the main antecedents for e-procurement. Effects of e-business on relational quality are contradictory. E-procurement influences negatively on trust. Conversely, e-communication has a positive impact on trust, thus having a favorable impact on perceived reciprocity and travel agent's commitment to its supplier. Main findings indicate that the use of the Internet is largely driven by normative pressures, and this coercive power has a detrimental impact on trust. To avoid such negative consequences, perceived reciprocity is a prerequisite for committed supplier relationships.     

Project Management of Production Line Automation: A Comparative Analysis of Project Management in Brazil and Colombia

This article aims to evaluate the production line automation projects developed by Brazilian and Colombian companies from the Project Management perspective, through the analysis of the application degree of PMBOK processes, to understand how formal techniques are being employed in these countries and also to identify improvement opportunities, when necessary. Data were collected through a survey. The similarity index between the ten processes, with the highest application degree in the Brazilian and Colombian samples, was 70%. For the processes with the lowest application degree, the similarity index was 60%. No similar study was found in the literature.     

The monopolist's optimal R&D portfolio

The monopolist's incentives towards product and process innovationsare evaluated against the social optimum. The main findingsare that (i) the incentive to invest in cost-reducing R&Dis inversely related to the number of varieties being suppliedat equilibrium, under both regimes; (ii) distortions obtainunder monopoly, w.r.t. both the number of varieties and thetechnology. With substitutes, the monopolist's product rangeis smaller than under social planning, while with complementsthe product range is the same under both regimes. For any givennumber of goods, the monopolist operates at a higher marginalcost than the planner does.