Asymmetric Loss and the Rationality of Inflation Forecasts: Evidence from South Korea

We examine asymmetry in the loss functions of South Korean consumers' and the Bank of Korea's (BOK) inflation forecasts, and test the rationality of these forecasts under the assumption of a possible asymmetric loss function. Under an asymmetric loss function, we find evidence of asymmetry and support for rationality. We also examine whether the BOK's forecasts incorporate respective forecasts and consensus forecasts efficiently. They broadly use available information efficiently, and their results are robust to inflation‐targeting measures and the recent global financial crisis. However, our results suggest that the information efficiency of the BOK's forecasts for consumers was affected during the period 2007–2008.     

An analysis of some aspects of regulatory risk and the required rate of return for public utilities

This paper uses a modification of the continuous time asset pricing model of Cox, Ingersoll, and Ross to analyze the effect of regulatory risk on the cost of capital. Analysis shows that random errors in setting the allowed rate of return can either increase or decrease the cost of capital depending on other regulatory parameters. However, the analysis suggests that regulatory risk is not material.     

Vivid-memory formation through experiential value in the context of the international industrial exhibition

This study empirically tests the relationships between experiential value, vividness, storytelling intentions, and patronage intentions in the industrial exhibitions, and examines the moderating effect of mementos. A total of 211 respondents were recruited from visitors to the international game exhibition. According to the results, (1) three dimensions of experiential value (service excellence, playfulness, and aesthetics) had positive effects on vividness, (2) vividness positively influenced storytelling and patronage intentions, (3) storytelling intentions increased patronage intentions, and (4) mementos had a significant moderating effect on the relationship between vividness and storytelling intentions but not on the relationship between vividness and patronage intentions.     

Analysis and design of microfinance services: A case of ROSCA

Rotating savings and credit association (ROSCA) is a well-known microfinance association widely used in many countries around the world with long histories. By considering extra profits that such a system can provide when compared to banking transactions, we develop optimization problems to achieve an optimal design of a ROSCA. We find that ROSCAs might attract investors when deposit and loan rates from formal banking systems are not favorable. Furthermore, optimal rates and optimal orders to maximize system outputs are reported.     

Developing Group Ordered Weighted Averaging Operator Weights for Group Decision Support

A few single decision-making methods under uncertainty (SDMUU) are available in the literature. The reason for such scarcity seems to be mainly due to too insufficient information to induce a reasonable result for effective decision support. Moreover their final outcomes on the same SDMUU problem may be different depending on which method is applied. A group decision-making method under uncertainty (GDMUU) extends a SDMUU in a sense that a group of individuals, each expressing different opinions, work together to solve a relevant problem. As in a SDMUU, we find that just a few methods are available to solve a GDMUU problem. In the paper, the ordered weighted averaging (OWA) method, originally devised for use with the SDMUU problem, is considered to deal with a GDMUU problem where individuals of a group express their degree of optimism in terms of attitudinal characters. We first find the extreme points corresponding to the attitudinal character and then solve a quadratic mathematical program which minimizes a squared distance from each extreme point identified. Thus the resulting OWA operator weights for the group are located at the center of the weights-space constructed by attitudinal characters. This idea is further extended to deal with uncertain attitudinal character expressed in the form of interval in situations where it is difficult to reliably obtain a precise attitudinal character due to time pressure and a limited domain knowledge and so on.     

Reprint of: A common-pool resource experiment with postgraduate subjects from 41 countries

This study reports results from a new series of experiments that examine the robustness of face-to-face communication as a cooperation-facilitating institution in common-pool resource settings. Results are reported from nine experiment sessions, initially designed for pedagogical purposes. The sessions were conducted between 1998 and 2007 as part of a series of summer institutes on institutional analysis and environmental change. Subjects were graduate students and professionals from diverse disciplines, representing 41 countries of residence. The participants in this study stand in sharp contrast to most previous studies, which used undergraduates who self-select into experiments by volunteering to participate. Results from these experiments substantiate earlier findings that non-binding communication can serve as an effective mechanism for solving social dilemma problems, with subjects achieving near socially efficient outcomes.     

The role of intermediaries in facilitating trade

This paper documents that intermediaries play an important role in facilitating international trade. We modify a heterogeneous firm model to allow for an intermediary sector. The model predicts that firms will endogenously select their mode of export - either directly or indirectly through an intermediary - based on productivity. The model also predicts that intermediaries will be relatively more important in markets that are more difficult to penetrate. We provide empirical confirmation for these predictions using the firm-level census of China's trade, and generate new facts regarding the activity of intermediaries. We also provide evidence that firms begin to export directly after exporting through intermediaries.     

Analysis of Korean millennials’ travel expenditure patterns: an almost ideal demand system approach

ABSTRACT

Generational cohorts can differ in their consumption patterns and preferred travel behavior. As the millennial generation represents an important economic force and influences new consumption trends, this study utilizes nationwide data and almost ideal demand system (AIDS) approach to examine expenditure patterns of Korean travelers during holidays. In this process, the joint effects of travel-related characteristics are also examined. The results of the AIDS estimation on data from 871 domestic travelers reveal significantly different travel expenditure patterns for cohorts. The findings contribute to furthering the understanding of how different generational cohorts allocate their travel budgets to respective travel expenditure categories.     

Habit Formation in an Overlapping Generations Model with Borrowing Constraints

We introduce habit‐formation in the three‐period OLG borrowing‐constrained framework of Constantinides et al. (2002) by allowing the utility of the middle‐aged (old) to depend on consumption when young (middle‐aged). This specification enables us to separate the effect of the two habit parameters (middle‐aged and old) since each representative age‐group can face different levels of habit persistence. The two‐habit setup underlines some important issues with regards to savings and security returns which do not always conform to the standard findings in the literature. In addition, the model produces equity premium consistent with US data for relatively small levels of risk aversion.     

“最优秀企业”假说？

“木桶理论”也失效了？ 如果把某些事物的各个环节都比做木板，是不是选择那些最长的粘合在一起就可以装足够多的水？ 未必。因为有些木板可能永远无法好好地咬合在一起，无论用什么样强力的胶水。那些勉强贴在一起的个性鲜明的木板，又或者成了彼此最大的败笔。