Learning competitive market balance

Summary We exhibit a quite natural, adaptive process generated by price-taking, noncooperative firms, supplying the same market. Under rather mild conditions, that process, being driven by marginal profits, converges to a market clearing, Cournot-Nash equilibrium. Namely, it suffices for convergence that cost functions be strictly convex and that the law of demand holds. Randomness in revenues and costs is accommodated.Support from Ruhrgas is gratefully acknowledged.     

Corporate smart phones: professionals' conscious engagement in escalating work connectivity

This article explores how the adoption of company sponsored smart phones inflicts upon the lives of professionals. Drawing upon qualitative interviews at a law firm in Brazil, the experiences of new smart phone users are reported upon in detail. Increased accessibility, accuracy and speed in exchanges gave the users a sense of autonomy and flexibility. However, the technology also helped to intensify the organisation's hold on employees outside of regular working hours, reaching into new settings, time slots and social contexts. Employees expressed concerns regarding demands from superiors that negatively affected their private spheres, yet many of them paradoxically requested more efficient smart phone connectivity. The article focuses on the justifications, the different narrative strategies, employed by professionals for their conscious engagement in escalating work connectivity. It is suggested that these justifications display users' attempt to ‘dis‐identify’ with the role and practice they perform.     

Will FinTech make regional banks superfluous for small firm finance? Observations from soft information-based lending in Germany

Regional banks have a competitive advantage in that short distances to clients enable the use of soft information for superior lending decisions. If the ambition of FinTech start-ups to create superior screening and monitoring technologies materialises, this advantage would be diminished and regional banks would become superfluous for small firm finance. To explore this claim, the paper in hand analyses qualitative empirical data about the lending processes and rating system use of regional German savings banks. In essence, the results from participant observation and interviews clarify the importance of “real” soft information for critical lending decisions. The context specificity and limited verifiability of “real” soft information hamper it from being hardened through the use of rating systems and other bank-ICT. Though FinTech's scoring technologies may overcome the first limitation, it appears likely that in the course of scoring development “real” soft information will be systematically crowded out due to the manipulation problem. The paper expects improved access to finance for SMEs if FinTech solutions overcome both limitations of “real” soft information use, or if peer-to-peer lending and regional banks coexist. Deteriorated access to finance is expected if FinTech companies displace the relationship banking of regional banks due to enhanced competition, without preserving the advantages of “real” soft information with superior screening and monitoring technologies. The paper concludes with recommendations on how to prevent deteriorated access to finance for small firms by promoting fair competition and FinTech innovations.     

The effects of property and landowner characteristics on profit efficiency in salmon angling tourism in Norway

This paper analyzes how different property and landowner characteristics and other factors affect landowners’ profit efficiency from salmon angling tourism. The paper helps correct a lack of studies on the economic aspects of the triple bottom line approach to sustainability and suggests new areas of rural tourism research. A stochastic profit frontier function with an inefficiency module was estimated based on survey responses from 203 landowners along four Mid-Norway rivers. Profit efficiency decreased as the revenues from off-property and on-property activities increased relative to angling tourism. Factors increasing efficiency were long-term renting of fishing instead of permit sale or selling fishing packages with additional services and common property ownership instead of simple fee ownership. Cooperation, by merging several fishing rights into one unit rather than fishing on a single property basis, decreased efficiency. This study did not distinguish between different forms of cooperation; mandatory cooperation in the form of common property and voluntary cooperation between private properties are issues for further research. If sustainable economic efficiency is a public goal, policies should ensure a predictable economic environment for landowners specializing in salmon angling tourism and promote long-term renting, with a 10-year minimum period for the lease of fishing rights.     

Portfolio management without probabilities or statistics

Considered here is on-line portfolio management aimed at maximizing the long-run growth of financial wealth. The portfolio is repeatedly rebalanced in response to observed returns on diverse assets. Suppose statistical information and related methods are not available—or deemed too difficult. On that assumption this paper explores how an adaptive procedure, which totally dispenses with statistics and associated competence, nonetheless may solve the problem over time.     

Stock Market Reaction to Monetary Policy: An Event Study Analysis of the Brazilian Case

This article examines the relationship between the monetary policy implemented by the Central Bank of Brazil and the stock market. We implement event study analysis and analyze the effect of the anticipated and unanticipated components of monetary policy decisions on the returns of the IBOVESPA index and 53 stocks. We find that monetary policy has a significant effect on the stock market, but is only responsible for a small proportion of market variation. The analysis at the sector level with expected returns identifies that the financial sector is the most affected by this policy, whereas with excess returns only industrial goods are significantly affected. Moreover, individual assets respond in a rather heterogeneous fashion to monetary policy; however, when we look at excess returns, we identify a reduction in the intensity and in the number of companies impacted by monetary policy. Finally, the monetary shock is explained by unanticipated variations in the unemployment rate, in the Industrial Production Index, in the General Market Price Index, and in the Broad Consumer Price Index.     

Economic Growth Evens Out Happiness: Evidence from Six Surveys

In spite of the great U‐turn that saw income inequality rise in Western countries in the 1980s, happiness inequality has fallen in countries that have experienced income growth (but not in those that did not). Modern growth has reduced the share of both the “very unhappy” and the “perfectly happy.” Lower happiness inequality is found both between and within countries, and between and within individuals. Our cross‐country regression results suggest that the extension of various public goods helps to explain this greater happiness homogeneity. This new stylized fact arguably comes as a bonus to the Easterlin paradox, offering a somewhat brighter perspective for developing countries.     

Operations in banking: the service quality and effects on satisfaction and loyalty

This paper studies the service quality provided by the banks. The objectives are (i) to identify which aspects of the transactions carried out by the banks are important for the service quality perceived by the customers, taking into account some aspects that are sometimes ignored (online channels) and (ii) to observe how service quality influences customer satisfaction and how customer satisfaction affects the loyalty towards the bank. Using a factor analysis, the research identifies the operative, physical, new technologies and human factors. Next, using structural equations models with AMOS, the results show an influence of the operative aspects and the new technologies on service quality, as well as the confirmation of quality as a precedent to customer satisfaction, and how such satisfaction influences on customer's loyalty towards the bank.     

The Forward Premium in the Nord Pool Power Market

This article investigates the forward premium of futures contracts in the Nordic power market for the time period from January 2004 to December 2013. We find that futures prices are biased predictors of the subsequent spot prices and that there is a significant forward premium in the Nord Pool market, particularly during the winter and autumn. We analyze the impact from several factors on the forward premium. The spot price, and the deviation of water inflow from its usual level, positively affect the forward premium. The variance of the spot price also has a positive effect on the forward premium, but only for the contract closest to delivery.