Social aspirations in European banks: peer-influenced risk behaviour

We test a sample of 3,586 banks from 33 European countries to determine whether performances above or below a social aspiration level (median performance of peer banks) influence banks’ aggregate risk levels. Our results are consistent with the behavioural theory of the firm and prospect theory in that we find that bank performance below a bank’s social aspiration level is followed by increased aggregate risk, i.e. risk-taking behaviour in the subsequent year. Although under-performing banks tend to be risk-takers, large banks and banks with high aggregate risk levels tend to limit the increase in their aggregate risk levels.     

Stock market volatility forecasting: Do we need high-frequency data?

The general consensus in the volatility forecasting literature is that high-frequency volatility models outperform low-frequency volatility models. However, such a conclusion is reached when low-frequency volatility models are estimated from daily returns. Instead, we study this question considering daily, low-frequency volatility estimators based on open, high, low, and close daily prices. Our data sample consists of 18 stock market indices. We find that high-frequency volatility models tend to outperform low-frequency volatility models only for short-term forecasts. As the forecast horizon increases (up to one month), the difference in forecast accuracy becomes statistically indistinguishable for most market indices. To evaluate the practical implications of our results, we study a simple asset allocation problem. The results reveal that asset allocation based on high-frequency volatility model forecasts does not outperform asset allocation based on low-frequency volatility model forecasts.     

Who Convinces Whom? Parent and Child Perceptions of Children's Engagement in Parental Purchase Decisions

Do children overestimate their engagement in parental purchase decisions? A systematic analysis of the articles enabled us to create a database of 149 cases where child and parent perceptions of children's engagement in parental purchase decisions were measured. The findings proved that there is congruence between children's and parents' perception of a child's engagement in most cases. Children's overestimation of their engagement in a parental decision to purchase products is likely the exception rather than the rule. The cases characterized as overestimations are related to product category and type of measured domain. (Children tend to overestimate their engagement more when the measures track participation or influence rather than decision independence.)     

Social Ties and the Demand for Financial Services

This paper studies the importance of social interactions for the adoption of financial services among young adults. Specifically, we investigate whether, how, and why financial decisions among interacting agents are correlated. We exploit a unique dataset of friendship networks in the United States and a novel estimation strategy that accounts for possibly endogenous network formation. We find that not all social contacts are equally important: only long-lasting relationships influence financial decisions. Moreover, this peer influence exists only in cohesive social structures. This evidence is consistent with an important role of trust in financial decisions. When agents consider whether or not to adopt a financial instrument, they face a risk and may place greater value on information coming from agents they trust. These results can help explain the importance of face-to-face social contacts for financial decisions.     

Migration,Friendship Ties,and Cultural Assimilation

We study immigrant assimilation by analyzing whether friendship with natives is a measure of cultural assimilation, and by investigating the formation of social ties. Using the German Socio‐Economic Panel, we find that immigrants with a German friend are more similar to natives than those without German friends, along several important dimensions, including concerns about the economy, an interest in politics, and a host of policy issues. Turning to friendship acquisition, we find that becoming employed, time spent in the host country, the birth of a child, residential mobility, and additional education acquired in the host country are significant drivers of social network variation.     

Dreaming of the West: The power of the brand in Soviet Lithuania, 1960s–1980s

Abstract

The article reveals the interest in foreign trademarks observed in Lithuanian society from the 1960s through the 1980s, when the demand for brand names spread after Western culture reached the Soviet Union. The consumption of Western cultural products, or imitations thereof, became one of the key symbolic expressions of freedom in Soviet society. In Lithuania, the most popular clothes were those bearing fake trademarks, even though Soviet authorities attempted to prevent the desire for and the wearing of these garments through the use of ideological tools.     

The Cinderella moment: Exploring consumers' motivations to engage with renting as collaborative luxury consumption mode

Past literature argued that the purchase of luxury goods is driven by people's motivation to conform or fit into our economic and social system. In this study, the authors focus on a new aspect of consumption, that is, renting instead of purchasing luxury goods, backed by the emerging opportunities of sharing economy platforms. Drawing upon the analysis of spontaneous consumers' online communications (in the form of tweets), this study aims to investigate the motivations to engage with luxury garment renting within a collaborative consumption context. To this end, a series of automatic content analyses, via two studies, were conducted using the tweets posted with respect to the Run the Runway collaborative consumption platform. Results demonstrate consumers' increased willingness to show their social status through renting rather than owning luxurious apparel based on five main motivators (need to wear new clothes for a special event, inspirations created by the products/brands, possibility to explore a new way of consuming luxury goods, need to make more sustainable choices, and to increase the life cycle of each luxury product). The implications of these findings are discussed, while they pave the way for future research in collaborative consumption of luxury retailing.