State‐Led Financial Regulation and Representations of Spatial Fixity: The Example of the Spanish Real Estate Sector

This article offers a bottom‐up contribution to the fixity–motion literature. It aims to unravel the apparent contradiction of real estate spatial fixity in Spain, which is portrayed both as a barrier to accumulation and as a unique source of investment by different capitalist actors. Empirically, it describes the shifts in real estate ownership and changes in profit‐making strategies that have taken place across the real estate sector during the crisis years, and the role of the state in these shifts. The article asserts that the idea of spatial fixity representing a spatial barrier for accumulation does not necessarily apply in the Spanish case. It further claims that the tensions in capital circulation through real estate are not only to be found in the action of time, but in different state strategies pursued by various actors. The opposing representations of fixity are the result of state regulation of interest rates, taxation and risk weighting. The state also increasingly promotes land rents as a source of liquidity creation.     

From the Nation-State to a World Society: An Institutional Reading of Globalization

This article highlights the inadequacy of classical and neoclassical theories for understanding the set of changes experienced by economic systems in their process of development. The institutional dimension concerning the issue of well-defined rules (through the introduction of economic policies) and involving all stakeholders in the regulatory process (starting from the firm), seems to better interpret micro- and macro-economic aspects of the evolving capitalist model. This means questioning the complicated economic governance and society in the transition from the nation-state to a world society (or world state).     

Online marketing: When to offer a refund for advanced sales

Advance selling is a marketing strategy commonly used by online retailers to increase sales by exploiting consumer valuation uncertainty. Recently, some online retailers have started to allow refunds on products sold in advance. On the one hand this reduces the net advance sales, but on the other hand it allows a higher advance sales price. This research is the first to explore the overall effect of allowing a refund on profits from advance sales, identifying conditions where advance selling with or without refunds (or no advance selling at all) is best. We analytically compare the profits of three advance selling strategies: none, without refund, and with refund. We show that selling in advance and allowing a refund is optimal for products with a relatively small profit margin and small strategic market size, and that the added profit can be considerable. Our results guide managers in selecting the right advance selling strategy. To facilitate this, we graphically display, based on the two dimensions of regular profit margin and strategic market size, under what conditions the different strategies are optimal.     

Bidding for Firms with Unknown Characteristics

When a region successfully attracts a firm by offering subsidies, the firm often commits itself to performance targets in terms of employment. In this paper, we interpret these firm‐specific targets as a consequence of incomplete information. We analyze a model of two regions that compete for a firm, assuming that the firm's productivity is ex ante unknown. We show that performance targets often induce overemployment in high‐productivity firms, and that tax credits are often superior to lump‐sum payments. Moreover, when regions differ in wage rates, the low‐wage region wins the bid and has a higher surplus than under complete information. Finally, we show that, under incomplete information, bidding might not lead to efficient firm location.     

Growth,Distribution, and External Constraints: A Post-Kaleckian Model Applied to Brazil

ABSTRACT

The purpose of this research is to analyze whether the Brazilian economy behaved under a wage-led or profit-led regime between 1960 and 2011, considering a Post-Kaleckian model in a context of external constraints. The time span is limited by data availability (i.e., 2011). To answer the question of whether the Brazilian economy works under a wage-led or profit-led regime, we propose a simple Post-Kaleckian model. The model suggests that a profit-led regime is more probable for Brazil. Moreover, a wage-led regime occurs when a balance of payments constrained growth model is taken into consideration. Likewise, the real exchange rate has a positive impact on economic growth through the export channel. This result is a novelty in the recent literature about the relationship between real exchange rate and economic growth within a Post-Kaleckian model. The Brazilian economy was chosen as it is one of the biggest economies in Latin America.     

Individually rational rules for the division problem when the number of units to be allotted is endogenous

We study individually rational rules to be used to allot, among a group of agents, a perfectly divisible good that is freely available only in whole units. A rule is individually rational if, at each preference profile, each agent finds that her allotment is at least as good as any whole unit of the good. We study and characterize two individually rational and efficient families of rules, whenever agents' preferences are symmetric single-peaked on the set of possible allotments. Rules in the two families are in addition envy-free, but they differ on whether envy-freeness is considered on losses or on awards. Our main result states that (a) the family of constrained equal losses rules coincides with the class of all individually rational and efficient rules that satisfy justified envy-freeness on losses and (b) the family of constrained equal awards rules coincides with the class of all individually rational and efficient rules that satisfy envy-freeness on awards.     

Dynamic management of aircraft stand allocation

This paper aimed to present an original approach for solving the aircraft stand allocation (SA) problem dynamically when due to operational disturbances, the planned allocation cannot be accomplished. The proposed Multiple-criteria Dynamic Stand Allocation (MDSA) method uses fuzzy logic to support decision-making under uncertainty. The MDSA method provides effective solutions in a short time, necessary for traffic management in case of delays, emergency, and untypical cases. It considers partially conflicting points of view of different airport users (airport managers, air traffic controllers, airlines, handling agents, and passengers) and may significantly support managers on the SA problem. The approach proposed can also be used for creating an initial SA plan for a considerable number of aircraft.     

Periodic strategies in optimal execution with multiplicative price impact

We study the optimal execution problem with multiplicative price impact in algorithmic trading, when an agent holds an initial position of shares of a financial asset. The interselling decision times are modeled by the arrival times of a Poisson process. The criterion to be optimized consists in maximizing the expected net present value of the gains of the agent, and it is proved that an optimal strategy has a barrier form, depending only on the number of shares left and the level of the asset price.     

An extended likelihood framework for modelling discretely observed credit rating transitions

The estimation of the parameters of a continuous-time Markov chain from discrete-time observations, also known as the embedding problem for Markov chains, plays in particular an important role for the modeling of credit rating transitions. This missing data problem boils down to a latent variable setting and thus, maximum likelihood estimation is usually conducted using the expectation-maximization (EM) algorithm. We illustrate that the EM algorithm is likely to get stuck in local maxima of the likelihood function in this specific problem setting and adapt a stochastic approximation simulated annealing scheme (SASEM) as well as a genetic algorithm (GA) to combat this issue. Above that, our main contribution is to extend our method GA by a rejection sampling scheme, which allows one to derive stochastic monotone maximum likelihood estimates in order to obtain proper (non-crossing) multi-year probabilities of default. We advocate the use of this procedure as direct constrained optimization (of the likelihood function) will not be numerically stable due to the large number of side conditions. Furthermore, the monotonicity constraint enables one to combine structural knowledge of the ordinality of credit ratings with real-life data into a statistical estimator, which has a stabilizing effect on far off-diagonal generator matrix elements. We illustrate our methods by Standard and Poor’s credit rating data as well as a simulation study and benchmark our novel procedure against an already existing smoothing algorithm.     

How Owners Matter? An Examination of Ownership Type in Corporate Disaster Relief Giving

Little research has investigated the effect of ownership identity (or type) and corporate philanthropy experience on giving. In this research, relying on legitimacy theory, we first assess the effect of ownership identity on corporate philanthropy (CP) in the context of the 2008 earthquake in China. Then we explore moderation effects of firms' prior CP experience and size as proxies for perceived legitimacy on owners' efforts at increasing giving and legitimacy. We find that state and CEO ownership are deterrents, while non‐SOE and institutional ownership enhances giving probability and amount. In addition, there is evidence that firm size and prior CP weaken the effects of institutional ownership on CP. This study provides a complete assessment of owner behaviour. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.