Futures price limit moves as options

This note demonstrates that an asset's price in an environment with price limit rules can be replicated by the price of a portfolio consisting of a riskless asset and two synthetic options. A procedure is developed to unbundle the unobservable option values imbedded in the actual futures price and impute a theoretical true futures price. Using this framework, evidence from the Treasury Bond futures market suggests that theoretical true futures prices diverge from actual futures prices, on average, 3 h prior to the activation of price limit rules, indicating that price limit moves might be predictable. The reversal of both the actual futures prices and the theoretical futures prices back within the limit range after a limit move provides support for the possibility that traders tend to overreact when market prices are near price limits. © 2002 Wiley Periodicals, Inc. Jrl Fut Mark 22:901–913, 2002     

Alienation and moral imperatives: A reply to Kanungo

Rabindra Kanungo's position that alienation at work can be eliminated within capitalism is critically evaluated. My argument is that Kanungo only emphasizes the psychological aspect of Marx's view of alienation. The failure to include the ontological element of alienation results in the confused position that alienation can be eliminated while workers are still being separated from their work by capital. The role that the right to private property plays in the maintenance of this separation is also seen to be a part of Marx's conception of alienation that is missing from Kanungo's analysis. The clarification of Marx's conception of alienation results in the position that organizations within capitalism cannot live up to the moral imperative to be socially responsible in removing alienation at work.Robert T. Sweet is an instructor of Philosophy at the University of Dayton. His research interests include: Marxist philosophy, business ethics, and philosophy of mind. HisMarx, Morality and the Virtue of Beneficence (Peter Lang), was published in November of 1991.     

Bribery and implicit agreements: A reply to Philips

The author has elsewhere defended the view that accepting a bribe involves the violation of an implicit or explicit promise or understanding associated with an office or position that one occupies and that therefore it is prima facie wrong to accept a bribe. Michael Philips has criticized this position in a recent paper. He argues that (a) there are cases in which accepting a bribe violates no promises or agreements, and (b) there are cases in which there is no prima facie duty to refuse an offer of a bribe. The author offers replies to both of these objections.Thomas L. Carson is Associate Professor of Philosophy at Loyola University in Chicago. He was awarded the NEH Fellowship for College Teachers. He is the author of The Status of Morality (D. Reidel, Philosophical Studies Series, 1984), and he has written numerous articles concerning both ethical theory and applied ethics.     

Social contracts and corporations: A reply to Hodapp

In this reply to Professor Hodapp's criticism of my social contract theory, I focus on the misinterpretations I believe Professor Hodapp makes of the social contract tradition as well as my version of the contract. By misinterpreting the underlying purpose of social contract theory, he neglects the contract's heuristic or functional dimension, something that leads him to downplay the importance of the contract as a conceptual catalyst. And by adopting an overly narrow notion of rationality, he imagines circularity where none exists. Later, Professor Hodapp questions the effect of the contract upon individual liberties, and in doing so broaches a critical issue. But I attempt to show that his concerns are eliminated by close attention to the theory itself. Thomas Donaldson is the John A. Largay Scholar, and Professor, at the School of Business, Georgetown University, where he also holds the positions of Adjunct Professor, at the Department of Philosophy, and Senior Research Fellow, at the Kennedy Institute of Ethics. His most recent book is Ethics in International Business (Oxford University Press, 1989).     

Eliciting and estimating reservation price: A semi-compensatory approach

This study proposes a two-stage method to elicit consumers' price acceptability range. The method combines a conjunctive stage to elicit price acceptability limits with a utility-based stage to choose a preferred product variation. The method is efficient in choice situations entailing many multi-attribute product variations under partial information conditions. A semi-compensatory model complements the method by jointly representing the conjunctive stage with multiple ordered-response models and the choice stage with a multinomial logit model. A case study of ceiling reservation price (CRP) elicitation for students' rental apartment choice shows (i) CRP distribution for different product variations, (ii) model estimation unraveling CRP determinants, and (iii) linkage between CRP and transaction price.     

A note on steady-state price:Output relationships

Two sufficient conditions for non-perverse steady-state price: net output relationships are derived: (i) weak substitutability of each produced input, both with respect to other produced inputs and with respect to primary factor inputs, and (ii) constancy of the produced-input: output coefficients.     

Supplier price concessions: A longitudinal empirical study

The competitive nature of today’s business-to-business markets requires companies to continually look for ways to reduce costs; one of the easiest of which is to demand price reductions from suppliers. In this research, price reduction demands and the corresponding concessions given by 238 suppliers to the six major North American Automotive original equipment manufacturers during 2001–2007 are analyzed utilizing a simultaneous equation model. The three stage least squares estimates indicate that suppliers are willing to give higher price concessions when buyers align specific interfacing characteristics and processes with their suppliers so that the suppliers perceive greater opportunities for future business and profit. These results provide, for the first time, an understanding of the dynamic nature of the impact of buyer–supplier relational components on supplier price concessions.

A reply to professors Metcalfe and Steedman

This reply argues that those points raised by Metcalfe and Steedman which are valid were in fact axiomatic to my original paper. Thus, when properly interpreted, their comments simply reinforce my conclusions. Three new propositions are presented in the course of the argument.     

Substitution between revenue futures and price futures contracts: A note

In recent years, commercial interest has been expressed in agricultural revenue insurance instruments. Participating parties may look to futures markets to offset assumed positions. In this note, conditions are identified such that revenue futures contracts are perfect substitutes for price futures contracts. If these conditions approximate reality, then it would seem questionable whether sufficient interest would exist to sustain markets in both futures contracts. © 2002 Wiley Periodicals, Inc. Jrl Fut Mark 22:387–391, 2002