Interannual Climate Variation, Climate Prediction, and Agricultural Trade: the Costs of Surprise versus Variability

Agriculture remains sensitive to variation in rainfall and temperature. Fortunately, our ability to predict the lower frequency variation in the earth's atmosphere is increasing rapidly. While information cannot affect the underlying source of variability, it allows unexpected shocks to be anticipated and acted upon. This paper develops and analyzes an intertemporal Ricardian trade model with Bayesian beliefs. Results in this paper show that improved climate prediction reduces expected prices, but increases price variability. In addition, trade is crucial to realizing the potential benefits of climate prediction. The value of climate prediction is highest with both storage and trade, and falls by over 300% when a country is in autarky.     

Copyright Damages and Statistics

This paper discusses the statistical issues that arise in conducting an economic damages analysis in the context of a litigation matter involving copyrights. Calculating damages in copyright cases turns out to be a natural application for econometric modelling methods. Surprisingly, elementary statistical issues can be a source of significant debate between the experts in such matters. In this paper, we present a case study and illustrate how issues such as interpretation of p -values and what "rejection of the null hypothesis" really "means" in such matters.     

Domestic Support and Border Measures for Processed Horticultural Products

In horticultural markets, trade barriers often apply to the processed products whereas domestic support applies to farm-produced raw commodities. Here we assess the effects of such trade barriers and domestic support by simulating the effects of policy reform on global processing tomato markets, which are faced with modest processed product tariffs and high domestic support in the European Union (EU). Both protection and EU subsidy drive down world welfare, but we find that reducing import tariffs for tomato products would yield greater effects on markets and larger welfare impacts outside Europe than would reductions in EU domestic support.     

Mutual Fund Advisory Contracts: An Empirical Investigation

We investigate marginal compensation rates in mutual fund advisory contracts and find the following. Equity and foreign fund advisors receive higher marginal compensation than debt and domestic fund advisors. Advisors of funds with greater turnover receive higher marginal compensation. Also, closed-end fund advisors receive higher marginal compensation than open-end fund advisors. Finally, we find that marginal compensation is lower for advisors of large funds and members of large fund families. We argue that these differences in marginal compensation reflect differences in advisor marginal product, differences in the difficulty of monitoring performance, differences in control environments, and scale economies.     

B‐TO‐B E‐COMMERCE: A CONTENT ANALYTICAL ASSESSMENT OF MOTOR CARRIER WEBSITES

An Internet presence is a critical early component in the process of building towards a fully operational and unified e‐commerce strategy. E‐commerce has significantly impacted logistics/supply chain strategies and the development and implementation of a website have become key issues for many firms within the transportation industry. This study provides an overview of website content within the motor carrier industry. Content analysis was used to assess the site design, informational content, and the interactive content of 152 motor carrier websites, and to compare the features offered on the Top 100 motor carrier firm websites with those offered on the sites of smaller carrier firms.     

Making Sense of the Comparative Advantage Gains from Trade: Comment on Batra

This paper addresses Ravi Batra’s (2002 ) criticism of the basic comparative advantage gains‐from‐trade model. While Batra’s criticism is based on the selection view interpretation of real income, the gains from trade can only be properly understood from the options view interpretation of real income. I also show how a recent empirical implementation of the gains‐from‐trade model defies Batra’s claim that “the consumption gain . . . is not subject to measurement” (2002, p. 642).     

The interplay between home and host institutions on CBA ownership decision

Cross-border acquisitions (CBAs) are one of the key strategies for internationalization. However, most of what is known about CBA strategies relies on the effects of the host country's environment or the home country's conditions. In this article, we analyze the interplay between these two important factors. We show that companies from less institutionally developed countries are more influenced by poor institutional conditions found in host countries. We analyzed a dataset of 1,390 cross-border acquisitions performed by Latin American firms. The literature on the subject points out that less developed host environments lead to fewer shares of ownership acquired in CBAs. However, we confirmed that the quality of the home country's institutional environment positively moderates the effects of the host environment over ownership choice in the acquisition. This effect is due to companies from less developed environments being able to use their embedded capabilities to better navigate faulty institutional environments abroad.     

Infrastructure and Industrial Development: The Case of Central Java

Industrial development does not take place in all regions at the same speed. This paper seeks explanations for regional differences in the development of manufacturing industry in Central Java. Special attention is paid to the impact of infrastructure (roads, telecommunications, electricity) on industrial development. The spatial distribution of manufacturing industry is analysed by means of both secondary data at the kabupaten level and primary data on 274 firms in various parts of Central Java. In addition to demand side factors, infrastructure does indeed play an important role, but local government bureaucratic procedures for obtaining land and permits are also important.     

Fake Sales: A Dynamic Pricing Perspective

Some sellers display high “regular” prices, but mark down these prices the vast majority of the time, advertising the good as “on sale” or “discounted”. This note suggests a framework for understanding the practice, emphasising the role of buyer uncertainty about their future valuations for the good. We argue that so‐called “regular” prices set buyers’ expectations regarding future prices, expectations that need not be tethered to the prices actually set. By manipulating upwards buyers’ expectations of future prices, the seller can increase demand for the good at the current “sale” price, increasing profits.     

Absenteeism and Undergraduate Exam Performance

The author investigates the relationship between students' absenteeism during a principles of microeconomics course and their subsequent performance on exams. Records were maintained regarding the specific class periods that each student missed during the semester. Records were also kept of the class meeting when the material corresponding to each multiple-choice test question was covered. A qualitative choice model reveals that students who missed class on a given date were significantly more likely to respond incorrectly to questions relating to material covered that day than students who were present.