Investigating the role of festivalscape in culinary tourism: The case of food and wine events

This paper analyses the importance of festivalscapes in determining emotions, satisfaction and future behavior of participants at food and wine events. The study applies a structural equation model (SEM) with latent variables to survey responses of visitors to the “Friuli DOC” Italian festival. The main results are that festivalscape and emotions have significant direct effects on satisfaction, which in turn has a significant effect on behavioral intention. The effects of the festivalscape on visitors' future behavior are only indirect and mediated by satisfaction. Thus, in order to enhance their visitors' behavioral intentions, festival organizers should monitor emotions and satisfaction deriving from the subjective perception of exogenous characteristics as food and wine quality, comfort and entertainment.     

Dynamic risk management

Both financing and risk management involve promises to pay that need to be collateralized, resulting in a financing versus risk management trade-off. We study this trade-off in a dynamic model of commodity price risk management and show that risk management is limited and that more financially constrained firms hedge less or not at all. We show that these predictions are consistent with the evidence using panel data for fuel price risk management by airlines. More constrained airlines hedge less both in the cross section and within airlines over time. Risk management drops substantially as airlines approach distress and recovers only slowly after airlines enter distress.     

Rent seeking and rent dissipation: A neutrality result

We consider rent seeking contests between at least two agents who might value the prize differently. We capture a wide range of institutional aspects of contests by analyzing a class of contest success functions fulfilling several properties. The main properties are anonymity and a condition on the elasticity of a rent seeker's win probability with respect to her effort. We show the existence of a mixed-strategy equilibrium and establish equilibrium payoffs. In this equilibrium complete rent dissipation holds. Our results imply a partial robustness result for the all-pay auction.     

Exclusive contracts and the institution of bankruptcy

Summary. The paper studies the institution of bankruptcy when exclusive contracts cannot be enforced ex ante, e.g., a bank cannot monitor whether the borrower enters into contracts with other creditors. The institution of bankruptcy enables the bank to enforce its claim to any funds that the borrower has above a fixed bankruptcy protection level. Bankruptcy improves on non-exclusive contractual relationships but is not a perfect substitute for exclusivity ex ante. We characterize the effect of bankruptcy provisions on the equilibrium contracts which borrowers use to raise financing.Received: 6 December 2004, Revised: 15 January 2005, JEL Classification Numbers: D82, G33, K29. Correspondence to: Adriano A. RampiniWe thank the seminar participants at Carnegie Mellon, Columbia, Illinois, Minnesota, Northwestern, Pompeu Fabra, Stanford, the CEPR European Summer Symposium in Financial Markets, the NBER Corporate Finance Program Meeting, the SED Annual Meeting, the Texas Finance Festival, the WFA Annual Conference, the Workshop on Information, Financial Markets and the Business Cycle in Rome and the Federal Reserve Bank of Richmond and in particular Marco Bassetto, Alberto Bennardo, Philip Bond, Peter DeMarzo, Andrea Eisfeldt, Michael Fishman, Zsuzsanna Fluck, Denis Gromb, Oliver Hart, Eugene Kandel, John Kareken, Narayana Kocherlakota, Stephan Krasa, Arvind Krishnamurthy, Deborah Lucas, Thomas Noe, Onur Ozgur, Mitchell Petersen, Artur Raviv, Anne Villamil, Jeffrey Zwiebel, and an anonymous referee for helpful comments, and Nisan Langberg for research assistance. Bisin gratefully acknowledges the research support of the National Science Foundation under Grant No. SES-9818844 and the C.V. Starr Center for Applied Economics.     

Capital reallocation and liquidity

This paper shows that the amount of capital reallocation between firms is procyclical. In contrast, the benefits to capital reallocation appear countercyclical. We measure the amount of reallocation using data on flows of capital across firms and the benefits to capital reallocation using several measures of the cross-sectional dispersion of the productivity of capital. We then study a calibrated model economy where capital reallocation is costly and impute the cost of reallocation. We find that the cost of reallocation needs to be substantially countercyclical to be consistent with the observed joint cyclical properties of reallocation and productivity dispersion.     

Tullock and Hirshleifer: a meeting of the minds

We introduce the serial contest by building on the desirable properties of two prominent contest games. This family of contest games relies both on relative efforts (as Tullock’s proposal) and on absolute effort differences (as difference-form contests). An additional desirable feature is that the serial contest is homogeneous of degree zero in contestants’ efforts. The family is characterized by a parameter representing how sensitive the outcome is to contestants’ efforts. It encompasses as polar cases the (fair) lottery and the (deterministic) all-pay auction. Equilibria have a close relationship to those of the (deterministic) all-pay auction and important properties of the latter hold for the serial contest, too.      

New or used? Investment with credit constraints

Used capital is cheap up front but requires higher maintenance payments later on. We argue that the timing of these investment cash outflows makes used capital attractive to financially constrained firms, since it is cheap when evaluated using their discount factor. In contrast, it may be expensive from the vantage point of an unconstrained agent. We provide an overlapping generations model and determine the price of used capital in equilibrium. Agents with less internal funds are more credit constrained, invest in used capital, and start smaller firms. Empirically, we find that the fraction of investment in used capital is substantially higher for small firms and varies significantly with measures of financial constraints.     

Interactions between Brands and CO Labels: The Case of “Bavarian Beer” and “Munich Beer” – Application of a Conditional Logit Model

ABSTRACT

For the past four decades ‘country-of-origin’ (CO) research has been discussing the value of designations such as ‘Made in Germany’ or ‘Made in USA.’ However, published studies have not usually investigated brand-specific effects of ‘country-of-origin’ (CO labels). This article employs a choice experiment in order to analyse the impact of a CO label applied to branded food products. For this purpose, a nationwide survey was carried out in Germany to measure the effect of the geographical indications ‘Bavarian beer’ and ‘Munich Beer’ on brand choice. The results indicate that weak unknown brands can benefit especially from the labeling of geographical indications.