Parental altruism, life expectancy and dynamically inefficient equilibria

This paper presents a continuous time overlapping-generation (OLG) model which generalizes the Blanchard–Buiter–Weil model and clarifies the relationships between dynastic altruism, the length of planning horizons, and dynamic inefficiency. Our main innovation relies on the introduction of parental altruism, whose intensity is variable. We first show that parental altruism and life expectancy do favor overaccumulation. Second, we give a condition that explains why the Ramsey model may only display dynamic efficiency. These theoretical results are illustrated by a parameterization from US data. Our numerical exercises suggest that the US economy is dynamically efficient, mainly because of the shortness of life expectancy.     

Do Consumers Acculturated to Global Consumer Culture Buy More Impulsively? The Moderating Role of Attitudes towards and Beliefs about Advertising

This research advances knowledge that can foster understanding of how global consumer culture (GCC) and its elements relate to impulsive buying and sheds light on how advertising attitudes and beliefs interact with this main relationship. Specifically, this study examines the moderating effects of attitudes towards and beliefs about advertising on the relations between consumers’ level of acculturation to global consumer culture (AGCC) and impulsive buying. Consumers who are the most acculturated to GCC, and who have positive attitudes towards and beliefs about advertising, buy the most impulsively. AGCC is related to increased impulsive buying, even when attitudes towards and beliefs about advertising are negative. The article contributes to the development of a theoretical explanation of these understudied relations by employing acculturation theory and congruity theory. Social and practical implications are discussed.     

Consumer Confusion Over the Significance of Meat Attributes: The Case of Veal

Animal scientists today can produce pale colored grain-fed veal, thus achieving a high quality grade, while averting concerns over unethical treatment of milk-fed calves and excessive antibiotic use in milk-fed veal production. It is feared, however, that consumers may reject pale cuts of veal labeled as Grain-fed. Random parameter logit analyses of data from repeated choice experiments conducted in six suburban supermarkets in Quebec (n = 1027) revealed that intrinsic color of veal meat and extrinsic labeling of production method may significantly influence product choice; however, the direction of effects were inconsistent across ethnic and non-ethnic consumers and between experienced and non-experienced consumers of veal meat. Price effects were significant, but with a positive mean and a large standard deviation, indicating that, for many consumers, price may act as an surrogate indicator of veal meat quality. Older freshness dates were significantly discounted. It thus appears that most consumers will not categorically reject pale veal meat with a grain-fed label.     

Implied volatility and skewness surface

The Homoscedastic Gamma (HG) model characterizes the distribution of returns by its mean, variance and an independent skewness parameter. The HG model preserves the parsimony and the closed form of the Black–Scholes–Merton (BSM) while introducing the implied volatility (IV) and skewness surface. Varying the skewness parameter of the HG model can restore the symmetry of IV curves. Practitioner’s variants of the HG model improve pricing (in-sample and out-of-sample) and hedging performances relative to practitioners’ BSM models, with as many or less parameters. The pattern of improvements in Delta-Hedged gains across strike prices accord with predictions from the HG model. These results imply that expanding around the Gaussian density does not offer sufficient flexibility to match the skewness implicit in options. Consistent with the model, we also find that conditioning on implied skewness increases the predictive power of the volatility spread for excess returns.     

Capacity dynamics and the formulation of the airport capacity/stability paradox: A European perspective

Access to capacity is often considered to be uncertain, causing airlines to build buffer times into their flight schedules in anticipation of potential delays. Similarly, air navigation service providers use capacity buffers to overcome potential safety standard violations. However, the use of excessive buffers is detrimental to cost efficiency in the air transport system. This paper improves our understanding of capacity predictability. The concepts of capacity dynamics and stability are taken as integral parts of an airport's plan to mitigate the risk of capacity degradation. Based on the concepts of capacity dynamics and stability, the capacity/stability paradox is introduced and discussed.     

Europe's R&;D: Missing the Wrong Targets?

Europe is not delivering on its commitment under the Lisbon agenda to increase its R&;D-to-GDP ratio to 3% by 2010. But does the European Commission's practice of benchmarking each and every member state against the headline 3% figure make sense? R&;D intensity is influenced by industrial specialisation, but also by other factors such as a large integrated market for technology and a favourable environment for academic research. What can be done by the EU and by the governments of the member states to improve the situation?     

Wage Setting, Wage Curve and Phillips Curve: The Italian evidence

The purpose of this paper is to investigate some issues of wage setting in order to assess if nominal inertia and wage flexibility characterise the Italian supply side, using multivariate cointegration models. Our estimates indicate that an explicit distinction between stationary and non-stationary variables and a joint analysis of long-run and short-run structure is crucial for achieving clearer results. To this end, we use quarterly time series data for industry sector 1976:1–1993:4. Interesting results have been found concerning the empirical evidence of a long-run wage curve and the existence of a Phillips curve, through adopting alternative order reduction of the I(2) wage and price variables. Moreover, some insights on regional (North-South) unemployment effects are pointed out and discussed.