Can Anchoring and Loss Aversion Explain the Predictability of Housing Prices?

We offer an explanation of why changes in house price are predictable. We consider a housing market with loss‐averse sellers and anchoring buyers in a dynamic setting. We show that when both cognitive biases are present, changes in house prices are predicted by price dispersion and trade volume. Using a sample of housing transactions in Hong Kong from 1992 to 2006, we find that price dispersion and transaction volume are, indeed, powerful predictors of housing return. For both in and out of sample, the two variables predict as well as conventional predictors such as the real interest rate and real stock return.     

The role of relational orientation as measured by face and renqing in innovative behavior in China: An indigenous analysis

Following an indigenous approach, the relationship of the relational orientation of Chinese employees with their innovative behavior is evaluated in China with a cross-level design. Based on relevant research and theorizing, relational orientation is tapped by two core elements, face and renqing (compassion for others). As expected, relational orientation is positively related to fear of failure, but negatively related to innovative behavior. The positive relationship between relational orientation and fear of failure, and the negative relationship between fear of failure and innovative behavior, are weaker when innovative climate is high. Theoretical and applied implications of the findings are discussed.     

Is blockchain technology a watershed for tourism development?

ABSTRACT

The rise of blockchain technology could radically disrupt the global economy. As an emergent technology, blockchain is of broad and current interest in the tourism industry. Small island economies are at the forefront of adopting this digital asset and technology. For instance, the Caribbean economies are launching their first digital legal tender, and Aruba is developing a blockchain platform to boost tourism revenue. Given the velocity of adoption, blockchain technology holds significant implications for tourism development. This research letter provides a discourse on the adoption of blockchain technology among small island economies concerning the opportunities and potential challenges faced and offers practical implications for tourism stakeholders.     

Foreign Participation in Housing Development in Mainland China: Legal Concerns on Property Ownership

Since the economic reform in the 198Os, real property development, especially in the housing sector, has become one of the major economic activities in mainland China. Housing development was commercialized initially for the overseas market, particularly for the Chinese emigrants, as foreign capital was much needed. Under the new socialist market economy, a clear legal definition is still to be established for ownership of real property, which is a crucial issue for any real property development. This paper critically reviews the evolving concept of property ownership and evaluates the major pieces of legislation that govern participation of foreign investors in "commodity units" housing development. A critical evaluation highlights the legal concerns that hinder foreign involvement in "commodity unit" housing development.     

Knock‐in American options

A knock‐in American option under a trigger clause is an option contract in which the option holder receives an American option conditional on the underlying stock price breaching a certain trigger level (also called barrier level). We present analytic valuation formulas for knock‐in American options under the Black‐Scholes pricing framework. The price formulas possess different analytic representations, depending on the relation between the trigger stock price level and the critical stock price of the underlying American option. We also performed numerical valuation of several knock‐in American options to illustrate the efficacy of the price formulas. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:179–192, 2004     

Anatomy of option features in convertible bonds

Several earlier theoretical studies on the optimal issuer's calling policy of a convertible bond suggest that the issuer should call the bond as soon as the conversion value exceeds the call price. However, empirical studies on actual cases of calling by convertible bond issuers reveal that firms “delayed” calling their convertible bonds until the conversion value well exceeded the call price. In this paper, we construct valuation algorithms that price risky convertible bonds with embedded option features. In particular, we examine the impact of the soft call and hard call constraints, notice period requirement and other factors on the optimal issuer's calling policy. Our results show that the critical stock price at which the issuer should optimally call the convertible bond depends quite sensibly on these constraints and requirements. The so‐called “delayed call phenomena” may be largely attributed to the underestimation of the critical call price due to inaccurate modeling of the contractual provisions. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:513–532, 2004     

Inner hybridity in the city: Toward a critique of multiculturalism

Muddled as an idea and flawed as a public policy, multiculturalism in Canada advocates conformity to a unitary culture in the public place and tolerance of diverse cultures in the private place. This tolerance of cultural heterogeneity in the sphere of the intimate is often upheld as a defining characteristic of Canadian society. Yet multiculturalism is not without criticisms. For one, multiculturalism is at odds with the desire of the children and grandchildren of the Chinese immigrants in Canada to adapt themselves to their host society, thus transforming themselves as well as the larger society. A multicultural policy that continues to hark back to the past turns a blind eye to the fierce generation and gender politics within the Chinese family. Neither does the multicultural policy square well with a more progressive social theory of self, identity, and culture that is cognizant of the duality of the psychological make‐up of human beings: that one looks backward and forward, committed to preserving roots of the past and exploring routes to the future. As such, the Canadian multicultural policy suffers in a two‐fold way: empirical and theoretical. A possible way out is to pursue a Hegelian dialectics that sees culture as an aftermath of a collision of dissimilar cultures, a kind of forced entanglement of things different We need a new urban social theory that sees integration, fusion, and hybridization—not assimilation, and not cultural pluralism—as possible and desirable outcomes. This is a completely different vision of society altogether, a kind of Utopia. We need a public policy that sees a distinct promise of the city in designing institutions and public spaces that promote hybridism in the mind, an inner deliberation, a mental turmoil—which is not afraid of confronting modern life's many moments of contradictions, ironies and paradoxes.     

Role portrayal in advertising and editorial content,and eating disorders: an Asian perspective

Researchers have postulated that exposure to images of thin ‘ideal body’ women portrayed in advertising and editorial content on television and in magazines contributes to eating disorders among female college students in Western countries. The central aim of this study is to examine the relationship between such advertising and editorial, and self- reports of eating disorder and body image dissatisfaction among Hong Kong females. The Eating Attitude Test (EAT) and Body Dissatisfaction subscale in the Eating Disorder Inventory are employed in a survey of females in Hong Kong. The analysis indicates that overall media consumption is a positive predictor of eating disorder and body image dissatisfaction. Several policy recommendations and suggestions for future research are made.     

Settling the debate on multinational capital structure using the CEPR measure

Portfolio theory suggests that because of diversification benefits, multinational corporations (MNCs) should have lower risk and therefore could have more debt. Empirical studies, however, have repeatedly shown that MNCs from the US face higher risks and have lower debt levels. Burgman (1996) suggests that agency costs as well as political and exchange rate risks are the explanation. Kwok and Reeb (2000) explain this puzzle, presenting an upstream-downstream hypothesis suggesting that MNCs from emerging markets reduce their risk by going international (they go to safer markets), while firms from developed countries increase their risk by going abroad (they go to riskier markets). By introducing a new measure of Country Export Partner Risk (CEPR), we show that the weighted average risk level of a country's export trading partners is negatively related to the leverage of its multinationals, thus confirming the upstream-downstream hypothesis. Furthermore, once controlling for CEPR, we find that the multinationality of the firm is positively related to leverage, thus lending support to the traditional diversification argument. Our findings, therefore, help settle the debate between these two opposing streams of multinational capital structure literature.