A few bad apples: Communication in the presence of strategic ideologues

I propose a very simple model of strategic communication. The motivation is to help explain widespread persistent disagreement about objective facts. In the model, there is a message sender and a receiver, and two possible states of the world, left or right. The sender is one of three types: honest, or a leftist or rightist “ideologue.” The honest type observes a private signal in , with higher values implying stronger support for the right state, and reports the observed value truthfully. Ideologues strategically choose any message from this set to maximize the receiver's belief in their preferred state, ignoring any private information they may have. I show that a small presence of ideologues can have a large effect on communication: while we might expect ideologues to just send extreme messages, in most equilibria ideologues use “strategic understatement,” and in many cases actually mix over all non‐neutral (non‐N∕2) messages to mimic honest types and gain credibility. This distorts the interpretation of these messages such that all messages on a side of the spectrum (above or below N∕2) have the same effect on receiver beliefs. This coarsened communication is less informative than even the weakest non‐neutral messages in the absence of ideologues. I show by example how ideologues can cause large delays in the time required for receiver beliefs to converge to truth.     

Media-Based Sentiment Indices as an Alternative Measure of Consumer Confidence

In this paper, we consider the feasibility of constructing online sentiment indices, using large amounts of media data, as an alternative to the conventional survey method used to create the consumer confidence index in South Africa. A clustering framework is adopted to provide an indication of possible candidate sentiment indices constructed from a combination of different text sources and dictionaries that best mimic the traditional survey-based consumer confidence index from the South African Bureau for Economic Research (BER). The results conclude that it is possible to create an index using sentiment analysis using online editorial data that does resemble the BER’s consumer confidence index. The different media-based sentiment indices (MSI) show a significant level of correlation and co-movement with the BER’s CCI. Impulse responses and cross-correlation functions indicate that the MSI could potentially lead the survey-based method up to two quarters. Furthermore, Granger-causality tests show that the media-based indices are good predictors of future consumer confidence index values. The results provide motivation for further study on the use of sentiment-based techniques and online media data sources to track consumer confidence within an emerging market such as South Africa.     

Measuring the Impact of Regulation: A Study of Canadian Basic Cable Television

We evaluate the appropriateness of regulation within the Canadian cable television industry by applying both parametric and non-parametric approachesto measure scale efficiency. Although we begin with a sample offering adequatedegrees of freedom for parametric estimation, important policy issues lead us toconsider further estimation over sub-samples. Since some of these sub-samplesare small enough that parametric models cannot guarantee reliable estimates, weobtain production characteristics non-parametrically through data envelopmentanalysis. The nonparametric results for scale efficiency support the parametricresults. We find evidence against a natural monopoly argument that might havejustified continuation of the mandated monopolization of Canadian cable televisionservice. By the end of the sample period, there were no longer substantial economiesof scale in most relevant markets.     

The Effects of Cognitive Problem-Solving Orientation and Technological Familiarity on Faster New Product Development

This study examines the relationships between speed of development and the cognitive problemsolving orientations of both members of the team and the project leader when they work with more familiar or less familiar technologies. Edward McDonough and Gloria Barczak collected data from 32 new product development projects in 12 British companies. They report that technological familiarity moderates the relationship between speed of development and the cognitive problem-solving orientation of both project leaders and project teams and they explore implications of these results for R&D managers.     

On Option-Pricing Models in Real Estate: A Critique

This paper considers the problems peculiar to options on real estate, because of the special set of institutional factors influencing real estate markets. It is intended to serve as a reply to Johnson and Wofford [15] as well as provide an overall critique of option-pricing models in a real estate context. Our major point is that a variety of real estate decisions, such as the abandonment decision, the option to refinance, or the option to exercise a contingent real estate purchase contract, may be modeled using option-pricing techniques. However, both the theoretical and institutional aspects of real estate markets must be taken into account in both developing and applying option models in a real estate context.