The impact of free and exaggerated prices on perceived quality of services

Previous research in the price-quality area has largely limited its focus to the normal price range and has concentrated on physical goods almost entirely. This study examines the effect of offering a service for free and at an exaggerated price on the perception of its quality. Consistent with the theory developed in this paper, the experimental results suggest that when the tested services are offered for free and for exaggerated prices, they are perceived as lower in quality than when they are offered in a normal price range.     

Are Business Incubators Really Creating New Jobs by Creating New Businesses and New Products

This article examines the use of business incubators to enhance industrial innovation and new venture formation. Currently, the number of business incubators is rapidly growing. Yet, we have little solid evidence that such centers actually stimulate the growth and success of either innovations or new ventures. Gerald Udell examines incubators' resources and services in an effort to assess their potential impact. He conducted a survey of two hundred incubators and linked the results to a partial review of the literature to aid in the assessment of business incubators.     

The coupon-induced tax clientele effect in bond prices

A pricing model for default-free bonds under differentia! taxation of coupon income and capital gains is presented which explicitly considers coupon-induced tax clienteles. Subsequent analysis provides indirect evidence in support of the existence of the coupon-induced tax clientele effect, while direct evidence is provided by analyzing differences in marginal tax rates estimated across different coupon levels for sets of US Treasury bonds with the same maturity date. The results are also generally consistent with the traditional notion that marginal tax rates are inversely related to coupon levels.     

Modelling Deforestation and Land‐Use Change: Sparse Data Environments

Land‐use change in developing countries is of great interest to policy‐makers and researchers with diverse interests. Concerns about consequences of deforestation for global climate change and biodiversity have received the most publicity, but loss of wetlands, declining land productivity and watershed management are also problems facing developing countries. Analyses of these problems are especially constrained by lack of data. This article reviews modelling approaches for data‐constrained environments that involve discrete choice methods including neural nets and dynamic programming, and research results that link individual household survey data with satellite images using geographic positioning systems.     

Bank Managers' Heterogeneous Decisions on Discretionary Loan Loss Provisions

This study examines bank managers' three major motivations for discretionary behavior with respect to loan loss provisions: signaling, income smoothing, and capital management. To do so, it utilizes a bank-specific time-series regression approach that captures heterogeneity in the banks' priorities and strategies for alternative motives and compares the results to those from alternative model specifications. The statistical tests and results presented in this study lead to three conclusions. First, significant results for the income smoothing hypothesis are robust to the various model specifications. Second, average signaling coefficients estimated from bank-specific regressions are systematically larger than corresponding coefficients from pooled time-series cross-sectional regressions and are statistically significant. Finally, bank managers appear to use loan loss provisions to manage their regulatory capital levels by comparing them with the minimum ratios specified by regulators rather than with a time-series bank-specific ratio or pooled time-series cross-sectional mean ratio.