Pricing with Endogenous Direct Advertising in a Monopoly

This paper develops a model of informative advertising in which a firm builds a database using its historical sales records in order to directly target ads on those consumers who have a high probability of purchasing its products. We show that the firm can use this type of direct advertising as a screening mechanism to identify high demand consumers. As a result, direct advertising can work essentially as a device to increase a firm's monopoly power. From a social point of view, this implies that the transition from traditional mass-advertising to direct advertising can generate a trade-off between higher advertising efficiency and greater monopoly power. We compute the model to shed light on the relative strength of these two forces, and find that while direct advertising might have a substantial negative impact on consumers, this advertising technology can only occasionally reduce welfare.     

Brakes to organic market enlargement in Spain: consumers’ and retailers’ attitudes and willingness to pay

In Spain, consumption of organic products has not kept pace with production. Up till now, foreign markets have been a natural destination for excess supply. However, world trade liberalization might cause important commercial problems to Spanish producers that could be partially solved by enlarging the domestic market. The goal of this paper is to assess the opportunity for such enlargement focusing on two main aspects: consumers’ and retailers’ attitudes and willingness to pay for organic products. Concerns about health, natural diets or environmental issues could stimulate consumption, while retailing dynamism and competition to gain new market segments might favour distribution. Both aspects are investigated through two surveys addressed to consumers and retailers in two Spanish towns. The results confirm that only a small proportion of consumers and distributors show attitudes that might favour demand expansion. The most sensitized segments are willing to pay more for organic products, but this premium is still very far from the prevailing gap between conventional and organic food products.     

Optimizing candlesticks patterns for Bitcoin's trading systems

Review of Quantitative Finance and Accounting - In this research we make the first attempt to construct automated Bitcoin trading systems that are based on classical candlesticks patterns. We than...     

Environmental management capabilities for a “circular eco‐innovation”

At a micro level, eco‐innovation marks a transition towards a circular economy (CE), and standardised routines and controls are being implemented by businesses to introduce eco‐innovative processes and thus a circular business model. Eco‐innovation applied to a circular model implies changes to companies' environmental management and accounting practices used to manage natural resources. In this context, this study analyses and measures formal and informal environmental management systems, such as certification standards and other management and environmental accounting procedures used in eco‐innovation and the CE within the dynamic capabilities theoretical framework. The study also investigates the cause‐and‐effect relationship between firms' “circular eco‐innovation” and environmental capabilities using partial least squares structural equation modelling and tests it using a sample of Spanish companies. This study offers new knowledge about the interposition of business eco‐innovation and CE‐related activities introduced by firms from the dynamic capabilities perspective.     

Making e-government attractive

E-government has now become a reality for the vast majority of developed countries and, as confirmed by recent EU studies, is also beginning to take root among the developing nations. The challenge that the majority of governments now must take up is not only to introduce a system of e-administration (the traditionally accepted definition of e-government), but also to work towards a system that will hail an era of e-governance or good government. For this to occur, public administrations must make a greater effort to implement e-government systems that allow fluid communication with the general public, thereby achieving a greater degree of participation; the key to success for e-government. This article looks at some of the major government portals to services for citizens in countries across five continents from the point of view of creativity. The analysis of how governments are using creativity to attract public attention to their sites is then compared to recent EU results on participation and depth of services.     

Testing the growth option theory: the profitability of enhanced momentum strategies in Australia

Recent literature relates growth option theory to various return regularities. Sagi and Seasholes (2007) (S&S) develop a model that explains momentum profitability using growth option theory. We test the model’s predictions in the Australian market by examining three momentum strategies. Two of these strategies examine the profitability of momentum strategies conditioned on stocks characteristics, whereas the third conditions on previous market returns. Our results are largely supportive of the S&S model. As predicted by S&S, the two strategies that use firm‐specific characteristics yield a higher profit than a simple momentum strategy. The third strategy that conditions on the previous market return also leads to differences in momentum profitability between bull and bear markets, but these differences are small and largely insignificant.     

Impatience and Inconsistency in Intertemporal Choice: An Experimental Analysis

In this article the experiment carried out by Takahashi et al. [2009 Takahashi, T., T. Hadzibeganovic, S. A. Cannas, T. Makino, H. Fukui, and S. Kitayama. “Cultural Neuroeconomics of Intertemporal Choice.” Neuroendocrinology Letters, 30, (2009), pp. 185–191.[PubMed], [Web of Science ®] , [Google Scholar]] is replicated to analyze the influence of culture, gender, origin (urban or rural), and socioeconomic level on the impulsivity and consistency of decision-making processes concerning monetary gains and losses. The results indicate that Spanish students show inconsistency, and more impulsivity over gains (i.e., more impatience, as they discount delayed outcomes more rapidly) than do Japanese and American students. Additionally, participants from urban areas show more impatience over gains than do participants from rural ones, women are more impatient than men are over losses, and participants of different socioeconomic levels show differences in their impulsivity parameters.     

On the monetary impact of fashion design piracy

Whether to legally protect original fashion designs against piracy is an ongoing debate among legislators, industry groups, and legal academic circles, which has gained little exposure in the marketing literature. We combine data on the growth of fashion designs, price markups, and industry statistics to develop a formal analysis of the essential questions at the base of the debate. We distinguish between three effects: Acceleration, whereby the presence of a pirated design increases the awareness of the design; Substitution, which represents the loss of sales due to consumers who would have purchased the original design, yet instead buy the knockoff; and loss because of Overexposure of the design resulting from the design's ubiquity. Using data-driven simulation analysis, we find that for the items analyzed (handbags and apparel), overexposure emerged as having a stronger negative effect (on average) on the original's profitability than the positive effect of acceleration. Both effects are considerably larger than that of substitution. This result is of particular interest given that industry groups have consistently focused on the damage caused by substitution. We also show that the effect of a legally mandated postponement on the introduction of a knockoff is non-monotonic for short lag: A short time lag may not affect the original design's NPV, and in fact may even damage it. For the ranges we analyzed, the positive effect of the protection period is observed primarily for time lags of over one year.     

Estimation of the production function with the variable utilization of capital assets in the Russian economy

The paper considers the problem of estimating aggregate production functions taking into account the variable utilization rate of the capital assets that act as an unobservable variable for the macro and meso levels. The proposed approach is based on the microeconomic foundations of the producer’s behavior with the appropriate modification of the problem on optimizing the volumes of production inputs and outputs. Parameter estimates have been given for the Cobb–Douglas-type production function and the performance of the utilization rate of the capital assets in Russian economy over 2002–2014. The high statistical dependence of the performance of investment in fixed capital on changes in the utilization rate of the capital assets has been revealed.     

Migration,Transfers and Child Labor

We examine agricultural child labor in the context of emigration, transfers and the ability to hire outside labor. We start by developing a theoretical background and show how hiring labor from outside the household and transfers to the household might induce a reduction in children's working hours. Analysis using Living Standards Measurement Survey (LSMS) data on the Kagera region in Tanzania lend support to the hypothesis that both emigration and remittances reduce child labor.