Production in incomplete markets: Expectations matter for political stability

In the present paper we study voting-based corporate control in a general equilibrium model with incomplete financial markets. Since voting takes place in a multi-dimensional setting, super-majority rules are needed to ensure existence of equilibrium. In a linear–quadratic setup we show that the endogenization of voting weights (given by portfolio holdings) can give rise to – through self-fulfilling expectations – dramatical political instability, i.e. Condorcet cycles of length two even for very high majority rules.     

Even beyond humanity – a comment on ‘Change and commitment: beyond risk and responsibility’ by Silvio Funtowicz and Roger Strand

Due to past major food scares, food-safety perceptions have become a widely investigated topic. The aim of the present study was to examine food-safety perceptions separately for every step of the total meat supply chain, as such a detailed approach yields more promising strategies to ensure food safety in the future. Using a large-scale survey, we examined people’s risk perceptions of 18 steps describing the total meat supply chain. The results revealed a clear distinction between risk perception at the production stage and risk perception at home in the total meat supply chain, in that people perceived significantly less risk at home. However, people’s risk perceptions of the single stages in the total meat supply chain were overall slightly above average. Additionally, there were individual differences, as risk perception at the production stage was highly correlated with risk perception at home, meaning that some people perceived more risk than others overall. Using a multiple regression analysis, we found food-safety perceptions to be barely significant next to other important variables affecting people’s meat-consumption decisions. For those analyses, we asked participants to assess several constructs previously found to be associated with meat consumption. The goal was to determine how food-safety perceptions influence people’s meat consumption next to other important constructs in situations in which no major food scandal is present. The present paper concludes by discussing possible marketing and policy strategies to overcome people’s inaccurate safety perceptions of the stages of the total food chain.     

Dis-Ag-reement: the construction and negotiation of risk in the Swedish controversy over antibacterial silver

What constitutes a potentially hazardous object is often debated. This article analyses the polemic construction and negotiation of risk in the Swedish controversy over the use of antibacterial silver in health care and consumer products. This debate engages the media, government agencies, parliament and government, non-governmental organizations and companies. Texts and websites from these actors were studied using content analysis. Antibacterial silver is construed by some actors as a risk object with harmful effects on a series of objects at risk: the environment, public health, organisms and sewage treatment. In contrast, other actors deny that antibacterial silver is a risk object, instead construing it as mitigating risk. In such a schema, antibacterial silver is conceived of as managing the risk objects of bacteria and micro-organisms, in turn managing the risk objects of infection, bad smell and washing, and in turn helping the environment and public health (objects at risk). The structure of the debate suggests two basic modes of risk communication. First, antibacterial silver is construed as a risk object, endangering a variety of objects at risk, such as organisms, public health, the environment and sewage treatment. Second, this association between antibacterial silver and objects at risk is obstructed, by denying that antibacterial silver is a risk object or by associating silver with the benefit of mitigating risk.     

Information and \sigma -algebras

In this work, we clarify the relationship between the information that an agent receives from a signal, from an experiment or from his own ability to determine the true state of nature that occurs and the information that an agent receives from a $\sigma $ -algebra. We show that, for countably generated $\sigma $ -algebras, the larger it is, the larger the information is. The same is true for general $\sigma $ -algebras after the removal of a negligible set of states.     

Prudent expectations equilibrium in economies with uncertain delivery

In an economy with private information, we introduce the notion of objects of choice as lists of bundles out of which the market selects one for delivery. This leads to an extension of the model of Arrow–Debreu that is used to study trade ex ante with private state verification. Under the assumption that agents are prudent, equilibrium is characterized by the fact that agents consume bundles with the same utility in states that they do not distinguish. This is a weaker condition than the restriction of equal consumption imposed by Radner (Econometrica 36(1), 31–58, 1968), therefore, some no trade situations are avoided and the efficiency of trade increases.     

The effectiveness of advertising alcohol products in sports sponsorship

Studies have shown that exposure to sponsorship can influence behavior. However, evidence of the effectiveness of sports advertising and its influence on alcohol consumption is inconclusive. The goal of this research is to examine whether sponsorship by alcohol products receives the same attention as sponsorship by nonalcohol products depending on their congruence and the way they influence the intention to consume. Using sports posters, an experiment was performed to measure attention through eye-tracking. The results show that attention paid to alcohol brands is no greater than the attention paid to incongruent brands and is no different from the attention paid to congruent brands, regardless of gender and sporting discipline. Attention paid to sponsors has no influence on the intention to consume. These results show the need for further research on the effectiveness of sponsorship and its relationship with alcohol consumption.