The Economics of Administering Import Quotas with Licenses-on-Demand in Agriculture

A Nash equilibrium is determined for licenses-on-demand import quotas where licenses are allocated on a prorated basis. Inefficiency is incurred because licenses are allocated to high-cost firms. The ability to overbid exacerbates the inefficiency due to proportionate reductions in licenses. Quota expansion causes high-cost firms to decrease their bids but reduces inefficiency. The entry of a new firm causes all incumbent firms to increase bids or bid the quota. Not penalizing firms for the non-use of licenses increases inefficiency. The inefficiency impacts of tariff reductions, license fees, limits per firm, and imperfect information are also addressed.     

Reversing the Similarity Effect in Stock‐Outs: A New Look at a Renowned Phenomenon in Consumers’ Brand Switching Behavior

Over 40 years of research has established the robustness of the similarity effect (SE; Tversky, 1972 ), which states that the introduction of new options into choice sets predominantly reduces the choice share of similar options. The present work examines whether the SE systematically reverses when real brands are excluded from assortment subsets, as is the case with stock‐outs in real purchase decisions. To this end, within‐subject decisions are examined under certain out‐of‐stock (OOS) conditions in an enhanced experimental design that resembles real shopping environments. Specifically, unforced choices of experienced consumers, inclusive of real payments, are observed for products in online transactions. The results of two studies corroborate the existence of a reserved SE. Specifically, the OOS‐induced switching patterns systematically refute the assumptions of classic economic theory, since consumers disproportionately switch to alternatives which are similar to the unavailable item in contrast to dissimilar substitutes. Finally, managerial implications and potential directions for follow‐up research in the general domain of marketing are deduced.     

The influence of TV viewing on consumers' body images and related consumption behavior

Based on cultivation theory, self-concept theories, and gender research, this study investigates the influence of TV viewing on female and male consumers' perceived body images and related consumption behavior. The results show that TV viewing biases social perceptions of body images; however, TV viewing does not impact men's consumption behavior. For women, in contrast, TV viewing increases the real–ideal self discrepancy, which, in turn, leads to consumption behavior in order to achieve ideal bodies. For both groups, TV viewing increases body dissatisfaction; also, general beliefs about body images influence related behavior. The results provide some interesting contributions to theory and practice.     

Age matters: How developmental stages of adulthood affect customer reaction to complaint handling efforts

This research examines how age moderates the impact of justice perception (i.e., distributive, procedural, and interactional justice) on post-complaint satisfaction. By tracking the three justice dimensions' effect sizes across different ages, we identify four developmental stages of adulthood, which are separated by five-year transition periods. The stages are young (18–27 years of age), early (33–43), middle (49–57), and late adulthood (≥63). The moderation results show that the impact of distributive justice on satisfaction peaks in middle adulthood and the effect of procedural justice in early adulthood. Finally, the effect of interactional justice dips in early adulthood. Managerial and theoretical implications are discussed.     

Noah's Ark is full of common species attractive to humans: The case of boid snakes in zoos

As the fate of endangered species may largely depend on human decisions, we analyzed the effect of species attractiveness to humans on conservation efforts devoted to captive breeding. Our respondents were asked to rank photographs of 56 species of boas and pythons according to perceived attractiveness. Surprisingly, attractiveness, body size and, marginally, also taxonomic uniqueness of the species were the only significant predictors of the size of zoo population. On the other hand, variables putatively associated with species rarity (inclusion in the Red List or protection by international law, geographic range size, and commercial price) had no effect. The range size was, however, positively correlated with attractiveness. As the perceived attractiveness affects at least some components of the conservation effort, it should not be further neglected but should be routinely included into conservation reasoning.     

Horizon‐Dependent Underreaction in Financial Analysts' Earnings Forecasts*

This paper provides empirical evidence that underreaction in financial analysts' earnings forecasts increases with the forecast horizon, and offers a rational economic explanation for this result. The empirical portion of the paper evaluates analysts' responses to earnings‐surprise and other earnings‐related information. Our empirical evidence suggests that analysts' earnings forecasts underreact to both types of information, and the underreaction increases with the forecast horizon. The paper also develops a theoretical model that explains this horizon‐dependent analyst underreaction as a rational response to an asymmetric loss function. The model assumes that, for a given level of inaccuracy, analysts' reputations suffer more (less) when subsequent information causes a revision in investor expectations in the opposite (same) direction as the analyst's prior earnings‐forecast revision. Given this asymmetric loss function, underreaction increases with the risk of subsequent disconfirming information and with the disproportionate cost associated with revision reversal. Assuming that market frictions prevent prices from immediately unraveling these analyst underreac‐tion tactics, investors buying (selling) stock on the basis of analysts' positive (negative) earnings‐forecast revisions also benefit from analyst underreaction. Therefore, the asymmetric cost of forecast inaccuracy could arise from rational investor incentives consistent with a preference for analyst underreaction. Our incentives‐based explanation for underreaction provides an alternative to psychology‐based explanations and suggests avenues for further research.     

Role of delivery options in basis convergence

The corn futures contract, traded on the Chicago Board of Trade, provides sellers with delivery options about the timing of delivery, the location of delivery, and the grade to be delivered. These options presumably have values that can vary from one delivery month to the next. The joint values of the timing and location options are estimated for each delivery month for the years 1989 through 1997. These estimates are then used in regression models to determine the degree to which they influence basis variability on the first day of the maturity month. Econometric models are also developed to see if the estimated implicit options values are useful in improving the forecasts of basis convergence over the 2‐month period prior to maturity. The results suggested that variation in the delivery options values in the corn futures contract does indeed help explain basis variability on the first day of maturity. An option‐value variable, based on estimated values two months prior to maturity, resulted in occasional, small improvements (from a statistical point of view) in the precision of forecasts. The existence of delivery options increases basis variability at maturity, but it is difficult to use this information to improve forecasts of basis convergence. One limitation of the analysis is that the Chicago cash market had few transactions per day during the sample period, and hence the reported spot prices may be inadequate for making high‐quality estimates of the options values. © 2002 Wiley Periodicals, Inc. Jrl Fut Mark 22:783–809, 2002     

Konjunkturschlaglicht: Wechselkurspolitik in China

HWWA-KONJUNKTURFORUM

Konjunkturschlaglicht: Wechselkurspolitik in China     

Functions of units,scales and quantitative data: Fundamental differences in numerical traceability between sciences

Quality & Quantity - Quantitative data are generated differently. To justify inferences about real-world phenomena and establish secured knowledge bases, however, quantitative data generation...     

Measurement in metrology,psychology and social sciences: data generation traceability and numerical traceability as basic methodological principles applicable across sciences

Quality & Quantity - Measurement creates trustworthy quantifications. But unified frameworks applicable to all sciences are still lacking and discipline-specific terms, concepts and practices...