Market reaction to public information: The atypical case of the Boston Celtics

The publicly traded Boston Celtics Limited Partnership shares provide a unique means of studying the impact of information on equity prices. The results of the Celtics’ basketball games significantly affect partnership share returns, trading volume, and volatility. Controlling for the expectedvalue of the signal using betting-market point spreads has little effect on these relations. Investors respond asymmetrically to wins and losses, and playoff games have a larger impact on returns than regular-season games. Opening prices do not fully reflect game results, consistent with previous findings that significant volatility is caused by traders acting on private information.     

EXPLAINING PREMIUMS AND DISCOUNTS ON CLOSED-END EQUALITY COUNTRY FUNDS

Over the past decade or so, the surge of interest among U.S. investors in international investing has led to the creation of numerous foreign equity country funds. Like U.S. closed-end mutual funds, the prices of such closed-end country funds fluctuate widely in relation to their underlying net asset values (NAVs).
In this paper, the authors summarize the major findings of their recent study of the performance of 28 country funds relative to their NAVs over the period 1978–1995. While 20 of the 28 funds traded at average discounts to their net asset values, the discounts for the country funds were smaller than those of the average U.S. fund, and over a quarter of the funds sold at premiums.
In an attempt to explain such premiums or discounts, the authors examined primarily three factors: (1) the sensitivity of country-fund returns (relative to that of local market indices) to U.S. returns; (2) the possible effects of local government investment restrictions; and (3) the impact of exchange rate changes. Although most of the eight funds that traded at average premiums represented countries with significant restrictions on capital flows and foreign ownership, there were also a number of funds with similar restrictions trading at significant discounts. In exploring the reasons for such discounts, the authors noted that the returns to the country funds were "surprisingly sensitive" to U.S. market conditions, thus reducing the extent of their diversification benefits for U.S. investors. The article also raises the possibility that if such country funds are not "priced at the margin" by globally diversified investors, U.S investors' "country-risk sentiments" could cause such funds to trade at discounts.     

Persuasion knowledge and consumer reactions to pricing tactics

The current research investigates consumer knowledge of the pricing tactics that marketers frequently employ and the effects of that knowledge on responses to various price offers. In the research, a series of studies were conducted to develop and validate a knowledge measure designed to assess pricing tactic persuasion knowledge (PTPK). Consistent with the persuasion knowledge model, individuals with higher levels of PTPK were shown to have more knowledge-related thoughts regarding pricing tactic information than those with low levels of PTPK. Additionally, pricing tactic persuasion knowledge was shown to be more predictive of consumer choices regarding quantity surcharge offers and purchase interest evaluations following exposure to tensile claim offers (e.g., “Save up to 50 percent Off”) than several competing constructs.     

The Influence of a Hotel Firm's Quality of Service and Image and its Effect on Tourism Customer Loyalty

The aim of this article is to understand the influence of hotel service quality and corporate image on tourism customer loyalty. Data were collected from tourists at several sight-seeing locations in Mauritius. The study sample comprised guests of various hotels in Mauritius who were randomly approached and invited to participate in a survey on the hotel's services. The study findings suggest that it is the quality of service and the corporate image of the hotel that jointly influence tourism customers' loyalty. Although the study findings do not indicate a direct relationship between service quality and loyalty, it is the consistent quality of service that creates and sustains the image of the hotel which, ultimately, results in tourism customer loyalty. This would therefore suggest that tourism customer loyalty is dependent on a hotel's ability to consistently deliver service quality.     

Is Real Estate Becoming Important Again? A Neo‐Ricardian Model of Land Rent

Classical economists believed that land rent as a share of total income would increase with economic growth. This belief was important to many 19th and 20th century critiques of capitalism. Land rents as a share of national income apparently declined for most of the 20th century, but increased during the 1990s. In this paper, we develop a model of the classical theory of land rent that allows rent to increase or decrease as a share of national income, depending on several parameters. It seems likely that the long decline in land rent is over and that land rent in the future will slowly increase as a share of national income.     

Efficiency,flexibility, or both? Evidence linking strategy to performance in small firms

This paper analyzes small firm performance in relation to efficiency and flexibility strategies. Using configuration theory, the authors propose that small firms that pursue efficiency strategies or flexibility strategies outperform those that attempt to pursue both. Additionally, size is used as a configurational attribute to develop competing hypotheses on whether efficiency strategies or flexibility strategies are better suited for small firm performance. In two samples of 200 and 144 privately‐held small firms, firms that mixed efficiency and flexibility strategies significantly underperformed. No significant performance differences were found between firms utilizing only efficiency strategies and those utilizing only flexibility strategies. Copyright © 2005 John Wiley & Sons, Ltd.     

Liquidity Provision and the Organizational Form of NYSE Specialist Firms

We examine the influence of NYSE specialist firm organizational form on the nature of liquidity provision. We compare closely held firms whose specialists provide liquidity with their own capital to widely held firms whose specialists provide liquidity with diffusely owned capital. We argue that specialists using their own capital have a greater incentive and ability to reduce adverse selection costs, but face a greater cost of capital. Differences in the proportion of spreads due to adverse selection costs, large trade frequency, the sensitivity between depth and spreads, and price stabilization support this argument.