Book Reviews

Review of World Economics -     

Visionary projects: a viable rationale for human space-flight?

Today's prevailing geo-political and socio-economic climate is proving unfavourable towards justifying on-going and future human space-flight programmes. Traditionally cited benefits, such as scientific and aconomic progress or political advantages, are widely deemed insufficient reasons for spending considerable amounts of public funds. A rationale for human space-flight, evoking visions such as exploitation of extraterrestrial resources or human exploration of space, has to cope with an unavoidable dilemma: attractive as they may appear, these projects are fraught with many grave uncertainties and risks. This paper attempts to answer the question over what, if any, significance such visionary projects may assume in justifying the continuation of human space-flight activities. We argue that, despite as yet unanswerable technological and economical questions, and despite the extremely long time-frames involved, it seems reasonable and, hence, justified to keep the option of being able to solve by means of humans in space the impending energy crisis in the coming century.     

Why did we make that cheese? An empirically based framework for understanding what drives innovation activity

In the more recent product development literature the interplay between R&D skills and competencies and market skills and competencies is seen as a major determinant of successful innovation. The study reported in this article was done in order to cast more light on these two constructs in an industry with low R&D expenditures, but where product development is nevertheless considered to be strategically important. That industry is the food processing industry. The results of a series of case studies indicate that constructs other than R&D and market orientation may be more appropriate for understanding innovation and explaining innovation success in the case material. A new set of constructs focusing on what causes specific innovation activities to occur is proposed and a revised framework is developed.     

What do premiums paid for bank M&As reflect? The case of the European Union

We analyze the takeover premiums paid for a sample of domestic and cross-border bank takeovers in the European Union between 1997 and 2007. We find that acquiring banks value profitable, high-growth and low risk targets. We also find that the strength of bank regulation and supervision as well as deposit insurance regimes in Europe have measurable effects on takeover pricing. Stricter bank regulatory regimes and stronger deposit insurance schemes lower the takeover premiums paid by acquiring banks. This result, presumably in anticipation of higher compliance costs, is driven by domestic deals. Similar qualitative results are found for both the entire sample and the sample of publicly traded targets.     

A within-attribute model of variety-seeking behavior

Existing models view variety seeking as the result of differences in the level of attribute satiation across attributes. An alternative within-attribute variety-seeking (WAVS) model is proposed. The model posits that variety seeking occurs among the nested features, or meaningful value ranges, of an underlying dimension. The resulting pattern of consumption is represented as an oscillation about a consumer's ideal point on the dimension. An empirical study that illustrates different oscillation patterns is reported.     

A note on European farmers' preferences under cumulative prospect theory

Explaining farmer decision making using cumulative prospect theory is of increasing importance. We present a systematic review on European farmers' preferences under the cumulative prospect theory framework. We identified 17 studies covering 2324 farmers from 12 European countries. All studies report that (on average) farmers are: (i) risk averse, (ii) loss averse, and (iii) overweight small probabilities and underweight large probabilities. However, there is a large heterogeneity across and within studies. These findings have implications for the analysis and design of policy and insurance.