Consumers' mood states: The mitigating influence of personal relevance on product evaluations

This article reports the results of two studies where subjects' mood states (good, bad) were manipulated. In keeping with previous findings, subjects' evaluations were biased by their mood state. As predicted, however, this bias was only discernible when the product evaluation was perceived to be relatively unimportant. © 1994 John Wiley & Sons, Inc.     

Arbitrage Opportunities in Diverse Markets via a Non-equivalent Measure Change

We study arbitrage opportunities in diverse markets as introduced by Fernholz (J Math Econ 31:393–417, 1999). By a change of measure technique we are able to generate a variety of diverse markets. The construction is based on an absolutely continuous but non-equivalent measure change which implies the existence of instantaneous arbitrage opportunities in diverse markets. For this technique to work, we single out a crucial non-degeneracy condition. Moreover, we discuss the dynamics of the price process under the new measure as well as further applications.Both authors gratefully acknowledge financial support by the National Centre of Competence in Research “Financial Valuation and Risk Management” (NCCR FINRISK). The NCCR FINRISK is a research program supported by the Swiss National Science Foundation. The first author also thanks Credit Suisse Group for financial support.     

Introducing Instruments of Central Bank Accountability in a Monetary Union

With an increasing number of independent central banks, accountability of central banks is also getting more attention. This paper analyses the possibility of introducing instruments of central bank accountability in a monetary union. In our model, monetary policy is influenced by the governments of the member states according to the degree of independence granted to the central bank. Instruments of democratic accountability are introduced which generate different expected losses for a government. The amount of the expected loss will determine the approval of a government to the implementation of a particular mechanism. We show that the agreement between the governments will only be unanimous for the definition of the inflation target of the central bank.

An estimated two-country DSGE model of Austria and the Euro Area

We present a two-country New Open Economy Macro model of the Austrian economy within the European Union’s Economic & Monetary Union (EMU). The model includes both nominal and real frictions that have proven to be important in matching business cycle facts, and that allow for an investigation of the effects and cross-country transmission of a number of structural shocks: shocks to technologies, shocks to preferences, cost-push type shocks and policy shocks. The model is estimated using Bayesian methods on quarterly data covering the period of 1976:Q2–2005:Q1. In addition to the assessment of the relative importance of various shocks, the model also allows to investigate effects of the monetary regime switch with the final stage of the EMU and investigates in how far this has altered macroeconomic transmission. We find that Austria’s economy appears to react stronger to demand shocks, while in the rest of the Euro Area supply shocks have a stronger impact. Comparing the estimations on pre-EMU and EMU subsamples we find that the contribution of (rest of the) Euro Area shocks to Austria’s business cycle fluctuations has increased significantly.

Using Intuition in Fuzzy Front‐End Decision‐Making: A Conceptual Framework

The goal of decision‐making during the execution of the fuzzy front end (FFE) is to develop a creative new product concept. Although intuitive decision‐making has been found to increase new product creativity, the theoretical knowledge base as to why and under which conditions intuition use during the process of generating a creative outcome is beneficial, is rather limited. Therefore, this study develops a conceptual framework theorizing why and under which conditions using intuition in FFE execution decision‐making may or may not be (as) beneficial for new product concept creativity. To develop this framework, the authors combine a creativity perspective of the FFE and a dual‐processing perspective of intuition. Interviews with eight FFE practitioners are used to support and illustrate the framework development. The theorizing leads the authors to postulate that intuition use may be beneficial to making generation and evaluation decisions during FFE execution because of the capabilities of the unconscious mind from which intuition results. However, the framework acknowledges that, due to the shortcomings of the unconscious mind, intuition may not be as beneficial to FFE decision‐making in some situations. The authors believe that this framework offers researchers a fertile area for further research and practitioners better insight into when intuition might be effective in FFE execution decision‐making.     

Capital liberalization and the US external imbalance

Differences in financial systems are often named as a prime candidate for the current state of global imbalances. This paper focuses on cross-country heterogeneity in access to international financial markets that derives from the presence of capital controls and argues that the process of capital liberalization over the past decades can explain a substantial fraction of US net external liabilities. We present a simple two-country model with an internationally traded bond, in which capital controls are reflected in the presence of borrowing and lending constraints on that bond. In a US versus the rest of the world (RoW) scenario, we perform experiments that are largely consistent with countries' liberalization experiences. A reduction in the RoW's controls on capital outflows and/or a tightening in the RoW's borrowing constraint enable the US economy to better insure against consumption risk relative to the rest of the world, and therefore decrease its motives for precautionary asset holdings relative to the rest of the world. As a result of these asymmetric shifts in countries' barriers to capital mobility, the US runs a long run external deficit.     

Information search behaviour and its determinants: the case of ethical attributes of organic food

Daily decisions on food purchase are known to be undertaken using limited information search. However, when confronted with ‘ethical’ products, consumers often become more involved, and this results in a more extensive search for information. This research focuses on the information search behaviour of European consumers with regard to ethical attributes like animal welfare or environmental aspects of organic food by means of an Information Display Matrix. Row‐wise information search by product characteristics (attributes) was widely preferred over information search by product alternatives (column‐wise). Therefore, information (e.g. in the Internet) should increasingly be provided by attributes. The majority of consumers use simplifying and selective search strategies when looking for information on organic food with additional ethical attributes. Consumers tend to start information search in the top, left hand corner and move towards the bottom, right hand corner. Thus, principal attributes should be placed in the upper left corner and be followed by the next most important and so on when presenting information on an array of different products. Our results show that information search patterns of consumers depend on socio‐demographic characteristics like gender and age and, to a lesser extent, also on attitudes regarding environmental or social aspects of food production. Thus, marketers, particularly those using the Internet, should revise their systems of information provision and focus increasingly on consumers' needs.     

A contextual theory of organizational learning from failures and successes: A study of acquisition completion in the global newspaper industry, 1981–2008

This study develops and tests theory about the context‐specificity and outcome‐dependence of experiential learning in acquisition processes. First, we investigate whether learning from experience gained in different acquisition contexts is limited to influencing subsequent outcomes of same‐context transactions. Second, we analyze whether learning patterns in response to prior successes and failures differ across acquisition contexts, depending on two properties of these contexts—the degree of structural variance and the level of stimulation of deliberate learning. Learning is assessed with respect to an underexplored organizational goal variable in acquisitions: completion of a publicly announced transaction. An analysis of 4,973 acquisition attempts in the newspaper industry in 1981–2008 largely supports our theory. Copyright © 2012 John Wiley & Sons, Ltd.