Insurance for the Poor?

Microinsurance is the provision of insurance services to the poor, usually in developing countries. One of the key criteria of poverty is vulnerability even to minor events. In such cases, even micro coverage can make a major difference, yet still be funded by an affordable contribution by the insured. Like any kind of insurance, microinsurance can cover different risks to life, health, farming, property among other things. Our paper sketches how one could address and develop microinsurance business ethics. First, we introduce microinsurance to the business ethics community and business ethics to the microinsurance community. Our draft of microinsurance ethics is then developed from two angles: as a holistic understanding of ideals and possible ethical conflicts in key stakeholder relationships and by distinguishing eight challenges when targeting the poor and when marketing microinsurance. As an open ending, the article suggests a three-stage action research design focusing on how microinsurance could (and should) internalize ethics, respecting rather than neglecting national- and local-cultural conditions.

     

Wettbewerbspolitik in der digitalen Wirtschaft

Digital content and services providers like Alphabet (formerly Google) or Facebook have become an indispensable part of our everyday lives and are among the highest valued firms in the economy as a whole. Most digital markets are characterized by direct and indirect network effects and therefore also by so-called two-sided platforms. To date it is not clear to how much market power these firms actually possess, which is a prerequisite for a possible policy intervention. The authors discuss measuring market power within the existing European legal framework and propose new legal rules in the field of digital markets. As the limitations of current instruments such as the SSNIP test point out, new approaches for the analysis of markets in the context of Internet-based platforms are necessary. The authors prefer modifying competition law to sector-specific regulations of internet-based businesses. They also discuss the implications that the use of big data has on competition policy. The author Günter Knieps focusses on the network evolution of the future all-IP Internet, which should neither be disturbed by regulatory technology policy nor by network neutrality regulation.     

A tentative analysis of the impacts of an airport closure

This paper identifies the vulnerabilities of operations at Heathrow airport to a short airport closure. The system disruptions assessed are delays, flight rerouting or diversions to alternate airports, and flight cancellations. In addition, the impact on fuel consumption, and hence CO₂ emissions, is quantified using the Reorganized Air Traffic Control Mathematical Simulator Plus simulation model and the Advanced Emission Model tool. The results have implications for assessing how increased severe weather events associated with climate change may disrupt airport operations.     

Internet resources and capabilities: Japanese SME risk-taking,industry and performance

This study investigates how Internet-related resources and capabilities are influencing performance in Japanese small- and medium-sized enterprises (SMEs). We use a structural equation modelling approach to test these relationships between Internet readiness, Internet capability, risk-taking perceptions and performance within Japanese SMEs (350 SMEs). Unlike other counterpart countries, such as South Korea, Japanese SMEs have been relatively slow in implementing Internet technologies into business practice. However, the results indicate that if Japanese SMEs allocate appropriate resources and deploy Internet capabilities these firms will benefit with performance gains. Further, we find that both the perception of risk-taking and the industry in which the firm operates are key factors in either inhibiting or enhancing the firm’s ability to leverage Internet-related capabilities for firm performance.     

A simultaneous model of multiple-discrete choices of variety and quantity

In many categories, consumers purchase discrete quantities of multiple varieties. For example, when doing grocery shopping for cereals, consumers may purchase in each category three units of brand A, four of brand B, and one of brand C. These decisions are often influenced by nonlinear pricing strategies such as quantity discounts. Modeling such multiple-discrete choices is challenging, as they violate assumptions of standard choice models. In this research, the author introduces a computationally attractive choice model that simultaneously captures 1) variety, 2) discrete quantity, and 3) nonlinear pricing strategies, such as quantity discounts. The model assumes that consumers maximize variety of the choice outcome, while taking into account constraints on utilities of alternatives. Application of the proposed model to two datasets demonstrates the superior fit compared to several rival models. Counterfactual analyses demonstrate that the model is a valuable tool for assortment and pricing decisions.     

The impact of the market transparency unit for fuels on gasoline prices in Germany

Increasing horizontal as well as vertical transparency in oligopolistic markets can be advantageous for consumers, due to reduced search costs. However, market transparency can also affect incentives to deviate from collusive agreements and the punishment by rival firms in the market. Using a panel of 27 European countries, we analyse the impact of increased market transparency via the introduction of a market transparency unit for fuels in Germany. Applying a difference-in-differences approach, we find evidence that both gasoline and diesel prices have increased. While consumers may be better off using a retail price app for fuels, gas stations are also able to compare prices at almost no cost.     

Kleiner Wissenschaftlicher Beitrag

The author investigates the new General Liability Insurance Terms 2004 (and 2002). The firmer terms were in the main points from 1921 with a lot of supplements in the following years. It is reasonable that a modern concept of these terms has been created by the German Insurance Association. In the article the pros and the contras are discussed of 16 points of the new terms. The result is that in some points the position of the insured are better than before and in other a little bit worse. As example is to mention that in No. 1.1 is now fixed a very clear definition that not the date of the cause is decisive respecting the insurer’s obligation but the date in which the insured’s action (or non action) leads to a loss event. The insurers hope that in future the courts will accept this definition as clear enough.     

Structural adjustment programmes in sub-Saharan Africa

As a result of a donor conference staged by the World Bank in Paris on 3rd and 4th December, 1987, donor countries and international organizations now intend to make $6.4 billion available in the form of a special programme to highly indebted, low-income African countries to carry out structural adjustment programmes during the period 1988–1990. This sum includes approximately $6.4 billion available in the form of a special programme to highly indebted, low-income African countries to carry out structural adjustment programmes during the period 1988–1990. This sum includes approximately 3.2 billion of additional funds which donor countries wish to provide in support of such programmes on a co-financing or parallel financing basis together with the World Bank. This article offers an initial assessment of the proposed special programme, the possibilities opened up, the risks involved, and the necessary conditions for its success. The views expressed in this article are those of the author.     

Economic Relations Among Earnings Quality Measures

Empirical studies on earnings quality use various measures that capture particular dimensions of earnings quality. This paper provides a theoretical foundation to evaluate and compare several common earnings quality measures: value relevance; persistence; predictability; smoothness; and discretionary accruals. We use a rational expectations framework in which a manager has market price, earnings, and smoothing incentives and can bias earnings reports. Taking the information content of reported earnings as a natural benchmark, we determine how variations of management incentives, operating risk, and accounting noise affect earnings quality and examine whether the different measures point in the same or in the opposite direction. We find that value relevance and persistence are measures that are closely aligned with each other and with our benchmark, followed by predictability and smoothness. Discretionary accruals measures are less aligned because they are based on the level of accruals, which confounds their information content. Our results also support the notion that smoother earnings and higher discretionary accruals are associated with greater earnings quality.