Fractional cointegration and the term structure

According to the expectations theory of the term structure of interest rates, the yield spread between long-term and short-term interest rates is an optimal predictor of future changes in short rates over the long-run. Results concerning the empirical validity of this hypothesis are not unanimous. These contradictions may be due to the fact that the traditional concept of cointegration is too restrictive. We refer here to the concept of fractional cointegration introduced by Granger (1986). We study the expectations theory by testing for the existence of a (fractional) cointegration relationship between short-term and long-term interest rates. There is evidence of fractional cointegration between interest rates for the G7 countries, with the exception of Germany.First version received: July 2002 / Final version received: July 2003We thank two anonymous referees for very helpful and detailed comments.     

Gender and Competition between Economic or Non‐economic Labor and Schooling: Evidence from EPAM Mali

Abstract: We use the Understanding Children's Work (UCW) definition of child labor and data from the Mali Permanent Household Survey to highlight the gender difference in the competition between economic or non‐economic labor and schooling. A quadri‐variate Probit estimation allows to account for the interdependency between school and various kinds of labor: household chores (HHC), market‐oriented (MO) activities and non‐market‐oriented (NMO) activities. Empirical results provide interesting findings, including differential gender socialization according to the gender of the offspring, gender bias in repartition of tasks and time, and competition between labor activities and schooling.     

Revenue sharing in network utility maximization problems

Alliances arise in a wide variety of domains, when a group of countries, political parties, people or other entities agree to work together because of shared interests or aims. They make sense, if the output obtained is somehow better than the outcome of acting individually. Revenue or cost sharing is key when determining if individuals are better off by contributing to an alliance or not. In our alliance each member owns a unique resource –or set of resources–, which is given to the alliance. The alliance sells services, which are supported thanks to one or a set of these resources. We focus on alliances that sell services in such a way that the total revenue of the alliance is maximized. We show that this kind of problems can be modeled through a Network Utility Maximization problem. We subsequently explore the problem of revenue sharing among the members of the alliance. Such a problem is a complex one since the interests of all participants must be ensured and correct incentives must be provided. We formally formulate the members’ interests through a set of properties the revenue sharing method should verify. We then discuss the existing methods for revenue sharing and conclude that none of them verifies the needed properties for the case of a revenue maximizing alliance. We finally propose a revenue sharing method based on projecting the contributions of each member of the alliance into an economic stable set. Through an exhaustive simulative study we conclude that our method provides, in addition to economic stability, fairness among members and the right incentives to them. Through our analysis Network Service Provider alliances, which sell quality-assured data transport services, are considered as an application example.     

Coordination Costs and the Geography of Production

In a model à la Venables of 1996 Venables, A. J. (1996) Equilibrium locations of vertically linked industries, International Economic review, 37, 341–359. doi: 10.2307/2527327[Crossref], [Web of Science ®] , [Google Scholar], we distinguish two kinds of intermediate goods: complex goods that entail endogenous coordination costs, and simple goods that do not. Coordination costs depend on geographical distance and the number of intermediate goods used in the production process. In the final stage of integration, there are two possible spatial configurations: (1) a symmetric configuration and (2) a partial core–periphery equilibrium, comprised of a core region that produces the final and complex intermediate goods, and a periphery that produces simple intermediate goods. We discuss some policy implications of this multiple-equilibria outcome.

Les coûts de coordination et la géographie de la production     

Do environmental attitudes and food technology neophobia affect perceptions of the benefits of nanotechnology?

In recent years, a significant amount of research has focussed on the analysis of consumers' aversion to new technologies in food production and processing. At the same time, research has shown that environmental attitudes may be related to purchasing behaviour of consumers. This paper presents the result of an investigation into Canadian attitudes towards nanotechnology, in general, and in applications in the food industry. The relationship between the food technology neophobia scale, environmental attitudes and nanotechnology is examined. The results suggest that food technology neophobia is significant in explaining attitudes towards nanotechnology, in general, and for food packaging and foods. Environmental attitudes are important in explaining respondents' attitudes towards nanotechnology in general but not in explaining attitudes towards nanotechnology in food packaging or food applications. Survey respondents' views of the role of science and technology in society (makes society worse or better off) are a more important determinant of attitudes towards nanotechnology than whether they had heard of nanotechnology prior to the survey.     

Learning from Greek Philosophers: The Foundations and Structural Conditions of Ethical Training in Business Schools

There is an extensive body of work that has previously examined the teaching of ethics in business schools whereby it is hoped that the values and behaviours of students might be provoked to show positive and enduring change. Rather than dealing with the content issues of particular business ethics courses per se, this article explores the philosophical foundations and the structural conditions for developing ethical training programs in business schools. It is informed by historical analysis, specifically, an examination of Platonic and Aristotelian philosophies that inspires virtue ethics, and together provides four conditions for consideration: respect for law, dialectics, imitation and deliberation. We outline the necessary structural conditions for implementing these requirements as well as suggesting the necessary pedagogical protocol applicable to all courses. It is argued that reference to our two ancient Greek philosophers provide many valuable and insightful lessons for the implementation of ethical training today including choice of theoretical content and the approach towards learning. Further, the enactment of a pedagogical protocol requires a policy of recruiting and managing business school teachers-instructors that takes into account, and consciously encourages, intellectual, relational and spiritual pedagogical qualities.     

Distributions for the first-order approach to principal-agent problems

Summary. The first-order approach is a technical shortcut widely used in agency problems. The best known set of sufficient conditions for its validity are due to Mirrlees and Rogerson and require that the distribution function is convex in effort and has a likelihood ratio increasing in output. Only one nontrivial example was so far known to satisfy both properties. This note provides two rich families of examples displaying both properties. Received: December 4, 2000; revised version: December 10, 2001     

Does Health Information Matter for Modifying Consumption? A Field Experiment Measuring the Impact of Risk Information on Fish Consumption

A field experiment was conducted in France to evaluate the impact of health information on fish consumption. A warning revealed the risks of methyl mercury contamination in fish and gave consumption recommendations. A difference-in-differences estimation shows that this warning led to a statistically significant but relatively weak decrease in fish consumption. Consumption of the most contaminated fish did not decrease despite advice to avoid consumption of these fish. Accompanying questionnaires show that consumers imperfectly recall the fish species quoted in the warning. The results suggest a relatively poor efficacy of a complex health message, despite its use by several national health agencies.     

Cross-channel free-riding consumer behavior in a multichannel environment: An investigation of shopping motives,sociodemographics and product categories

Cross-channel free-riding, in which consumers use one retailer′s channel to prepare a purchase and then switch to another retailer′s channel to purchase, can substantially erode profit margins. This research aims to understand such free-riding from a consumer empowerment perspective, investigating shopping motives and sociodemographic covariates, as well as how this behavior might differ across product categories. A survey study of decision-making behavior shows that cross-channel free-riders mainly seek to fulfill price comparison, convenience and flexibility needs. The likelihood of free-riding is higher when consumers adopt cross-channel rather than single-channel behavior, which highlights a negative outcome of multichannel retailing. The likelihood of cross-channel free-riding differs across products but not sociodemographic covariates. The findings can be used to develop recommendations for managing retention strategies.     

A pricing scheme for QoS in overlay networks based on first-price auctions and reimbursement

Providing Assured-Quality Services over data networks has been a key objective for the past few decades. Research and commercial activities have been focused on several aspects related to this main objective, such as implementing services over heterogeneous networks, providing scalable solutions and verifying network performance. However, less attention has been devoted to the interaction of these technical aspects with the business plane. Although several quality-based pricing schemes have been proposed, reimbursement proposals, while quite common in other scenarios as health, hotel reservation or airlines, are still rare in the field of Internet Economics. In this work, we propose a simple pricing scheme and study it in detail, in order to use Quality of Service monitoring information as feedback to the business plane, with the ultimate objective of improving the seller’s revenue. In our framework, Assured-Quality Services are sold through first-price auctions, and in case of failure, a percentage of the price paid for the service is given back to the buyers. We derive the expression for the willingness to pay and we model the reimbursement problem through a zero-sum Stackelberg game. We show that the Nash equilibrium of such game implies reimbursing 100 % in case of failures.