Optimal use of futures markets when input and output prices are uncertain

The purpose of this paper is to extend the analysis of the use of futures markets by a competitive firm facing an uncertain market price for its output to the case where both input and output prices are uncertain.     

I. Allgemeine wirstchaftslehre

Ohne Zusammenfassung     

Further evidence on the robustness of the Tobit estimator to heteroskedasticity

When the error terms in a Tobit model are heteroskedastic, the MLE which assumes homoskedasticity is inconsistent. For the special case of a constant-term-only model, we investigate the size of the inconsistency. The inconsistency is greater the greater the heteroskedasticity and the greater the degree of censoring (i.e., the greater the number of limit observations). However, the inconsistency is much smaller than in the corresponding truncated-normal model considered by Hurd.     

Multisource effects on the satisfaction formation process

Customer satisfaction research is integrated with research on higher education in developing a model of alumni satisfaction with college education. The model proposes that alumni satisfaction with higher education is a function of two performance and disconfirmation attributes: intellectual environment and employment preparation. The model was tested among 475 alumni of a major Eastern undergraduate business school and demonstrates the advantage of modeling the disconfirmation paradigm with multiple sources of satisfaction. She holds a Ph.D. in marketing from Michigan State University. Her work has appeared in theJournal of the Academy of Marketing Science, International Journal of Research in Marketing, Journal of Services Marketing, Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior, and proceedings of the American Marketing Association and the Association for Consumer Research. She was formerly an account executive at Needham Harper Worldwide and Director of Marketing at Maxwell Advertising. Her research interests include consumer satisfaction, complaining behavior, and advertising management. He received his Ph.D. in marketing from Michigan State University. His work has appeared in theJournal of Advertising, Journal of Retail Banking, Journal of Services Marketing, and theHaring Symposium Proceedings. He has held several positions in the banking industry, most recently as Group Vice President at Michigan National Bank in Grand Rapids. His research interests include services marketing, consumer satisfaction, and direct marketing. She received her Ph.D. in marketing from the University of Cincinnati. Her work has appeared in theJournal of Retailing, Industrial Marketing Management, Journal of Marketing Education, and other marketing-related publications. Her research interests include not-for-profit organizations, consumer satisfaction, and services marketing.     

Towards the implementation of the European Water Framework Directive?: Lessons learned from water quality simulations in an agricultural watershed

The main objective of the European Water Framework Directive (WFD) is the achievement of a good ecological and chemical status of the water environment (water bodies). This status corresponds to the limit value of Germany's Working Group of the Federal States on Water Problems Issues (LAWA) for water quality class II (3 mg/l total nitrogen). The rivers in the intensively cropped Upper Ems River basin (northwestern Germany) show total nitrogen concentrations in excess of 5–10 mg/l. Hence, the objective of our study was to find a land use and land management scenario that would reduce the total nitrogen concentration to meet the WFD requirements for good ecological and chemical status. We developed consecutive land use and management scenarios on the basis of policy instruments such as the support of agro-environmental measures by Common Agricultural Policy and regional landscape development programs. The model simulations were done by using the Soil and Water Assessment Tool (SWAT). Results of SWAT scenario calculations showed that drastic measures, which are unrealistic from a socio-economic point of view, would be needed to achieve the water quality target in the basin (reduction of arable land from 77.2% to 46% [13% organic farming], increase of pasture from 4% to 15%, afforestation from 10% to 21%, increase of protected wetlands from 0% to 9%, etc.). The example shows additionally that the achievement of the WFD targets is only possible with a consideration of regional landscape and land use distinctions. A related problem yet to be addressed is the general lack of measured water quality data with which to calibrate and validate water quality models such as SWAT. This adds considerable uncertainty to already complicated and uncertainty situations. Thus, improved strategies for water quality monitoring, and data accessibility must be established.     

What Drives the Consequences of Intentional Misstatements? Evidence from Rating Analysts’ Reactions

This paper aims to identify the mechanisms through which intentional misstatements adversely affect firms by analyzing rating analysts’ reaction to misstatements. In order to identify the mechanisms through which the misstatement affects firms’ credit ratings, we analyze the content of rating reports. Rating analysts are concerned about seven different mechanisms. They are most concerned about misstatement‐related violations of debt covenants that increase a firm's liquidity risk. We find that, subsequent to an intentional misstatement becoming publicly known, credit ratings of misreporting firms are adversely affected for up to seven years. The adverse impact of an intentional misstatement on a firm's credit rating is most pronounced in cases in which rating analysts mention concerns about misstatement‐related violations of covenants. Our results suggest that these covenant violations are the most severe mechanism through which misstatements adversely affect firms’ creditworthiness.     

Financial intermediation and the role of price discrimination in the foreign exchange market

Foreign exchange trading is performed in opaque and decentralized markets. The two-tier market structure consisting of a customer segment and an interdealer segment to which only market makers have access gives rise to the possibility of price discrimination. We develop a theoretical pricing model that accounts for market-power considerations and analyze a database of the trades of a foreign exchange market maker. We find that the market maker generally exerts low bargaining power vis-á-vis customers. The dealer earns lower average spreads on trades with financial customers than commercial customers, even though the former are perceived to convey exchange-rate-relevant information.