Mean-variance cointegration and the expectations hypothesis

The present paper sheds further light on a well-known (alleged) violation of the expectations hypothesis of the term structure (EHT): the frequent finding of unit roots in interest rate spreads. We show that the EHT implies (i) that the nonstationarity stems from the holding premium, which is hence (ii) cointegrated with the spread. In a stochastic discount factor framework, we model the premium as being driven by the integrated variance of excess returns. Introducing the concept of mean-variance cointegration, we actually find cointegration relations between the conditional first and second moment of US bond data.     

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Brand alliance and customer‐based brand‐equity effects

This research examines brand alliances, a specific marketing strategy designed to transfer the positive brand equity of two or more partner brands to the newly created joint brand. The study explores how customer‐based brand equity (that is, brand equity as seen from the customer's perspective) of partner brands affects consumer evaluations of an alliance brand; how the brand equity of one partner brand affects the other; how customer‐based brand equity of the partner brands affects consumers' evaluations of the search, experience, and credence attribute performance of the alliance brand; and how product trial influences such evaluations. Results suggest that merely the act of pairing with another brand elevates consumers' evaluations of the partner brands' customer‐based brand equity, and high‐equity partners enhance pretrial evaluation of experience and credence attributes that are relevant to the high‐equity partner. As hypothesized, product trial moderates the equity value of the alliance partner for experience attributes, and brand equity of the partner brands influences consumer perceptions of the alliance brand's equity. © 2004 Wiley Periodicals, Inc.     

Modeling model selection in model pluralism

ABSTRACT

In his recent book, Rodrik [(2015). Economics rules. Why economics works, when it fails, and how to tell the difference. Oxford University Press] proposes an account of model pluralism according to which multiple models of the same target are acceptable as long as one model is more useful for one purpose and another is more useful for another purpose. How, then, is the right model for the purpose selected? Rodrik roughly outlines a selection procedure, which we formalize to enhance understanding of his account of model pluralism and to advance the critical discussion.     

Inference by linearization for Zenga’s new inequality index: a comparison with the Gini index

Zenga’s new inequality curve and index are two recent tools for measuring inequality. Proposed in 2007, they should thus not be mistaken for anterior measures suggested by the same author. This paper focuses on the new measures only, which are hereafter referred to simply as the Zenga curve and Zenga index. The Zenga curve Z(α) involves the ratio of the mean income of the 100α % poorest to that of the 100(1?α)% richest. The Zenga index can also be expressed by means of the Lorenz Curve and some of its properties make it an interesting alternative to the Gini index. Like most other inequality measures, inference on the Zenga index is not straightforward. Some research on its properties and on estimation has already been conducted but inference in the sampling framework is still needed. In this paper, we propose an estimator and variance estimator for the Zenga index when estimated from a complex sampling design. The proposed variance estimator is based on linearization techniques and more specifically on the direct approach presented by Demnati and Rao. The quality of the resulting estimators are evaluated in Monte Carlo simulation studies on real sets of income data. Finally, the advantages of the Zenga index relative to the Gini index are discussed.     

Collective versus Random Fining: An Experimental Study on Controlling Ambient Pollution

This paper presents an experimental study oftwo different pollution compliance games:collective vis-à-vis random fining as ameans to regulate non-pointpollution. Using samples from both Costa Ricancoffee mill managers and Costa Rican students,we find that the two games perform equivalentlybut, although they lead to efficient outcomesthrough Nash play in the majority of cases, theobserved frequency of Nash play is lower thantheoretically predicted. Moreover, we rejectthe hypothesis that managers and studentsbehave equally. Off the equilibrium, managerstend to over-abate, whereas students tend tounder-abate. This result suggests theimportance of considering subject pooldifferences in the evaluation of environmentalpolicies by means of experiments, particularlyif those policies involve certain forms ofmanagement decisions.     

The role of contingency awareness,involvement, and need for cognition in attitude formation

This research investigates the role of involvement and need for cognition in influencing contingency awareness in attitude formation. Two experiments examine the nature of favorable attitudes formulated through established classical conditioning procedures. The results of Experiment 1 indicate that awareness influences attitudes toward a conditioned stimulus, particularly under conditions of high involvement and high need for cognition. Experiment 2 suggests that contingency awareness mediates the relationship between inferential belief formation and attitudes and that this effect is stronger under high involvement and high need for cognition. Implications for understanding the role of classical conditioning procedures in advertising are discussed. Randi Priluck (Rpriluck@pace.edu) is an associate professor of marketing at Pace University in New York. She received her Ph.D. from Drexel University in 1995. Her research areas of interest include classical conditioning and its advertising implications, cobranding strategies, and relationship marketing. She has written articles for theJournal of Advertising, theJournal of Current Issues and Research in Advertising, theJournal of Product & Brand Management, Psychology & Marketing, theJournal of Consumer Marketing, theJournal of Marketing Management, theJournal of Marketing Practice: Applied Marketing Science, theInternational Journal of Consumer Marketing, theInternational Journal of Retail & Distribution Management, theJournal of Marketing Education, and theJournal of Services Marketing. Brian D. Till (Tillbd@slu.edu) is an associate professor and chair of marketing at Saint Louis University. He received his Ph.D. from the University of South Carolina in 1993. His research areas of interest include classical conditioning, cobranding strategies, and the use of celebrity endorsers in advertising. He has published in theJournal of Marketing Research, theJournal of Advertising, theJournal of Current Issues and Research in Advertising, Psychology & Marketing, theJournal of Product and Brand Management, and theJournal of Consumer Marketing.