Fear Appeals in Print Advertising: An Analysis of Arousal and Ad Response

Abstract

This paper examines the tenability of a two-dimensional (tension and energy) formulation of fear arousal effects in the context of print advertising. Intuitively, stimulation of fear parallels a two-part continuum of increasing tension. This exploratory study stems from the theoretical premise that increasing tension generates energy up to a certain point, and beyond that “threshold,” increasing tension arouses anxiety which begins to deplete energy. The study examines the effects of two print ad stimuli on the multidimensional structure of arousal, resulting attitude toward the ad and behavioral intention. The results indicate that print ad induced arousal effects fell short of the “threshold” point. However, a comparison between fear appeal treatment groups reveals that the stronger fear appeal resulted in arousal effects showing “progress” toward the threshold point. Thus, these results lend credibility to the idea of a “threshold” separating a two-part continuum of increasing tension. General implications of these results are discussed, and tentative suggestions in regard to the design and use of fear appeals using both print and video stimuli are furnished.     

Misalignment of the Baht and its Trade Balance Consequences for Thailand in the 1980s and 1990s

This paper examines Thailand's pre‐crisis exchange rate policy, focusing on the degree of the country's real exchange rate misalignment pre‐crisis and its consequent effects on Thailand's trade balance with its two large trading partners, the US and Japan, in the 1980s and 1990s. Defining misalignment as the difference between actual and ‘equilibrium’ exchange rates, we estimate three key ‘equilibrium’ exchange rates of the Thai baht: (a) the real effective equilibrium exchange rate of the Thai baht against its twenty‐two major trading partners; (b) the bilateral real equilibrium exchange rates of the baht against the US dollar; and (c) the bilateral real equilibrium exchange rate of the baht against the Japanese yen.     

Airline Travelers' Causal Attribution of Service Failure and Its Impact on Trust and Loyalty Formation: The Moderating Role of Corporate Social Responsibility

This study examines airline travelers' causal attribution (stability and controllability) and its impact on trust and loyalty formation and investigates the moderating role of corporate social responsibility (CSR) in this process. Based on a literature review, theoretical relationships between stability, controllability, CSR, trust, and loyalty were derived, and the moderating effects of CSR on relationships between stability/controllability and trust/loyalty were examined. To empirically test these theoretical relationships, quantitative data were collected from 271 airline passengers who experienced a service failure in the past year. The results provide support for effects of stability and controllability on trust as well as the effect of stability on loyalty. In addition, the perception of CSR had positive effects on trust and loyalty. Finally, a favorable CSR perception weakened the negative effects of a service failure on trust and loyalty, particularly when the failure was attributed to a stable cause. The results highlight the important role of CSR in service failure situations and have important implications for airline managers.     

The Financial Crisis and the Death (or Hegemony) of Development Economics

Development economics was the study of how to create the plumbing that would allow developing economies to become developed. The financial crisis leads us to question whether industrialized countries have the plumbing problem solved and thus leads us to question whether we need a development economics that is separate from macroeconomics. Indeed, it even leads us to question whether development economics should take as its goal the creation of the institutional plumbing that industrialized countries currently have. The consequence will be a blending of concerns that have been central in developing economies with the standard macro models. The blending can be seen as either the death of development economics or the hegemony of development economics.     

Estimated medical cost reductions associated with use of novel oral anticoagulants vs warfarin in a real-world non-valvular atrial fibrillation patient population

Objective:

Results of randomized clinical trials (RCT) demonstrate that novel oral anticoagulants (NOAC) are effective therapies for reducing the risk of stroke in non-valvular atrial fibrillation (NVAF). Prior medical cost avoidance studies have used warfarin event rates from RCTs, which may differ from patients receiving treatment in a real-world (RW) setting, where the quality of care may not be the same as in a RCT. The purpose of this study was to estimate the change in medical costs related to stroke and major bleeding for each NOAC (apixaban, dabigatran, and rivoraxaban) relative to warfarin in a RW NVAF population.

Methods:

Patients (n?=?23,525) with a diagnosis of NVAF during 2007–2010 were selected from a Medco population of US health plans. Stroke and major bleeding excluding intracranial hemorrhage (MBEIH) events were identified using diagnosis codes on medical claims. RW reference event rates were calculated during periods of warfarin exposure. RW event rates for NOACs were estimated by multiplying the corresponding relative risk (RR) from the RCTs by each reference rate. Absolute risk reductions (ARR) or number of events avoided per patient year were then estimated. Changes in medical costs associated with each NOAC were calculated by applying the ARR to the 1-year cost for each event. Costs for stroke and MBEIH were obtained from the literature. Drug and international normalized ratio monitoring costs were not considered in this analysis.

Results:

Compared to RW warfarin, use of apixaban and dabigatran resulted in total (stroke plus MBEIH) medical cost reductions of $1245 and $555, respectively, during a patient year. Rivaroxaban resulted in a medical cost increase of $144.

Conclusions:

If relative risk reductions demonstrated in RCTs persist in a RW setting, apixaban would confer the greatest medical cost savings vs warfarin, resulting from significantly lower rates of both stroke and MBEIH.     

Quantification of Operational Risk: A Scenario-Based Approach

In this article, I identify challenges to the loss distribution approach in modeling operational risk. I propose a scenario-based methodology for operational risk assessment, which recognizes that each risk can occur under a number of wide-ranging scenarios and that association between risks may behave differently for different scenarios. The model that is developed internally in the company provides a practical quantitative assessment of risk exposure that reflects a deep understanding of the company and its environment, making the risk calculation more responsive to the actual state, ensuring that the company is attending to its key operational risks. In this model qualitative and quantitative approaches are combined to build a loss distribution for individual and aggregate operational risk exposure. The model helps to portray the company's internal control systems and aspects of business environment. These features can help the company increase its operational efficiency, reduce loss from undesirable incidents, and maintain the integrity of internal control.     

The Squam Lake Report: Fixing the Financial System*

In these excerpts from The Squam Lake Report, fifteen distinguished economists analyze where the global financial system failed, and how such failures might be prevented (or at least their damage better contained) in the future. Although there were many contributing factors to the crisis—including “agency” problems throughout the financial system and a bankruptcy code poorly suited for reorganizing financial firms—at the core of the problem is a potential conflict between the risk-taking proclivity of financial institutions and the interests of the economy at large that must be managed at least in part through more effective regulation. The Squam Lake Report provides a nonpartisan plan to transform the regulation of financial markets in ways designed to limit systemic risk while preserving—to the extent possible and prudent—the economies of scale and scope that justify the existence of today's large financial institutions. To reduce the risks that large banks will fail, the authors call for higher capital requirements based on more effective assessments of the risks of bank assets and liabilities, as well as a new systemic regulator that should be part of the central bank. To reduce the costs of failure when it occurs, the authors propose that banks be required to create “living wills” laying out their plan to sell assets or shut down operations in the event of financial trouble. As part of that plan, regulators are urged to “aggressively encourage” banks to issue “contingent” debt capital securities that convert into equity.     

DEBT, FOLKLORE, AND CROSS-COUNTRY DIFFERENCES IN FINANCIAL STRUCTURE

Conventional wisdom has long held that, in relationship-based economies such as Japan and Germany, corporations are able to borrow more than U.S. companies, which in turn reduces their cost of capital and gives them a competitive edge. But such folklore does not stand up to scrutiny. In Japan and Germany, large businesses do not borrow more than U.S. companies–and, in fact, judging from coverage ratios, German companies (as well as U.K. companies) seem to borrow considerably less than their international competitors.
The article also reports that, in countries where financial markets are "transparent," the development of the banking sector has little additional impact on the growth of "financially dependent" industries. That is, although industries that require a lot of external finance grow faster in countries where the bank credit-to-GDP ratio is high, the growth rates of such industries are much more correlated with the level of accounting standards (with high standards serving as a proxy for well-developed capital markets) than with a strong banking system.