Spectrum Licensing,Policy Instruments and Market Entry

Competition policy attempts to address the potential for market failure by encouraging competition in service markets. Often, in wireless communication service markets, national regulatory authorities seek to encourage entry via the spectrum assignment process. Instruments used include the assignment mode (auction or beauty contest), setting aside licenses and providing bidding (price and quantity) credits for potential entrants, and making more licenses (spectrum blocks) available than there are incumbent firms (excess licenses). The empirical analysis assesses the effectiveness of these policy instruments on encouraging entry. The econometric results show that the probability of entry is enhanced by using auction assignments and excess licenses. Furthermore, quantity, but not price, concessions encourage entry.     

Social Preferences in the Lab: A Comparison of Students and a Representative Population

We report from a lab experiment conducted with a sample of participants that is nationally representative for the adult population in Norway and two student samples (economics students and non‐economics students). The participants make choices both in a dictator game (a non‐strategic environment) and in a generalized trust game (a strategic environment). We find that the representative sample differs fundamentally from the student samples, both in the relative importance assigned to different moral motives (efficiency, equity, and reciprocity) and in the level of selfish behavior. It is also interesting to note that the gender effects observed in the student samples do not correspond to the gender effects observed in representative sample. Finally, whereas economics students behave less pro‐socially than non‐economics students, the two student groups are similar in the relative importance they assign to different moral motives.     

Survey topic and unit nonresponse

Survey topic as a factor influencing participation rates is becoming increasingly important, as there is a growing trend in social science research for surveying specific populations about specific topics. Previous research has shown that respondents with high topic interest (often referred to as salience) are more likely to participate in surveys. However, the identification of mechanisms that affect respondents’ interest in a survey topic has been largely neglected in research literature. We present an explanatory model of participation that conceptualizes topic interest as a function of an actor’s relational position in a particular social setting. To illustrate the relationship between survey topic and participation behavior, we use an online survey on mating conducted on the user population of an online dating site. For our nonresponse analysis we use web-generated process data, consisting of profile and interaction data, which describe all units of the sample frame. Thus, comprehensive information is available for both participants and non-participants of the online survey on an individual level, enabling a particularly accurate analysis of nonresponse. Results show that the probability of participation varies according to a user’s chances of success on the mating market. Users who can be described as less attractive (e.g. older people, less educated men, overweight women) show a higher probability of participation, which we explain with the mechanism of topic salience. We conclude with general implications regarding (1) the relationship between survey topic and survey participation and (2) the potential of web-generated process data for (online) survey research.     

CANNABIS USE AND ITS EFFECTS ON HEALTH,EDUCATION AND LABOR MARKET SUCCESS

Cannabis is the most popular illegal drug. Its legal status is typically justified on the grounds that cannabis use has harmful consequences. Empirically investigating this issue has been a fertile topic for research in recent times. We provide an overview of this literature, focusing on studies which seek to establish the causal effect of cannabis use on health, education, and labor market success. We conclude that there do not appear to be serious harmful health effects of moderate cannabis use. Nevertheless, there is evidence of reduced mental well‐being for heavy users who are susceptible to mental health problems. While there is robust evidence that early cannabis use reduces educational attainment, there remains substantial uncertainty as to whether using cannabis has adverse labor market effects.     

How to Identify and Forecast Bull and Bear Markets?

Because the state of the equity market is latent, several methods have been proposed to identify past and current states of the market and forecast future ones. These methods encompass semi‐parametric rule‐based methods and parametric Markov switching models. We compare the mean‐variance utilities that result when a risk‐averse agent uses the predictions of the different methods in an investment decision. Our application of this framework to the S&P 500 shows that rule‐based methods are preferable for (in‐sample) identification of the state of the market, but Markov switching models for (out‐of‐sample) forecasting. In‐sample, only the mean return of the market index matters, which rule‐based methods exactly capture. Because Markov switching models use both the mean and the variance to infer the state, they produce superior forecasts and lead to significantly better out‐of‐sample performance than rule‐based methods. We conclude that the variance is a crucial ingredient for forecasting the market state. Copyright © 2016 John Wiley & Sons, Ltd.     

Why do promises affect trustworthiness,or do they?

We set out to test whether the effect of promises on trustworthiness derives from the fact that they are made (internal consistency) or that they are received (social obligation). The results of an experimental trust game appeared at first to support the former mechanism. Even when trustee messages are not delivered to trustors, trustees who make a promise are more likely to act trustworthy than those who do not make a promise. However, we subsequently ran a control treatment with restricted (non-promise) communication to examine whether the correlation between promises and trustworthiness is causal. The results show that the absence of promises does not decrease average cooperation rates. This indicates that promises do not induce trustworthiness, they are just more likely to be sent by cooperators than by non-cooperators.     

The Impact of Stress on Consumers' Willingness to Pay

Stress is a companion in most consumers’ lives and as such should impact purchase behavior in many ways. Drawing on construal‐level theory, which relates to information processing on different levels of abstraction, the authors propose that consumers’ stress deteriorates their evaluation of products. The latter effect results from a stress‐induced focus shift, from product characteristics with high levels of construal to those with low levels of construal (Study 1). This shift also decreases the price that consumers are willing to pay (Study 2), though the product category moderates the impact of stress on willingness to pay (WTP), such that the decline in consumers’ WTP is smaller for products characterized by lower levels of construal (Study 3). This research extends existing knowledge on the impact of relaxation on consumers’ WTP by including stress in the analysis. Effect sizes are similar to those in related studies. In terms of managerial implications, this study recommends decreasing consumers’ stress levels at the point of purchase and tailoring marketing mix activities to match prevalent stress levels, if firms hope to mitigate the negative effect of stress.