Index Volume VIII – 1974

This article, written in the first days of the Bush Administration, is part of what will no doubt be a flood of “end of term” assessments of the Reagan era. Much of this work, naturally enough, will be concerned with evaluating the economic record of that administration and discussing the economic legacy inherited by George Bush. This article, however, is a rather different endeavor; it is an attempt by two observers from across the Atlantic to explain the triumph in the United States of supply-side ideas.     

Further Evidence on the Value of Lectures in Elementary Economics

Buckles and McMahon have designed an experiment which can be used in all types of colleges to provide evidence on the best methods of teaching elementary economics. They have tested the hypothesis that class lectures which do no more than recapitulate assigned readings fail to help students learn elementary microeconomic theory. Grade point average and performance on the TUCE pretest were found to be important variables, but attendance at lectures was not. The authors discuss the implications of their findings and suggest further research efforts.     

Asian food: the global and the local

Advertising practice makes use of emotional cues and addresses consumers' rising desire for social connection. Research has investigated emotions within advertising, but mainly focused on negative or positive emotions. Traditional academic approaches to the analysis of persuasion according to the elaboration likelihood model (ELM) tend to emphasize central processing and thus rational advertising cues. Moreover, the role of motivation within the ELM is underspecified. We introduce the Zurich Model of Social Motivation to the regulation of social distance and investigate the specific feeling of care and security. This feeling may serve as motivational component and emerge as persuasion instrument within advertising. We seek to find means to activate viewers, independent from involvement. As we initially apply the model, we match constructs from advertising research to the framework. The feeling of care and security is determined by the autobiographical fit, the amount of personal resemblance, and familiarity with the cue. Realism of the story describes the (psychological) distance, whereas emotionality of the story refers to relevancy of the objects shown. We apply a structural equation modelling approach to test our hypotheses with smart partial least squares. Autobiographical fit is the strongest driver, followed by the realism and emotionality of the story. The feeling of care and security significantly predicts attitude toward the advertisement Group comparison according to Chin by the level of involvement shows that all causal relations remain stable for both sub-groups. Our findings suggest that specific emotional cues may have a special role within information processing and that there is no need to always focus on the central route of processing.     

Book review

Bayard, Thomas O., and Kimberly Ann Elliott, Reciprocity and Retaliation in U.S. Trade Policy, Washington, DC: Institute for International Economics, 1994, 503 pages.

Rugman, Alan M. (Ed.), Foreign Investment and NAFTA, Columbia, SC: University of South Carolina Press, 1994, xii + 340 pages.

Zahra, Shaker A., and Abbas J. Ali (Eds.), The Impact of Innovation and Technology in the Global Marketplace, Binghamton Haworth Press, 1994, 222 pages.

Connolly, Michael, and Jaime de Melo (Eds.), The Effects of Protectionism on a Small Country: The Case of Uruguay, Washington, DC, The World Bank, 1994, 172 pages.

Andersson, Thomas, Managing Trade Relations in the New World Economy, New York: Routledge, 1993, 183 pages.

Rondinelli, Dennis A. (Ed.), Expanding Sino-American Business and Trade: China's Economic Transition, Westport, CT: Quorum Books, 1994, ix + 270 pages.

Chukwumeiue, Okezie, Choice of Law and International Commercial Arbitration, Westport, CT: Quorum, 1994, xii + 218 pages.

Welford, Richard, and Kate Prescott (Eds.), European Business: An Issue Based Approach, 2nd Edition, Philadelphia, PA: Trans Atlantic Publishers, Inc., 1994, 384 pages.

Copeland, Laurence, Exchange Rates and International Finance, Second Edition, Reading, MA: Addison-Wesley, 1994, xiv + 455 pages.

Surajaras, Patchara, and Richard Sweeney, Profit-Making Speculation in Foreign Exchange Markets, Boulder, CO: Westview Press, 1992, 280 pages.

Esty, Daniel C., Greening the GATT: Trade, Environment, and the Future, Washington, DC: Institute for International Economics, 1994, 319 pages.

Scherer, F. M., Competition Policies for an Integrated World Economy, Washington, DC: The Brookings Institution, 1994, xxii + 133 pages.

Safarian, A. E., Multinational Enterprise and Public Policy: A Study of the Industrial Countries, Hants, England: Edward Elgar Publishing Limited, 1993, 581 pages.     

The State of Network Organization: A Survey in Three Frameworks

In this article, I seek to define the boundaries and attributes of network organizations, why these structures emerge, and when they are likely to be successful. I review the literature on network organizations and interpret explanations for their behaviors in terms of principles drawn from computer science, economics, and sociology. These 3 disciplines emphasize different attributes, but settle on a number of common themes.     

Insider trading around auto recalls: Does investor attention matter?

Review of Quantitative Finance and Accounting - Using a comprehensive sample of customer complaints filed with the National Highway Traffic Safety Administration, we examine the...     

Dispersion trading: Empirical evidence from U.S. options markets

This paper develops empirical evidence on the viability of a form of volatility trading known as “dispersion trading.” The results shed light on the efficiency with which U.S. options markets price volatility.Using end-of-day implied volatilities extracted from equity option prices for the stocks that comprise the S&P 500, the implied volatility of the S&P 500 is computed using a modification of the Markowitz variance equation. This Markowitz-implied volatility is then compared to the implied volatility of the S&P 500 extracted directly from index options on the S&P 500. These contemporaneous measures of implied volatility are then examined for exploitable discrepancies both with and without transaction costs. The study covers the period October 31, 2005 through November 1, 2007.It is shown that, from a trader's perspective, index option implied volatility tended to be more often “rich” and component volatilities tended to be more often “cheap.” Nevertheless, there were times when the opposite was true; suggesting that potential dispersion trades can run in either direction.     

Accuracy and effectiveness in appraisal outcomes: the influence of self‐efficacy,personal factors and organisational variables

Two studies tested relationships of personal factors and organisational context variables with rating accuracy and perceived effectiveness of appraisals, and the role of self‐efficacy as a mediator of the relationships between the two sets of variables. Study 1 was a controlled experiment in which nurse supervisors appraised a video stimulus of a nurse's performance. Study 2 was a field study in which nurses and their supervisors each independently completed an assessment of their annual appraisal review, following the meeting. A ten‐item scale for performance appraiser self‐efficacy (PASE) was developed and tested for measurement properties on a large sample of nurses that included those who participated in either Study 1 or Study 2. The PASE scale was found to have high reliability and reasonable predictive validity. PASE predicted rating accuracy, appraiser and appraisee perceptions of effectiveness, and appraiser‐appraisee agreement on the effectiveness of an actual appraisal, after controlling for the effects of personal factors and organisational context. The main contextual influences were accountability, importance and management concern but the effects varied for self‐efficacy and different appraisal outcomes. The main predictor of self‐efficacy was the amount of training received by appraisers across the multiple sub‐tasks of appraisal.     

Should the government be running job centres?

Most people find their jobs by means other than job centres. Since they are not a monopoly, what reason is there for government to run them? Can it even tell whether they are being run efficiently?