The Value of Online Seller Reputation: Evidence from a Price Comparison Site

This paper examines the value of seller reputation for e‐retailers trading via a price comparison site (PCS). E‐markets are widely held to accommodate sellers of differing service quality, including some who behave opportunistically. The paper uses a sample of offers on up to 295 digital cameras traded on a leading PCS, over a 134‐day period to estimate reputation's price impact. User‐generated reputation measures have a significant impact in the expected direction. However, their magnitude is small compared with variables capturing economy‐wide reputation. The strength of the reputation signal increased non‐monotonically with the number of reviews on which it was based. Copyright © 2015 John Wiley & Sons, Ltd.     

Hard globalization

Many companies aspire to be players in the global marketplace, but the challenges to succeed are now greater than ever. Steve Tappin and Andrew Cave spoke with the CEOs of strongly globalized companies to learn their secrets.     

Aspects of profitability that influence smallholder cash-crop preferences in northern Mozambique

This study analyses profitability in terms of relationships between various aspects, indicators and cash-crop cultivation preferences. Both financial and pragmatic aspects of profitability were found to be related to cash-crop preferences. Apart from the need to promote a crop with a good farm gate price and to reduce production and marketing costs, promoters need to strengthen the wider system by supporting profitability as well as household consumption requirements. The correlation between indicators of expected profitability improved as more financial and pragmatic aspects were incorporated. Smallholder farmers' rankings of profitability correlated better with cash-crop preferences when the analysis incorporated more aspects of profitability. In addition, the results indicated the institutional support needed to improve the profitability of cash crops. This simple method of identifying smallholder preferences for one cash crop among many is of paramount importance in the design of strategies for improving agricultural market participation.     

The Trade and Welfare Effects of State Trading in China with Reference to COFCO

The use of state trading to manage imports and exports has been a long‐standing feature of China’s agricultural trade regime. While the use of state trading was modified by China’s accession to the WTO, state trading still dominates for some commodities, even though there have been recent attempts to diminish its importance. In this paper, we analyse the potential trade distorting effect of COFCO on market access and export competition by drawing on some recent research on the impact of STEs on agricultural trade. By using a calibrated model of China’s imports of wheat and exports of maize, we are able to quantify the size of the trade distortions.     

Commercial Mortgage Pricing with Unobservable Borrower Default Costs

This paper develops a pricing model for commercial real estate mortgage debt that recognizes the influence of default transaction costs on the borrower's default decision. These costs are heterogeneous across borrowers and largely un-observable to the lender/investor at the time of origination or loan purchase. A recognition of these unobservable costs can explain why borrower default decisions may differ from those predicted by "ruthless" mortgage-default pricing models. We address the determinants of default choice and timing by replacing sharp default boundaries found in the ruthless models with "fuzzy" boundaries that account for investor uncertainty with respect to evaluating borrower default decisions. To implement our model, we estimate probabilities of default as a junction of time and net equity in the property. Then, given that default occurs, loss severities are modeled based on expected property value recovery net of foreclosure costs and time until the asset is actually sold. Under reasonable parameter value choices, resulting Monte Carlo simulations produce numerical mortgage price estimates as well as component default frequency and severity levels that realistically reflect default premiums and loss levels observed in the marketplace.     

The impact of jump risks on nominal interest rates and foreign exchange rates

This article investigates the relationship between the nominal interest rate and inflation and also the forward exchange rate under a general specification of the underlying processes govering the foreign exchange rate. There are three distinct risks that affect the relation between the real rate of interest and the nominal rate namely, consumption risk, diffusion risk, and the existence of jump risks of inflation. Jump risks lower the nominal interest rate because of jump hedging of a nominal bond. The forward exchange rate depends on the expected depreciation of the domestic currency as well as these three risks. As the domestic jump risks increase, the domestic nominal interest rate decreases and the forward exchange rate decreases.     

Consumer Behavior, Public Policy, and Country-of-Origin Labeling

Recent work by agricultural economists has failed to adequately identify why consumers desire country-of-origin labeling, a key piece of information needed to determine whether a market-failure exists. This paper brings to the attention of agricultural economists a sizable body of literature on country-of-origin effects from the marketing and business disciplines. Based on this literature, we draw a distinction between several consumer motivations for origin labels and we identify which of these is cause for public policy. We propose several research questions that require answers if the consequences of country-of-origin labeling policy are to be fully understood.     

Analysis of Employee Performance during Cross-cultural Service Encounters at Luxury Hotels in Hawaii,London and Florida

Globalization has motivated managers and scholars in the tourism industry to focus more attention on the problems and characteristics of the cross-cultural service encounter. During these interactions, differing cultural norms and values often create misunderstanding and conflict, which can result in an unhappy customer, a frustrated service provider and lost business. Therefore, the focus of this study was to analyze the effect of intercultural sensitivity on tourism employee performance in cross-cultural service encounters in three similar, but distinct service-dependent markets: the Hawaiian Islands, Greater London (UK) and the state of Florida. The results indicate that tourism employees with high intercultural sensitivity generally scored significantly (p < 0.05) higher than employees with low intercultural sensitivity in terms of service attentiveness, revenue contribution, interpersonal skills, job satisfaction and social satisfaction as they relate to cross-cultural encounters. There was no significant difference in results for motivation to work, tenure (years at present organization) and primary rewards (compensation, recognition, etc.). Implications of the findings are discussed.