Myopia and Addictive Behaviour

We present a theory of addictive behaviour which can account for addicts' apparent disregard for the future consequences of their current actions. The discounting of future utility is increasing in past consumption, indicating increasingly myopic behaviour as consumption increases. The intertemporal complementarity generated by the endogenous discounting produces multiple steady states which can account for the simultaneous existence of myopic addicts and non-myopic non-addicts within a time consiste nt expected utility framework. The theory also accounts for the probabilistic incidence of addiction and successful rehabilitation and the possibility of recurrence.     

Is there a “reform fatigue” in the euro area?

The absence of monetary policy within a currency union increases the need for structural reforms that make the participating economies more flexible. However, the absence of exchange rate risk with respect to the other members of the union may reduce the urgency for such reforms. A number of other considerations also suggest that theory is ambiguous about the impact of participating in a currency union on progress in structural reforms. This paper addresses this issue empirically for the euro area. The results suggest that reforms in the euro area seem to have decelerated following the introduction of the euro, but from a fast pace. The paper discusses a number of possible explanations, including “reform fatigue,” the absence of “market punishment,” and “good-times” complacency. Estimates from an empirical growth model suggest that the slowing of reforms may slow down annual output growth by up to 0.2%. However, the results are preliminary and depend on the area of reform considered. Furthermore, the reform dynamics may change with the euro area starting slowing at the end of 2007.     

Testing for efficiency in selected developing foreign exchange markets: An equilibrium-based approach

This paper proposes an alternative way of testing FOREX efficiency for developing countries. The FOREX market will be efficient if fully reflects all available information. If this holds, the actual exchange rate will not deviate significantly from its equilibrium rate. Moreover, the spot rate should deviate from its equilibrium rate by only transitory components (i.e. it should follow a white noise process). This test is applied to three Central and Eastern European Countries — members of the EU. Considering an LSTAR model we find no evidence of nonlinear adjustment in the misalignment series. So, linear unit root tests imply that the Poland/Euro FOREX market is efficient, the Czech/Euro FOREX market is not, while the Slovak/Euro FOREX market is quasi-efficient.     

Predicting direction shifts on Canadian–US exchange rates with artificial neural networks

The paper presents a variety of neural network models applied to Canadian–US exchange rate data. Networks such as backpropagation, modular, radial basis functions, linear vector quantization, fuzzy ARTMAP, and genetic reinforcement learning are examined. The purpose is to compare the performance of these networks for predicting direction (sign change) shifts in daily returns. For this classification problem, the neural nets proved superior to the naïve model, and most of the neural nets were slightly superior to the logistic model. Using multiple previous days' returns as inputs to train and test the backpropagation and logistic models resulted in no increased classification accuracy. The models were not able to detect a systematic affect of previous days' returns up to fifteen days prior to the prediction day that would increase model performance. Copyright © 2001 John Wiley & Sons, Ltd.     

The role of voluntary sport organisations in leveraging the London 2012 sport participation legacy

ABSTRACT

This study aimed to understand the perceptions of national Voluntary Sport Organisations (VSOs) managers towards a mega sports event and identify the components they felt enhanced or inhibited their organisations capacity to implement a sport participation legacy. London 2012 was the first Olympic Games to explicitly attempt to deliver this type of legacy, and an exploratory, online mixed-method survey examined the perceptions of 105 senior managers from 37 VSOs, post-event. Principal Component Analysis identified four distinct factors: ‘objectives, standards & resources’, ‘event capitalisation & opportunities’, ‘monitoring & evaluation’ and ‘club engagement & implementation’, explaining 51.5% of the variance. Also, relevant organisational characteristics such as sport type, funding and sport size were examined to investigate the influence this had on their capacity. From these findings, the main recommendations are that future mega sport event hosts should: 1) Engage and consult with multiple stakeholders to engender sustained sport participation. 2) Set clear and monitorable objectives. 3) Establish funding and support mechanisms relevant to each sport. 4) Engage non-competing sports in the leveraging process. 5) Finally, event organisers should try to ensure personnel consistency.     

The usefulness of Schwartz's ‘Values Theory’ in understanding consumer behaviour towards differentiated products

Abstract

The Values Theory adopts a generic framework whereby a set of values is employed across consumer decision-making contexts in a manner that makes no distinction among various product categories. The present study advances this theory by exhibiting the adaptation capability of the generic values instrument (the Portrait Value Questionnaire, PVQ), demonstrating that tailor-made PVQ versions can reflect consumers' motives towards differentiated products (i.e. organic foods). A questionnaire was completed by approximately 1000 households in each of eight EU countries (N?=?8171). The organic food-relevant PVQ was developed through a preliminary qualitative phase (i.e. a means-end chain analysis), and its factorial design was validated through CFA, showing high statistical performance. PVQ-based European clusters with strong self-transcendence values comprised large numbers of organic purchasers. Moreover, results point to the fact that when a circumplex taxonomy, such as the PVQ, is applied in a real context (i.e. organic food purchases), the situation-relevant value domains merge into new hierarchical dimensions in absolute respect of the original taxonomy. This conclusion points to PVQ's robustness in adaptability to different situations of human value perspective.     

Internet shopping and internet banking in sequence: An explanatory case study

Adoption of Internet banking often follows on from usage of Internet shopping, but policies to increase Internet banking use typically ignore this ordering. This article presents a case study that underscores this sequence of Internet service adoption and identifies factors that shape the propensity to use the Internet for shopping and banking. Application of bivariate probit regression techniques to data sourced from a survey of 259 respondents in Athens, Greece, and estimation of marginal effects of the determinants of Internet banking use conditioned on the determinants of Internet shopping use illustrate that ignoring the sequence of Internet service use can lead to incorrect policy recommendations. This article contributes to the literature by theorising the underlying causal mechanisms of Internet banking adoption and presenting supporting evidence via a sequential modelling approach. We find that personal capacity is an important determinant of Internet banking use in a standard, non-sequential approach but it has no significant effect when the model is sequential. Our results suggest that policymakers should emphasise usefulness attributes of Internet banking when attempting to increase Internet banking usage by people who already use the Internet for shopping.     

A short proof of Deb’s Theorem on Schwartz’s rule

Schwartz in (Nous,7, 1972, Definition, 3) introduces a generalization of the Condorcet criterion, which is the classical approach to rational choice in the context of cycles, and he defines the Schwartz set. Deb (J Econ Theory 16:103–110, 1977) shows that the Schwartz set consists of the maximal elements according to the transitive closure of the asymmetric part of a binary relation corresponding to a choice process or representing the decision maker’s preferences. This note provides a short and simple proof of Deb’s theorem on the characterization of the Schwartz set.     

Stock market prediction using evolutionary support vector machines: an application to the ASE20 index

The main motivation for this paper is to introduce a novel hybrid method for the prediction of the directional movement of financial assets with an application to the ASE20 Greek stock index. Specifically, we use an alternative computational methodology named evolutionary support vector machine (ESVM) stock predictor for modeling and trading the ASE20 Greek stock index extending the universe of the examined inputs to include autoregressive inputs and moving averages of the ASE20 index and other four financial indices. The proposed hybrid method consists of a combination of genetic algorithms with support vector machines modified to uncover effective short-term trading models and overcome the limitations of existing methods. For comparison purposes, the trading performance of the ESVM stock predictor is benchmarked with four traditional strategies (a naïve strategy, a buy and hold strategy, a moving average convergence/divergence and an autoregressive moving average model), and a multilayer perceptron neural network model. As it turns out, the proposed methodology produces a higher trading performance, even during the financial crisis period, in terms of annualized return and information ratio, while providing information about the relationship between the ASE20 index and DAX30, NIKKEI225, FTSE100 and S&P500 indices.     

The effects of fiscal policy on consumption in recessions and expansions

This paper explores in a yearly panel of nineteen OECD countries from 1970–2002 the effects of fiscal policy changes on private consumption in recessions and expansions. In the presence of binding liquidity constraints on households, fiscal policy is more effective in boosting private consumption in recessions than in expansions. The effect is more pronounced in countries characterized by a less developed consumer credit market. This happens because the fraction of individuals that face binding liquidity constraints in a recession will consume the extra income generated following an unanticipated tax cut or government spending increase.