Equilibrium prices in the presence of delegated portfolio management

This paper analyzes the asset pricing implications of commonly used portfolio management contracts linking the compensation of fund managers to the excess return of the managed portfolio over a benchmark portfolio. The contract parameters, the extent of delegation, and equilibrium prices are all determined endogenously within the model we consider. Symmetric (fulcrum) performance fees distort the allocation of managed portfolios in a way that induces a significant and unambiguous positive effect on the prices of the assets included in the benchmark and a negative effect on the Sharpe ratios. Asymmetric performance fees have more complex effects on equilibrium prices and Sharpe ratios, with the signs of these effects fluctuating stochastically over time in response to variations in the funds' excess performance.     

Farming and tourism enterprise: Experiential authenticity in the diversification of independent small-scale family farming

This article examines the business choices made by independent farming families, when confronting the need to diversify away from traditional agricultural activities by starting farm-based tourism businesses. Based on interviews with farm family members who have set up tourism attractions on their farms, and drawing upon the concept of experiential authenticity, the article explores their self-conceptions of their family identities. In so doing, it addresses the choices and dilemmas facing farm families who attempt diversification through the tourism attraction route, and considers how this affects their attitudes towards more traditional farming activities. Using qualitative case study data, an empirically grounded framework is proposed that expresses the choices and challenges facing tourism entrepreneurial family farm members in the UK, through the conceptual lens of experiential authenticity.     

Corrigendum to “The strategic choice of union-oligopoly bargaining agenda” [Int. J. Ind. Organ. 17 (1999) 1029-1040]

Assuming Cournot competition, Bughin (1999, 'The strategic choice of union-oligopoly bargaining agenda', International Journal of Industrial Organization) states that in a unionized oligopoly with firm specific negotiations, Efficient Bargaining (EB) is always the industry equilibrium both under blockaded and non-blockaded market structures. Extending Bughin's (1999) framework to a conjectural variation model, this note shows that EB emerges as equilibrium only for entry deterrence reasons. In all other cases, conflict of interests among the bargaining parties arise due todifference in dominant strategies, whatever is the degree of competitiveness of the industry.     

GOVERNMENT BOND YIELDS AT THE EFFECTIVE LOWER BOUND: INTERNATIONAL EVIDENCE

Empirical evidence on the potential impact of central bank policies on government bond yields at the effective lower bound (ELB) is presented for nine economies. We quantify the content of central bank communications and consider international policy spillovers. Yields at the medium‐to‐longer end of the yield curve remain responsive to news for a few years after the ELB is reached. Yields become more sensitive to the content central bank communication at the ELB. Our results provide further evidence that central bank communication is an important element of monetary policy making when the interest rate tool loses efficacy. (JEL E52, E58, G12, F42)     

The symbolic politics of delegation: macroprudential policy and independent regulatory authorities

This paper investigates the motivations that led policy-makers to delegate macroprudential authorities to newly created independent systemic regulatory authorities (SRAs). Three case studies are examined: the US Financial Stability Oversight Council, the European Systemic Risk Board and the UK’s Financial Policy Committee. Policy-makers’ motivations are captured by examining the specific institutional features of the newly created SRAs and by tracing the legislative debates that surrounded their creation. The findings of this empirical analysis call into question several of the conventional claims that are used to justify delegation to technocratic agencies from the functionalist and ideational scholarship. Given the limitations of the explanations based on efficiency considerations and socialisation of welfare losses, this paper suggests that the delegation of powers to SRAs was ultimately motivated by what is referred to as the ‘logic of symbolic politics.’ It is argued that the main motivation that emerges from the legislative debates for delegating this important task is that the SRAs provided a quick institutional ‘fix’ to signal to the public that in the wake of the international crisis of 2007–2009, policy-makers were redressing regulatory mistakes made prior to and during the crisis that had caused a severe deterioration of public’s wealth.     

Price stickiness and the contractionary effect of technology shocks

We derive a measure of technological change from a dynamic cost minimization model that controls for imperfect competition, increasing returns and unobserved factor utilization. We estimate this measure using highly detailed panel data of a representative sample of Italian manufacturing firms for the period 1984-1997. Our key finding is that technological improvements result in a contraction of labor input on impact. In principle, this result can be reconciled with the transmission mechanism of flexible-price models by resorting to reorganization and reallocation effects. On the other hand, however, it is consistent with the predictions of a sticky-price model. Using survey information on the frequency of price revisions, we corroborate the latter interpretation, by showing that the contractionary effect of technology shocks is much stronger for firms with stickier prices.     

Markups and the Business Cycle: Evidence from Italian Manufacturing Branches

This paper investigates the markup of price over marginal cost in Italian manufacturing branches. The approach used is an extension of Hall's model that addresses some measurement shortcomings and theoretical limitations that may affect this class of model. The hypothesis of perfect competition is rejected in the majority of sectors over the period 1977–1995. The cyclical behavior of markups is found to vary significantly across branches, thereby helping to explain the contradictory evidence regarding the whole manufacturing sector reported in the literature. At branch level, industry concentration is found to be associated with countercyclical markups, providing scope for real effects of aggregate demand shocks. Finally, the size of the markup is negatively affected by both domestic and foreign competitive pressure.     

Corporate social responsibility,profits and welfare with managerial firms

This paper analyses the equilibrium outcomes in a duopoly market where firms follow corporate social responsibility (CSR) behaviours under managerial delegation. It is shown that in the subgame perfect Nash equilibrium of the game, both firms emerge as CSR-type, and the firms’ profitability (resp. the welfare of consumers and society) are beneficiated (resp. harmed) by the CSR behaviour. This result is in sharp contrast with the conventional result (established under non-managerial firms) that the higher the CSR sensitivity to consumer surplus, the lower (resp. higher) the firms’ profitability (resp. the consumer surplus and social welfare).     

Quality & Quantity journal: a bibliometric snapshot

This article analyzes the Quality & Quantity journal from the point of view of some bibliometric indicators: the Hirsch (h) and the g-index for journals, the total number of citations, the h- and the g-spectrum. Journal time evolution is also studied and discussed in detail. As a final point, an interesting issue about how to objectively evaluate the journal popularity in the professional world—rather than the scientific/academic—is presented and left open.