Work versus windfall: An exploration of saving on subsequent purchase

Previous research has examined the effects of discounts and promotions on the future performance of a brand or store. However, no attempts have been made to explore how a consumer psychologically accounts for the way a savings is obtained or how that accounting process affects subsequent purchase decisions. This research employs an experimental approach to test the hypothesis that buyers will spend more (save less) of a savings that they obtain from a windfall gain than an equivalent amount obtained from a worked-for savings. Results are generally supportive of the hypothesis, revealing that consumers do treat savings differently depending on how they are obtained. This finding appears to hold over a wide range of saving magnitudes.     

Happy hour followed by hangover: financing the UK brewery industry, 1880–1913

ABSTRACT

In the last 15 years of the nineteenth century c.300 British brewers incorporated and floated securities on the stock market. Subsequently, in the 1900s, the industry suffered a long-lived hangover. In this article, we establish the stylised facts of this transformation and estimate the gains enjoyed by brewery investors during the boom as well as the losses suffered by investors during the bust of the 1900s. However, not all brewery equity shares suffered alike. We find that post-1900 performance correlates positively with capital-market discipline and good corporate governance and negatively with family control, but does not correlate with indebtedness.     

Nanotechnology: Mapping the wild regulatory frontier

This paper examines the phenomena of nanotechnology and takes some tentative steps towards defining new regulatory frontiers within which this technology may operate. While nanotechnology has attracted much attention with respect to its scientific and business potential, debate on associated ethical, policy, regulatory and legal aspects has been limited. This paper builds on the conceptual frameworks of Ayres and Braithwaite [Responsive Regulation: Transcending the Deregulation Debate, Oxford University Press, Oxford, 1992] and Grabosky [Discussion paper: Inside the pyramid: towards a conceptual framework for the analysis of regulatory systems, International Journal of the Sociology of Law, 25 (1997) 195-201], in order to address the regulatory challenges posed by the novel properties and products emerging from nanotechnology. The paper considers the current regulatory frameworks that impact upon nanotechnology in Australia, and concludes that there is an emerging regulatory gap between the exciting commercial advances being made in this sector and the community's expectations for regulatory safeguards and protections. The paper also concludes that, unlike earlier technologies, there is now a unique opportunity to carefully consider the benefits as well as the impacts of nanotechnology before it arrives. This will require clearer articulation of policy, regulatory and legal frontiers crucial to the emerging nano-age.     

Evaluating combined land conservation benefits from perennial pasture: lucerne (Medicago sativa L.) for management of dryland salinity and herbicide resistance in Western Australia*

The inclusion of perennial pasture phases in cropping rotations has been widely promoted throughout Australia for reducing the incidence of dryland salinity. To a lesser extent, they have also been promoted to enhance the management of herbicide‐resistant weeds. No previous economic analysis of perennial pasture has considered both of these benefits. This study combines a dynamic linear programming model to estimate the magnitude of salinity‐related benefits and a complex simulation model to assess the economics of herbicide‐resistance management. We present a case study of the perennial pasture lucerne (Medicago sativa L.) in the Wheatbelt of Western Australia, where the weed annual ryegrass (Lolium rigidum Gaudin) is resistant to multiple herbicide groups. Sequences incorporating lucerne are the most profitable land use at the standard set of parameter values if (i) annual ryegrass is resistant to all selective herbicides, (ii) the water table is so shallow (approximately < 3.5 m deep) that frequent rotation with perennials is required to avert soil salinisation, (iii) sheep production is highly profitable, or (iv) there is a combination of less extreme cases. The value of perennial pasture is sufficient under these circumstances to overcome its high establishment cost and the displacement of multiple years of crop. Consideration of dryland salinity and herbicide resistance are about equally important in evaluating the economics of lucerne; neither should be neglected.     

Optimisation of a Large,Constrained Simulation Model using Compressed Annealing

Simulation models are valuable tools in the analysis of complex, highly constrained economic systems unsuitable for solution by mathematical programming. However, model size may hamper the efforts of practitioners to identify efficiently the most valuable management strategy. This paper investigates the efficacy of a new stochastic search procedure, compressed annealing, for the identification of profitable solutions in large, constrained systems. The algorithm is used to examine the value of incorporating a sown annual pasture, French serradella (Ornithopus sativus Brot. cv. Cadiz), between extended cropping sequences in the central wheatbelt of Western Australia. Compressed annealing is shown to be a reliable means of considering constraints in complex optimisation problems relative to the incorporation of fixed penalty factors in standard simulated annealing and genetic algorithms. French serradella is found to be an economic break pasture in the study region when weed populations are high or sheep production is lucrative.     

Economic management of anthelmintic resistance: model and application*

The increasing prevalence of anthelmintic (drench) resistance in gastrointestinal parasite populations is decreasing the profitability of the Australian sheep industry. Refugia management can delay its development by not exposing a proportion of the worm population to chemical control. A dynamic‐optimisation model is used to assess the economic value of refugia for management of the worm species Teladorsagia circumcincta and macrocyclic lactone drenches in an application to Western Australian sheep flocks. A low rate of refugia (2 per cent) is most profitable under standard circumstances because it slows the development of resistance, but also reduces the proportion of the flock not exposed to chemical control. Frequent drench application should remain the primary method of control. However, its efficacy should be preserved through refugia management, rather than greatly reducing treatment frequency.     

Incentives to underprice

In an initial public offering, the choices made by issuers, such as the offer price, might not appear to be wealth maximizing. In this article, we argue that the choices are strategic. Based on the model developed by Barry (1989), we show that the average change in the issuer's wealth (4.52 per cent) is lower than the average loss implied by underpricing (12.09 per cent). Our results support the notion that the choices issuers make at the offering generate a compensatory benefit in the aftermarket. That the issuer may well not suffer a net wealth loss from the offering is in accordance with continued initial public offering activity.