Anchoring effects in experimental discount rate elicitation

Discount rates are often elicited using incentivized or hypothetical multiple price lists. We conduct two multiple price lists according to Coller and Williams (Experimental Economics 2: 107–127, 1999) with varying ranges of larger–later payments. Participants carry out both tasks and are randomly assigned to a task order as well as to a payment or no-payment treatment. Our results indicate that the range of the first completed task anchors discount rate decisions. Participants who begin the task with the lower range of the larger–later payments stated lower discount rates than participants who start with the task containing a wider range. Paying monetary incentives does not influence the detected anchor effect.     

The coming era of the financial executive: A broadened,less specialized role

Because corporate financing is becoming more complex, the role of financial executives is increasing in both importance and complexity. In addition to his traditional function of procuring funds from external sources, the new tasks of the financial executive will include generating funds from internal sources. His job will have to be broadened to include actively managing all of the corporations's major balance sheet items, and the author presents seven key questions a financial executive must consider in facing these new tasks. Thus, his role will be less specialized; it will require a knowledge of and experience with general management. The financial executive will increasingly become directly involved in the strategic issues handled by top management.     

Consumer Responses to Homosexual Imagery in Advertising: A Meta-Analysis

Rising support for the lesbian, gay, bisexual, and transgender (LGBT) community, paired with the considerable buying power of this group, has triggered increasing interest from marketers in the gay and lesbian market. Many companies have developed advertising with homosexual imagery to better target this group as well as the mainstream market. The findings on the persuasive effects of homosexual imagery are mixed and do not provide insights on whether and when homosexual imagery in advertising supports persuasion. To resolve the inconsistencies in findings of prior research, this article presents a meta-analysis on the effects of homosexual imagery. The integrated effect size suggests that the net persuasive effect between homosexual and heterosexual imagery does not differ. We find, however, that homosexual consumers show negative responses to heterosexual imagery. Furthermore, the moderator analysis suggests that incongruence between imagery, consumer characteristics, cultural values, explicitness of imagery, endorser gender, and product type results in unfavorable responses to homosexual advertising imagery. These findings provide guidelines for future research and implications for advertisers who intend to address consumers of various sexual orientations.     

Twenty years of agricultural policy review and forecast

In a lecture on the occasion of the twentieth anniversary of his Institute for Rural Structural Research in Frankfurt Professor Dr Hermann Priebe, the agronomist and economist, subjected the agricultural policy of the EC to a critical review¹. For the reform of the Common Agricultural Policy, which is socially and financially unsustainable in its present form, he proposed changes which make economic sense and are not politically unattainable.     

Short sales restrictions and the security market line

A reformulation of the CAPM is derived by taking account of short-sales restrictions on both risky and safe assets. The induced security market line is shown to be consistent with the empirical security market lines of various researchers.     

Einkommens- und Vermögensverteilung — zu ungleich?

The distribution of income and wealth in Germany grew increasingly unequal until the beginning of the financial crisis. But inequality has not risen in either Germany or Switzerland since 2005. Nevertheless, Germans overestimate inequality. The German gap between reality and perception of inequality is important to investigate, as the subjective assessment of inequality influences redistribution preferences. Rising inequality may damage social stability and democracy, but it is unclear whether economists are able to assess a “proper and just” distribution. Interdependencies are discussed: Does a more equal distribution create negative effects on economic growth? How does Germany rank internationally with regard to distribution? Social mobility rates differ substantially across countries; what are the implications for economic policy?