The relevance of irrelevance in brand communication

Brand managers strive to achieve an outstanding position in the psyche of the user by differentiating the product and service. In order to do so, brands are now often promoted by communications that focus on a trivial attribute difference. The current study tests both how the use of such an irrelevant attribute affects the perceptions of the consumer and how they rate the brand when the irrelevance of the attribute is previously revealed. The results of a controlled experiment (n = 894) show that the use of irrelevant attributes generally has a positive effect on buying behavior and that this effect is obtained even when the actual irrelevance is previously proven to the consumer. Further, the results are consistent across a variety of outcome variables, including attention, perceived uniqueness, price fairness, attitude toward the brand, and intention to buy the brand. © 2010 Wiley Periodicals, Inc.     

What Can Acreage Allocations Say about Crop Supply Elasticities? A Convex Programming Approach to Supply Response Disaggregation

This article has two goals. The first is to extend previous results regarding calibration of land‐constrained programming models of agricultural supply against supply elasticities to the general case of multiple constraints. The second goal is to demonstrate how the resulting calibration conditions can be used as a source of identification to disaggregate crop supply elasticities down to the level at which static information on acreage allocations is available. We propose an information‐based disaggregation algorithm to systematically generate regionalised elasticities from a single prior, and provide an empirical illustration.     

CIVIL WAR EXPOSURE AND VIOLENCE

In recent years scholars have begun to focus on the consequences of individuals' exposure to civil war, including its severe health and psychological consequences. Our innovation is to move beyond the survey methodology that is widespread in this literature to analyze the actual behavior of individuals with varying degrees of exposure to civil war in a common institutional setting. We exploit the presence of thousands of international soccer (football) players with different exposures to civil conflict in the European professional leagues, and find a strong relationship between the extent of civil conflict in a player's home country and his propensity to behave violently on the soccer field, as measured by yellow and red cards. This link is robust to region fixed effects, country characteristics (e.g. rule of law, per capita income), player characteristics (e.g. age, field position, quality), outliers, and team fixed effects. Reinforcing our claim that we isolate the effect of civil war exposure rather than simple rule breaking or something else entirely, there is no meaningful correlation between our measure of exposure to civil war and soccer performance measures not closely related to violent conduct. The result is also robust to controlling for civil wars before a player's birth, suggesting that it is not driven by factors from the distant historical past.     

ASYMPTOTICS OF IMPLIED VOLATILITY IN LOCAL VOLATILITY MODELS

Using an expansion of the transition density function of a one‐dimensional time inhomogeneous diffusion, we obtain the first‐ and second‐order terms in the short time asymptotics of European call option prices. The method described can be generalized to any order. We then use these option prices approximations to calculate the first‐ and second‐order deviation of the implied volatility from its leading value and obtain approximations which we numerically demonstrate to be highly accurate.     

Path dependence view of export behaviour: A relationship between static patterns and dynamic configurations

The main objective of this work is to understand the extent to which a relationship exists between static patterns and the dynamic configurations of a firm's export behaviour. The premise of our investigation is that the set of exporting decisions adopted over a period of time can be explained, in part, by the export pattern of the firm at the start of that period. Our empirical work is based on a sample of 754 exporting firms covering a 4-year period (2002–2006). Data were obtained from the Survey of Business Strategies (SBS). Our results support the path dependent focus of internationalisation, find some interdependences among three dimensions of export behaviour (extent, entry mode and scope), in static and dynamic fields, and support the idea that export experience influences some of the changes in foreign behaviour at one point in time, but not all. Our work contributes to the literature as it is one of the first works that (1) simultaneously analyses static and dynamic variables; (2) establishing relationships between both variables; (3) different dimensions of international export behaviour are introduced jointly; and (4) these relationships are contextualised according to the firm's export experience.     

The design of optimal climate policy with air pollution co-benefits

This paper develops a model of an optimal regulatory program for greenhouse gases (GHGs) emissions that accommodates the benefits due to reductions of co-pollutants including: sulfur dioxide (SO₂), nitrogen oxides (NO_x), volatile organic compounds (VOC), and fine particulate matter (PM_2.5). Employing per ton damage estimates for the co-pollutants produced by an integrated assessment model, co-pollutant damage estimates per ton carbon dioxide equivalent (CO₂e) are developed for over 10,000 sources of GHGs in the lower 48 states including both transportation sources and electric power generation. For coal-fired electric power generation, the co-pollutant damages are larger in magnitude than recent peer-reviewed estimates of the marginal damage for GHGs. The co-pollutant damage per ton CO₂e varies considerably across source types and source location. The paper estimates the welfare gain from adopting a policy that encompasses the spatially variant co-pollutant damage to be between $1 million and $85 million annually. The range depends on the slope of the marginal abatement cost curve. The paper also shows that a distortionary aggregate emission cap reduces the advantage of differentiated policy. Provided an excessively strict cap, the spatially differentiated policy may reduce aggregate welfare. This result has important implications for GHG policy in the United States; although co-pollutant benefits of abating GHGs have been shown to be significant in magnitude, tailoring climate policy to reflect these source-specific co-benefits is not necessarily socially beneficial. This bolsters arguments for upstream policy designs.     

The relationship between cultural values and learning preference: the impact of acculturation experiences upon East Asians

Globalization and technology advancement are creating more biculturalism at workplaces and learning settings. However, little is known about acculturation experience and its influence on a person's cultural values and learning preference. The research reported in this study investigates the impact of acculturation experiences upon the relationship between cultural values and learning preference of 292 Far East Asians (from Confucian‐influenced societies) and Asian Americans. Different preferences for learning methods and different levels of traditional cultural values were found between these two groups of adult learners. Acculturation experience was identified as the influential factor for the differences. However, they all still retain their traditional cultural values in various degrees regardless of the length of time the individual had been exposed to the acculturation experience. The impact of cultural values on an adult's learning preference is an area of concern in cross‐cultural training and development.     

Comment on “A new simple square root option pricing model”

Câmara A. and Wang Y.‐H. ( 2010 ) introduce a simple square root option pricing model where the square root of the stock price is governed by a normal distribution. They show that their three‐parameter option pricing model can outperform the Black–Scholes option pricing model. We demonstrate that their assumption possesses an internal inconsistency in that the square root of the stock price can take on negative values. We generalize and revise their assumption so that the internal inconsistency can be avoided, and introduce a new square root option pricing model. The difference in option prices calculated from the two models may not be trivial. © 2011 Wiley Periodicals, Inc. Jrl Fut Mark