Enforced saving as an alternative to taxation policy in the fight against cost inflation

The author argues that an incomes policy with an element of enforced saving could be an effective way of combating cost inflation     

Consumer brand confusion: A conceptual framework

A definition and theoretical framework for consumer brand confusion are developed. Brand confusion is distinguished from related terms, such as uncertainty, miscomprehension, infringement, and deception. The factors affecting the likelihood of brand confusion are extended beyond stimulus similarity to include individual and situational factors, and propositions regarding the effects of individual and situational factors are developed. The value of a better understanding of consumer brand confusion to managers and policy makers is discussed.     

A general theory of controllability and expectations anchoring for small-open economies

Rational expectations are often used as an argument against policy activism, as they may undermine or neutralize the policymaker’s actions. Although this sometimes happens, rational expectations do not always imply policy invariance or ineffectiveness. In fact, in certain circumstances rational expectations can enhance our power to control an economy over time. In those cases, policy announcements can be used to extend the impact of conventional policy instruments. We present a general forward-looking policy framework and use it to provide a formal rationale for testing when policymakers can and cannot expect to be able to manage expectations. To describe the relevance of our results applications are shown for policy design in small-open economies. Those are the cases where domestic policies are at their weakest and our ability to influence expectations most constrained.     

Are executive stock option exercises driven by private information?

In this study, we investigate the extent to which exercise of executive stock options is based upon private information. Contrary to popular belief, we find that shares are held more than 30 days following over a quarter of options exercised. Partitioning the data, we find weak evidence that decisions to exercise and sell immediately are prompted by bad news and stronger evidence that decisions to exercise and hold for at least 30 days are prompted by good news. Enhancing the power of our tests by considering several factors important to exercise decisions, we find that the higher the opportunity costs of early exercise as measured by the time-value of options, the greater the trading profits to executives. We also find that the greater the disguise provided by incentives to diversify and consume as measured by the depth of options in the money, the greater the trading profits to executives who exercise and sell. Turning to non-exercise decisions, we find that a strategy of holding options rather than shares to exploit good news yields positive abnormal returns consistent with theoretical predictions in the absence of dividends.

Implications of biased reporting: conservative and liberal accounting policies in oligopolies

We examine the effects of biased (conservative or liberal) reporting on product market competition. Cournot duopolists observe either firm-specific or industry-wide shocks and provide noisy reports subject to an exogenous mandated bias attributed to public policy. Given neutral prior beliefs, either a conservative bias or a liberal bias enhances overall reporting-system informativeness as measured by the reduction of uncertainty. Consistent with previously established effects in the information sharing literature regarding increases in informativeness, we show that expected industry profits and expected consumer surplus may gain or lose from bias, depending on whether the shocks are firm-specific or industry-wide and the degree of product competition. Expected social welfare, however, always increases in bias, irrespective of the source of uncertainty and product substitutability or complementarity. We next consider a setting where firms self-select whether to bias reports and characterize regions of potential conflict with a public policy that maximizes expected social welfare. Further results on the differential effects of conservative or liberal bias follow from relaxing the assumption of neutral prior beliefs.     

Response to price and production risk: The case of Australian wheat

A model of Australian wheat grower supply response was specified under the constrainsts of price and yield uncertainty, risk aversion, partial adjustment, and quadratic costs. The model was solved to obtain area planted. The results of estimation indicate that risk arising from prices and climate have had a significant influence on producer decision making. The coefficient of relative risk aversion and short‐run and long‐run elasticities of supply with respect to price were calculated. Wheat growers' risk premium, expected at the start of the season for exposed price and yield risk, was 2.8 percent of revenue or 10.4 percent of profit as measured by producer surplus. © 2000 John Wiley & Sons, Inc. Jrl Fut Mark 20: 345–359, 2000.     

The impact of cultural environment on entry-level auditors’ abilities to perform analytical procedures

We focus on the impact of three of Hofstede’s cultural dimensions, power distance, uncertainty avoidance, and individualism, on the results of analytical procedures conducted by entry-level auditors in Mexico and the U.S. Analytical procedures are ideal for this research as they require auditors to use professional judgment and appropriate levels of professional skepticism, abilities related to all three cultural characteristics. We find no other study investigating the impact of culture on the application of auditing procedures similar across the studied cultures.We find cultural characteristics do not affect the participants’ abilities to predict income statement balances, but they may influence the ability to predict changes in balance sheet accounts. We also find culture is associated with differences in risk assessments. Our results indicate that participants rarely differentiate accounts that change according to expectation from those that change contrary to expectation, but rather alter their risk assessments to match the direction of balances that increase or decrease.     

Gay men's holiday destination choice: a case of risk and avoidance

Gay men are subject to discrimination and social disapproval in many parts of the world. This paper examines the possible impact of this on choice of holiday destination, drawing on the concepts of risk and destination avoidance. A number of interviews were held with gay men and it was concluded that risk of adverse reactions and of the need to modify behaviour were significant issues in destination avoidance and choice. It is possible, as a consequence, to classify holiday‐taking by gay men into a typology including gay‐centric and gay‐related. In addition, it is appropriate to modify existing models of risk‐avoidance through the addition of the risks that are more applicable to gay men than to other tourists. Copyright © 2002 John Wiley & Sons, Ltd.     

Heritage Tourism in Singapore Chinatown: A Perceived Value Approach to Authenticity and Satisfaction

This study examines object-based and existential authenticity using a multidimensional approach to perceived value. The effects of value perceptions on satisfaction are also examined. Data was collected from tourists at the Singapore Chinatown heritage precinct. The findings revealed that object-based authenticity, existential authenticity, and perceived monetary value positively influenced overall perceived value and subsequently, satisfaction. This paper provides researchers with a theoretical framework of authenticity and perceived value for future empirical studies in the heritage tourism context. It also provides insight into how destination marketers and policy makers can develop effective and sustainable strategies for heritage destinations.