Price ceilings and firm-specific quantity restrictions in posted-offer markets

The effect of price ceilings and quantity controls in experimental posted-offer markets on market efficiency and total output is compared. Quantity controls adversely affect market performance relative to price ceilings. In the quota experiments contract and total surplus realization is lower than under equivalent price controls. Welfare outcomes, in terms of market efficiency, for price ceilings and quantity controls in a market setting are not the same, at least in the short run. Different welfare outcomes from equivalent controls are attributed to the manner in which the price and quantity search space is ‘censored’ by the price and quantity controls.     

CAPITAL FORMATION AND THE INTERNET

The Internet is expected to play a significant role in the capital-raising process. Internet investment banks like Wit Capital and WR Hambrecht are supposed to make the IPO process more equitable by giving retail investors access to deals and pricing deals more accurately, thereby leaving less "money on the table" and lowering the cost of going public.
This article argues that the Internet will not replace, but will likely "supplement," the current system. The certification function provided by traditional investment banks and their relationships with institutional investors will continue to be important determinants of a successful offering. Thus, although Internet banks will get pieces of IPO transactions, the lead managers of such deals will continue to be older firms with well-established reputations and ties with institutions.
Nevertheless, the Internet is expected to play a larger role in the case of public bond offerings. Because the issuance of bonds is a repetitive business and the pricing is much simpler, the authors predict that the Internet will significantly reduce the costs of issuing bonds and perhaps limit the role of traditional investment banks in this process.     

Reforming the Governance of the International Monetary Fund

Democratising the governance of the IMF will significantly improve the institution's capacity to manage crises. The implementation of a democratic framework requires a reform of the Fund's ‘quota regime,’ which mediates the distribution of voting power. An optimal reform of the quota regime that reflects the increased weight of emerging economies requires matching the number of policy objectives with the number of policy instruments. Presently, there is a classic ‘assignment problem’ whereby one policy instrument (i.e., the quota regime) is aimed at achieving three objectives (i.e., member contribution obligations, access rights, and voting rights). Three different instruments need to be adopted. Member contributions should be based on member's capacity to pay; access to resources should be based on need; and voting rights should balance the rights of creditors with the principle of sovereign equality. These reforms will enhance the Fund's legitimacy and accountability as a forum for global economic policy‐making.     

International Trade Policy towards Monopoly and Oligopoly*

This paper highlights the importance of product differentiation and endogenous R&D in determining the optimal R&D policy, in a model where investment in cost‐reducing R&D is committed before firms compete in a differentiated‐goods third‐country export market. R&D is always taxed in oligopolies for high degrees of product differentiation. For lower degrees of product differentiation the duopoly is subsidized or the government remains inactive. In contrast, the monopoly is always subsidized. The government with a duopoly may be active or inactive depending on the degree of product differentiation. Thus, we may observe a reversal in the sign of the optimal R&D policy if the degree of product differentiation changes or, alternatively, if there is a change in the number of firms. Similar qualitative results hold if trade policy uses output subsidies, instead of R&D promotion.     

Using Commitments to Drive Consistency: Enhancing the Effectiveness of Cause‐related Marketing Communications

Research has consistently found that, despite a high degree of expressed concern about the environment, few individuals are willing to follow‐up this concern with behavioural actions in support of the environment, particularly when these actions require the individuals to absorb some costs. Using the theoretical framework of commitment–consistency theory, two studies were conducted in order to examine the effect of a small, active commitment to an environmental cause on consumer preference for an advertised product that supported that cause. The empirical results show strong support for the fact that persuading consumers to make an active commitment to a cause can serve as an important prerequisite for behavioural consistency (in terms of the willingness to buy a product). Further, the paper adds to the evidence on self‐perception theory as an underlying mechanism for the effectiveness of the technique. It is also found that, although commitment increases willingness to buy a product related to the cause, the effect works only when the cost associated with supporting the cause is minimal. The implications for marketing communications theory and practice are discussed.     

Contextual Richness in Teaching IB: Ethics,Language, and Social Factors

Internationalizing the business curriculum has been the subject of increased discussion and interest At the academic level, the realization of the need and the urging of accrediting bodies has brought forth internationalization efforts which vary from substantial to modest undertakings. This DaDer reDorts on a survey of business curriculum intemation'alization.&;ong ~J.s. business schbk. The results show a continuation of internationalization approaches similar to those reported in earlier studies. Also, approachis with a less immediate and direct impact on the business curriculum are being adopted, including the establishment of faculty exchange programs and international business centers.     

Interdependent self-construal in collectivist cultures: Effects on compliance in a cause-related marketing context

This study is a replication and extension of prior work on the effectiveness of cause-related marketing efforts. We show that compliance behavior across cultures can be different depending on the dominant self-construal paradigm prevalent in a given society. The original study had shown that people in independent self-construal societies (individualist countries such as the USA) are unwilling to follow up on their original commitment (to support rainforest protection) if compliance involves bearing the cost of such action (paying a higher price for a product where part of the price is donated to rainforest protection). This study, drawing on a sample of students at a mid-sized university in northern Poland, shows that commitment–consistency works in collectivist, interdependent self-construal societies in a different way: if the cause being supported is of a pro-social nature, people in such societies are willing to pay the higher product price to support it.     

Sovereign wealth fund governance and national culture

As sovereign wealth funds (SWFs) are owned and directed by sovereign governments which often have non-economic strategic motives and concomitant lack of transparency, there is much confusion, suspicion, and concern regarding the purpose of their investments. Strategic or non-economic motives for SWF investments are usually conveyed via respective governing boards of directors. Therefore, there is much need for understanding SWF governance. Using data for 49 large SWFs globally, we document significant and economically important evidence of the impact of national culture on SWF governance. Even when controlling for the quality of respective national governance, we find that poorer SWF governance is associated with the cultural dimensions of power distance, individualism, and most likely masculinity; while better SWF governance is associated with long-term orientation, indulgence and uncertainty avoidance. These results are consistent with what others have noted: good governance means different institutional dynamics in different countries (cultures). We also find that SWF governance is negatively associated with greater investment in foreign assets. Policy makers, capital-market participants, and managers will be interested in these results, as SWFs have become large and important global investors.