The relative importance of time and dollar values in new product introduction decisions

This study investigates managerial sensitivity to timing differences in new product introduction decisions. Using a case scenario as the research setting, the study finds that in managerial decisions involving a choice between two-attribute alternatives (dollar value and time), respondents shifted their emphasis between attributes when they were personally affected by the decision outcome. Specifically, it was found that an additive constant manipulation (adding a constant to the dollar amount of each alternative) caused respondents to place more emphasis on the time attribute, and a multiplicative constant manipulation (multiplying the dollar amount of each alternative by a constant) caused them to place more emphasis on the dollar-value attribute.The study asks 108 subjects to assume the role of product manager in a case scenario and choose from among three two-attribute alternatives proposed by the case. The personal relevance of the decision was manipulated by telling respondents that the CEO in the decision scenario had stated publicly that the career of the decision maker would be (would not be) affected. The results show that the additive constant and multiplicative constant effects were only found when the decision outcomes would affect the respondents' career.     

Identification of consumers’ preferences when their choices are unobservable

Summary. We provide conditions under which the heterogenous, deterministic preferences of consumers in a pure exchange economy can be identified from the equilibrium manifold of the economy. We extend those conditions to consider exchange economies, with two commodities, where consumers preferences are random. For the latter, we provide conditions under which consumers heterogenous random preferences can be identified from the joint distribution of equilibrium prices and endowments. The results can be applied to infer consumers preferences when their demands are unobservable.Received: 8 May 2003, Revised: 14 September 2004, JEL Classification Numbers: D12, D51.I am very grateful to an anonymous referee, Donald Brown, and Daniel McFadden for their detailed comments and insightful suggestions. Section 2 of this paper is joint work with Donald J. Brown; it is included here for publication with his permission. Those results were presented at the 1990 Workshop on Mathematical Economics at the University of Bonn, the 1992 SITE Workshop on Empirical Implications of General Equilibrium Models at Stanford University, and, more recently, at the June 2000 Conference in Honor of Rolf Mantel, in Buenos Aires, Argentina. The comments of the participants at those conferences and workshops are much appreciated. The research presented in this paper was supported by NSF Grants SES-8900291, SBR-9410182, and SES-0241858. This paper is dedicated to Marcel K. Richter, who has inspired much of my research.     

Effects of Adverse Selection on a Multinational Firm’s Decision on where to Subcontract

This paper analyses the effects of adverse selection on a multinational firm’s decision on where to subcontract. Adverse selection arises since subcontractor firms have more information than the multinational concerning their production costs. The results obtained show that adverse selection confers to subcontractor firms an advantage in their relationship with the multinational, inducing the multinational to subcontract in more than one country. In this way, adverse selection modelling outcomes justify, and are coherent with, the empirical evidence such as, the diversity of countries that multinational firms subcontract and the fast production relocation between countries.      

A Signalling Model of Firms' Foreign Direct Investment Relocation Decision

We analyse whether the foreign government can influence the multinational firm's relocation decision, through signalling the amount of subsidy it can grant. The foreign country is one of two possible types which differ on their investment conditions. Comparing the results obtained with an adverse selection model (the government knows the country type but the firm does not) with the results of a signalling model, we conclude that relocation is more likely, and the necessary subsidy is smaller, in the signalling model than with adverse selection. This can explain the proliferation of Investment Support Agencies worldwide.     

The value of coskewness in mutual fund performance evaluation

Recent asset pricing studies demonstrate the relevance of incorporating coskewness in asset pricing models, and illustrate how this component helps to explain the time variation of ex-ante market risk premiums. This paper analyzes the role of coskewness in mutual fund performance evaluation and finds evidence that adding a coskewness factor is economically and statistically significant. It documents that coskewness is sometimes managed and shows persistence of the coskewness policy over time. One of the most striking results is that many negative (positive) alpha funds, measured relative to the CAPM risk adjustments, would be reclassified as positive (negative) alpha funds using a model with coskewness. Therefore, performance ranking based on risk-adjusted returns without considering coskewness could generate an erroneous classification. Moreover, some fund characteristics, such as turnover ratio or category, are related to the likelihood of managing coskewness.     

The impact of unemployment on inequality and poverty in OECD countries

The purpose of this research is to examine the contribution of unemployment to income inequality and poverty in various OECD countries. These relationships have been explored using Luxembourg Income Study micro-data. Considerable differences across OECD countries are revealed through the use of within-household unemployment distributions. These differences help to explain most of the observed divergences in the relationship between unemployment and income distribution, in conjunction with the heterogeneous influence of social benefits on the economic position of the unemployed in these countries. A sub-group decomposition analysis corroborates the limited effect of unemployment on income distribution in most of the considered countries. However, it seems clear that the unemployed are among those with the highest risk of experiencing poverty.
JEL classification: D31, I32, J31.     

Land suitability,water balance and agricultural technology as a Geographic-Technological Index to support regional planning and economic studies

Land suitability, water balance and agricultural technological inputs are important characteristics of the soil as a natural resource and can play a significant role in the agricultural production and productivity. Based on these characteristics, a Geographic and Technological Index, the GeoTec Index, is proposed in order to help detecting regional agricultural income inequalities and also to be used as a geographic variable in economic studies. The GeoTec Index is built as a weighted average of three sub indices, namely, Land Suitability, Hydrological and Technological Indices. The Land Suitability Index is based on the agricultural suitability or the aptitude of a given land to support a defined agricultural use. The Hydrological Index (HyI) is based on a water balance which determines the potential and actual amounts of evapotranspiration and water surplus, or excess of precipitation over evapotranspiration, and corresponds to a number that represents either the annual soil water excesses or deficits. And the Technological Index is the sum of several sub indices, based on technological inputs used in the agriculture, such as soil conservation practices, farmer’s technical assistance, use of soil fertilizers and correctives, presence of electric power, use of pest and disease control and use of irrigation. The Geographic and Technological Index (GeoTec) is a combination of the Land Suitability, Hydrological and Technological Indices and it is calculated with data from Minas Gerais State, Brazil, for the period of 1990–2001. The criterion for the regional subdivision of Minas Gerais State was the one proposed by the Brazilian Institute of Geography and Statistics (IBGE), which divides the state into 66 micro regions. The highest values of GeoTec Index are obtained at micro regions of the most developed part of the state, whereas the lowest values of the GeoTec Index are found in micro regions located in the poorest part of Minas Gerais State. There was a strong and positive relationship between the GeoTec Index and the productivity of grains and, at the same time, there is a strong negative relationship between the GeoTec Index and the percentage of poor people in Minas Gerais State micro regions. The GeoTec Index can be a powerful instrument for detecting regional inequalities and to implement public policies as an attempt to decrease the agricultural income disparities among regions.     

Autonomy in trip planning and overall satisfaction

ABSTRACT

Tourists increasingly rely on Internet-based, autonomous resources to gather information, book, and pay for their trips; this increasing autonomy may affect their overall satisfaction. Using data about how Spanish tourists search for information and complete their bookings, this study analyzes the influence of tourist autonomy on overall satisfaction with the trip, as well as the effects of moderating characteristics related to both tourists and their trips. The results indicate a direct relationship between tourists’ autonomy and their overall satisfaction, as well as positive moderating effects of tourists’ previous travel experience and education, but negative moderating effects of trip complexity.     

New Geography of M&As: A Framing Device of Firms' Strategies

The emergence of new economic centers is changing the competitive scenario. The diffusion of power across an increasingly broad range of countries has opened a window of opportunity for firms from China that want to compete globally. These firms understand their options in exploiting economic geography, and they frequently use cross‐border mergers and acquisitions (M&As) to penetrate developed countries. The United States and Europe are becoming natural destinations for such investments because of their huge markets and leading‐edge technologies. This article provides a “framing device” for firms’ strategies in a multipolar world. © 2015 Wiley Periodicals, Inc.