Effects of time horizon and asset condition on the profitability of technical trading rules

In much of the literature, the debate over technical trading strategies has centered around the question of whether an actively managed portfolio, controlled by a technical indicator, can outperform a passively managed portfolio. Typically, the time horizon is considered to be years. Additionally, the trader is assumed to use a technical trading strategy that is independent of asset conditions. These assumptions may not correspond well with reality. Traders often have much shorter time horizons and may switch between rebalancing or trading strategies on the basis of perceived shifts in market condition. This paper presents a study of the profitability of technical trading rules as a function of asset state or condition. Several common technical trading strategies were run on 296 stocks over a 15 year period. Strategies were run with 1 month rolling time horizons, significantly shorter than those used in similar studies in the literature. Stocks were segmented based on volatility and volume, which allowed for the examination of a strategy’s performance in different asset conditions. Several strategies were demonstrated to have consistently better risk-to-reward ratios under specific asset conditions and short time horizons. This finding helps to explain why some practitioners implement technical trading strategies.     

The Value of Changes in Deer Season Length: An Application of the Nested Multinomial Logit Model

Increasing deer populations can be controlled through manipulatingharvest limits or season length. While such actions often result in benefitsto hunters, both motorists and the agricultural sector also benefit as alower deer population leads to fewer incidences of harmful human-deerencounters. Traditional recreation demand models are often employed toexamine the welfare implications of changes in daily hunting bag limits.Studies measuring the effects of changes in season length, however, arenoticeably absent from the literature. This study uses a nested randomutility model to examine hunter choice over site and season selection toderive the values of changes in season length.     

Capitalism and democracy in the 21st Century: from the managed to the entrepreneurial economy*

 This paper explains how and why the developed countries are undergoing a fundamental shift away from a managed economy and towards an entrepreneurial economy. This shift is shaping the development of western capitalism and has triggered a shift in government policies away from constraining the freedom of business to contract through regulation, public ownership and antitrust towards a new set of enabling policies which foster the creation and commercialization of new knowledge. The empirical evidence from a cross-section of countries over time suggests that those countries that have experienced a greater shift from the managed to the entrepreneurial economy have had lower levels of unemployment.     

Choice Consistency and Preference Stability in Test-Retests of Discrete Choice Experiment and Open-Ended Willingness to Pay Elicitation Formats

This study tests the temporal stability of preferences, choices and willingness to pay (WTP) values using both discrete choice experiment (DCE) and open-ended (OE) WTP elicitation formats. The same sample is surveyed three times over the course of two years using each time the same choice sets. Choice consistency is positively correlated with choice certainty and choice complexity. The impact of choice complexity fades away in time, most likely as a result of learning and preference refinement. Although the OE WTP values remain stable over a time period of 2 years as in previous stated preference studies, DCE based WTP measures differ significantly, suggesting their use in benefits transfer may be limited.     

The Life Cycle of the U.S. Tire Industry

We introduce a new theory of industry evolution. According to our model, the nonmonotonicity in firm numbers found in many young industries is a consequence of the gradual decline in unit costs. Early stages of the industry life cycle, when unit costs and profit margins are high, display positive net entry rates. In later stages, declining unit costs and increasing competition limit the market room for (fringe) firms accumulating in a shakeout. The model explains paths of output, price level, and firm numbers using a recursive system of equations. We apply the model to the U.S. tire industry.     

Free Riding in Noncooperative Entry Deterrence with Differentiated Products

We examine free riding and underinvestment in noncooperative entry deterrence in the Gilbert and Vives (1986) model with differentiated products. Our analysis proves that for products that are differentiated enough, when both entry allowing and entry deterring equilibria coexist, the symmetric entry deterring equilibrium may Pareto dominate the entry equilibrium. Hence, “coordination failure” underinvestment in entry prevention can occur. However, as claimed, the overinvestment result of Gilbert and Vives remains robust to moderate amounts of product differentiation. We also show that coordination failure underinvestment arises in a wide variety of entry deterrence models and does not rely on assumptions regarding strategic substitutability or complementarity of precommitments.     

Farmers' Preference for Farming: Evidence From a Nationally Representative Farm Survey in India

Using data from a nationally representative farm survey in India, we have analyzed Indian farmers' stated preference for farming as a profession. Findings show that more than 40% of farmers dislike farming as a profession because of low profits, high risk, and lack of social status, yet they continue with it owing to a lack of opportunities outside agriculture. Farmers who express a preference for moving out of agriculture are mostly those with small landholdings, poor irrigation facilities, fewer productive assets including livestock, and follow a cereal‐centric cropping pattern. They also have relatively lower access to credit, insurance, and information, and are weakly integrated with social networks such as self‐help groups and farmers' organizations. Importantly, the disinclination for farming, conditional on other covariates, is not significantly differentiated by caste, an important indicator of social status in rural India. Yet, within a caste group, the dislike for farming moderates with larger landholdings.     

Are stricter investment rules contagious? Host country competition for foreign direct investment through international agreements

We argue that competitive diffusion is a driver of the trend toward international investment agreements with stricter investment rules, namely defensive moves of developing countries concerned about foreign direct investment (FDI) diversion in favor of competing host countries. Accounting for spatial dependence in the formation of bilateral investment treaties and preferential trade agreements that contain investment provisions, we find that the increase in agreements with stricter provisions on investor-to-state dispute settlement and pre-establishment national treatment is a contagious process. Specifically, a developing country is more likely to sign an agreement with weak investment provisions if other developing countries that compete for FDI from the same developed country have previously signed agreements with similarly weak provisions. Conversely, contagion in agreements with strong provisions exclusively derives from agreements with strong provisions that other FDI-competing developing countries have previously signed with a specific developed source country of FDI.     

The Africa Growth and Opportunity Act and its Rules of Origin: Generosity Undermined?

This paper describes the United States recently enacted Africa Growth and Opportunity Act (AGOA) and assesses its quantitative impact on African exports. The AGOA expands the scope of preferential access of Africa's exports to the United States in key areas such as clothing. However, its medium‐term benefits – estimated at about US$100‐$140 million, an 8−11 per cent addition to current non‐oil exports – would have been nearly five times greater (US$540 million) if no restrictive conditions had been imposed on the terms of market access. The most important of these conditions are the rules of origin with which African exporters of clothing must comply to benefit from duty‐free access.