Immediate Disclosure or Secrecy? The Release of Information in Experimental Asset Markets

This paper reports the results of experimental asset markets designed to investigate how the public disclosure of uncertain information affects market and individual outcomes. In some markets, no information is released as trading starts, and in others, an imperfect pre‐announcement is disclosed. The reliability of the pre‐announcement varies across markets. Our data indicate under‐reaction to a pre‐announcement that is highly reliable and over‐reaction to one with much lower reliability. Price volatility is higher and allocational efficiency is lower with a pre‐announcement that reflects substantial uncertainty. Furthermore, when the reliability of the pre‐announcement is low, traders extract a smaller proportion of the total attainable profit. Thus, in a highly uncertain environment better outcomes may result when information is withheld. These results have important policy implications regarding the disclosure of information by the Federal Reserve. In a highly uncertain environment, better outcomes may actually result with less information.     

Key account management in financial services: An outline research agenda

The forces of deregulation and technological development have created a highly competitive environment in financial services. Despite the quest for business-to-business service efficiency, most financial services companies know that they must not lose sight of the importance of relationship quality. As a result, there is growing interest in key account management (KAM) in these companies. Research on KAM in general is limited and little has been undertaken in financial services. There are several reasons why KAM practice in financial services may be distinctive: the regulatory environment; the sector's size and diversity; the high degree of intermediation; product diversity and complexity; uncertainty of product performance; the problem of measuring profitability; the challenges of interactive marketing using both traditional face-to-face and complementary direct marketing techniques; and the role of technology in delivery. A research agenda for KAM in financial services is proposed. It is argued that more knowledge in this area would be of benefit to customer relationship management (CRM) research and to practising managers implementing KAM.     

The economic advantage of learners in a spot/futures market

This article examines the economic advantage of learners in a futures market. We develop a dynamic model of learning in which a spot market and futures market both exist for a real good. The economy is composed of producers who can engage in hedging activities, speculators who trade in the futures market, and consumers who are described by an inverse demand function for the underlying commodity. Producers and speculators are heterogeneous and are differentiated based upon the predictive equations they employ when formulating forecasts of next period's spot price. We derive the dynamic rational‐expectations equilibrium of the model and show that learners enjoy an economic advantage in the futures market. © 2003 Wiley Periodicals, Inc. Jrl Fut Mark 23:151–167, 2003     

The Countryside in the City - Situating a Farmers' Market in Birmingham

The City of Birmingham capitalized on the burgeoning trend in Farmer's Markets by establishing one in the city core. This paper first outlines the growth and origins of Farmer's Markets before offering empirical research on this particular market. The critical questions concern the advisability of putting such a market in a major city and issues surrounding the use made of the market by patrons. Stallholders and others are also interviewed to establish the balance of benefits and costs. The conclusions are that the effects have generally been positive and the initiative a worthwhile one.     

Direct Foreign Investment and Welfare in the Transforming Economies: The Case of Central Asia

This paper studies the welfare effects of foreign investment into an economy with a trade regime of export taxes and/or import subsidies. This regime is characteristic of the Central Asian economies but has received no consideration in previous literature. We show that in many circumstances, foreign investment into an economy with a Central-Asian-type trade regime reduces welfare. In particular, we find that foreign investment is most likely to immiserize when it is directed toward nondistorted traded sectors or free trade zones.J. Comp. Econom.,June 1997,24(3), pp. 297–312. University of Miami, P.O. Box 248126, Coral Gables, Florida 33124.     

The long-run performance of initial public offerings and its determinants: the case of China

Existing research finds poor long-run performance of Initial Public Offerings (IPOs), particularly in the US. Using company IPO data from China’s Shanghai Stock Exchange, we find comparable levels of underperformance. In line with US results, initial overoptimism and the size of the offer are important explanatory factors for this underperformance. Additional variables include the earnings per share prior to listing, the decision to switch investment banks at the time of issue and whether the firm issues shares that can be purchased by foreign investors. These factors suggest that firms in China are able to manipulate the issue process. In the context of Chinese economic reforms, of particular note is the positive performance impact of the government shareholding after issue, which supports a signal argument in relation to continuing government support. As a result, we provide an interesting insight into the influence of the regulatory environment and economic transition on the long-run performance of IPOs in China.

The Psychology of Billing

Contracting between tax entities and tax professionals occurs millions of times every year, yet little is known about the nature of these economic interactions. This study examines the effect of commonly occurring contextual factors on tax professionals’ billing decisions for tax research. These contextual factors are unrelated to the tax research itself and the time it takes to conduct the tax research, but we find that billing decisions are strongly influenced by the three non‐time‐related contextual factors that we manipulate. Initial client volume impacts amounts billed for tax research, with lower initial client volume resulting in higher per client fees. Further, we find that initial billing decisions serve as value billing benchmarks for unanticipated subsequent clients who benefit from research conducted for initial clients. As a result, subsequent clients are billed higher fees when they follow a smaller number of initial clients. We also find that client referrals are billed higher fees than nonclient referrals because professionals attempt to avoid making initial clients feel as though they have been treated unfairly relative to subsequent clients who would otherwise be billed lower fees. The results of this study are relevant beyond the traditional confines of accounting research—they are relevant to the millions of tax entities that contract with tax professionals each year.