A Closer Look at Barrier Exchange Options

A barrier exchange option is an exchange option that is knocked out the first time the prices of two underlying assets become equal. Lindset, S., & Persson, S.‐A. (2006) present a simple dynamic replication argument to show that, in the absence of arbitrage, the current value of the barrier exchange option is equal to the difference in the current prices of the underlying assets and that this pricing formula applies irrespective of whether the option is European or American. In this study, we take a closer look at barrier exchange options and show, despite the simplicity of the pricing formula presented by Lindset, S., & Persson, S.‐A. (2006), that the barrier exchange option in fact involves a surprising array of key concepts associated with the pricing of derivative securities including: put–call parity, barrier in–out parity, static vs. dynamic replication, martingale pricing, continuous vs. discontinuous price processes, and numeraires. We provide valuable intuition behind the pricing formula which explains its apparent simplicity. © 2011 Wiley Periodicals, Inc. Jrl Fut Mark 33:29–43, 2013     

An operationalization of Stevenson's conceptualization of entrepreneurship as opportunity‐based firm behavior

Stevenson (1983) holds that entrepreneurial management, defined as a set of opportunity‐based management practices, can help firms remain vital and contribute to firm and societal level value creation. While his conceptualization has received much attention, little progress has been made because of a lack of empirical tools to examine his propositions. This article seeks to resolve this by describing a new instrument that was developed specifically for operationalizing Stevenson's conceptualization. After two pre‐tests, the instrument was tested full scale on a very large (1200+ cases) stratified random sample of firms with different size, governance structure, and industry affiliation. The results show that both in the full sample and in various sub‐samples it was possible to identify six sub‐dimensions with high discriminant validity and moderate to high reliability, which represent dimensions of Stevenson's theoretical reasoning. We label these Strategic Orientation, Resource Orientation, Management Structure, Reward Philosophy, Growth Orientation and Entrepreneurial Culture. We were further able to show that these dimensions only partly overlap with ‘Entrepreneurial Orientation’, the hitherto best established empirical instrument for assessing a firm's degree of entrepreneurship. Our instrument should open up opportunities for researchers to further evaluate entrepreneurship in existing firms. Copyright © 2001 John Wiley & Sons, Ltd.     

The Limits of Statutory Trade Union Recognition

The paper assesses the prospects for Britain's new statutory trade union recognition procedure in the light of empirical evidence concerning union derecognition practice in the 1990s. It draws on 15 cases of union derecognition across a broad spread of employment, matched with comparable cases where recognition was retained. Inter alia it was found that a move towards more cooperative workplace arrangements, associated with a ‘partnership’ model of industrial relations, was common to employers in both categories. Against this background, we argue that it is far from clear that the current legislative strategy, in focusing on statutory recognition, is the best way of promoting partnership at work.     

Uniqueness of equilibrium for smooth multistage concave games

Smooth, noncooperative, multistage, concave games are formulated so that a new uniqueness condition—based on the Poincaré-Hopf theorem—can be applied. The new condition is the weakest to appear in the uniqueness literature. The uniqueness subgame perfect equilibrium is obtained and examples are given.     

An Experiment Testing the Determinants of Non-Compliance with Insider Trading Laws

Recent stories of corporate insiders avoiding losses and, in some cases, generating enormous personal profits as their companies crumbled have led investors to question the integrity of American business and the fairness of the United States stock markets. The SEC tries to ensure the fairness of the stock markets by making and enforcing laws against unfair practices such as insider trading. In the United States, when insiders trade stock based on non-public information, they have broken the law and betrayed the trust that has been placed in them.This study used student subjects to test the relationship between the likelihood of trading based on insider information and subjective probabilities of deterrents and motivations for insider trading. Expected gain, guilt, cynicism, and fairness of laws were the determinants that had a significant relationship with the intent to trade based on insider information. This study also found support for prospect theory with regard to insider trading. The results indicate that subjects are more likely to trade based on insider information to avoid a loss than to achieve an abnormal gain. The study also finds evidence of social desirability response bias.Additional findings of the study were that subjects did not view the determinants for themselves in a manner consistent with how they viewed those same deterrents and motivations for other people. Also, a test of the effects of gender found that certainty and social stigma were significantly higher for female respondents than for male respondents.