Does it matter (for equilibrium determinacy) what price index the central bank targets?

What inflation rate should the central bank target? We address determinacy issues related to this question in a two-sector model in which prices can differ in equilibrium. We assume that the degree of nominal price stickiness can vary across the sectors and that labor is immobile. The contribution of this paper is to demonstrate that a modified Taylor Principle holds in this environment. If the central bank elects to target sector one, and if it responds with a coefficient greater than unity to price movements in this sector, then this policy rule will ensure determinacy across all sectors. The results of this paper have at least two implications. First, the equilibrium-determinacy criterion does not imply a preference to any particular measure of inflation. Second, since the Taylor Principle applies at the sectoral level, there is no need for a Taylor Principle at the aggregate level.     

Who Is My Peer? A Valuation‐Based Approach to the Selection of Comparable Firms

This study presents a general approach for selecting comparable firms in market-based research and equity valuation. Guided by valuation theory, we develop a "warranted multiple" for each firm, and identify peer firms as those having the closest warranted multiple. We test this approach by examining the efficacy of the selected comparable firms in predicting future (one- to three-year-ahead) enterprise-value-to-sales and price-to-book ratios. Our tests encompass the general universe of stocks as well as a sub-population of so-called "new economy" stocks. We conclude that comparable firms selected in this manner offer sharp improvements over comparable firms selected on the basis of other techniques.     

A decision model for selecting protected habitat areas within migratory flyways

A decision model is developed for identifying alternative configurations of new protected habitat areas to augment and enhance major global flyways of migratory birds. New habitat areas are selected to fill in the spatial gaps between existing protected stopovers such as wildlife refuges. The methodology is applied to the US portion of the Atlantic flyway in order to develop alternative networks of habitat stepping stones extending from Maine to Florida. The model is formulated as a zero-one program and solutions are derived using a greedy adding heuristic procedure. Two ecological-economic objectives drive the model: maximizing the geographic coverage of the protected stopovers, and maximizing average stopover quality, as represented by an index based on wetland prevalence and land cost. Thirty-five alternative solutions were generated, indicating the tradeoffs between the objectives. These results are expected to be useful to natural resource agencies and conservation organizations in the development of habitat conservation, preservation, and restoration policies and programs.     

EUROPEAN MARKET INTEGRATION AND THE SMALL NATION

Predictions of Portuguese export market performance consequent on European market integration tended to come up short. To explain why, the author presents and analyzes the technical literature. The author compares the forecasts with actual results and then develops a simple model to extrapolate and replicate the prE-1992 Portuguese experiences. This model builds on relatively rapid growth already under way. The author holds that relative export industry market share as a function of relative sales effort explained export performance. Further, the author argues that four country industry concentration ratios as a function of changes in revealed comparative advantage as well as "home market" institutions explain the competitive situations faced by Portuguese exports both before and after 1992. The concatenation of these four variables yields successive equilibria.     

Multiunit Auctions in Which Almost Every Bid Wins

We consider multiunit auctions in which there are enough units so that each bidder but one wins every unit on which he bids. We characterize the equilibrium bidding strategy for three different payment rules: the pay-your-bid auction, the uniform-price auction in which the price equals the lowest winning bid, and the uniform-price auction in which the price equals the highest losing bid. We also consider the Vickrey pricing rule. In the case we examine, the auctions are all efficient and thus are revenue equivalent. The equilibria illustrate several phenomona that cannot arise in single-unit auctions. Even though the auctions are expected-revenue equivalent, different bidders may end up paying very different amounts. Also, in contrast to single-unit auctions, changing the seller's reservation price affects revenues, even if it remains below the lowest possible value to bidders.     

Fortune 500 manufacturer web sites: Innovative marketing strategies or cyberbrochures?

Forecasts for business-to-business electronic commerce over the next few years are in the trillions. Manufacturers represent a significant portion of business-to-business activity and their web sites an integral component of business-to-business electronic commerce. Should they choose to, manufacturers can use their web sites not only to conduct electronic commerce but also to engage in a wide range of marketing communications. Marketing communication activities include advertising, sales promotion, public relations, and direct marketing. The results of our content analysis of 188 Fortune 500 manufacturer web sites indicated that few manufacturers use a broad range of marketing communications activities. Analysis of differences in the use of marketing communications on web sites suggests that some aspects of web site marketing communications differ based on manufacturer characteristics such as sales, R&D to sales ratio, and net income.     

How to give and receive: An exploratory study of charitable hybrids

Most charitable organizations can only rely on appeals to purely philanthropic motivations in attempting to solicit donor contributions. The decision processes exhibited by the targets of charitable solicitations are very different from those the same individuals use in making daily purchase decisions. Although both charitable giving and purchase contexts have been studied extensively, there are numerous organizations that require targeted customers to use a decision process that merges elements of both domains. Charitable hybrids, such as museums and universities, are such organizations, supplementing traditional revenue streams by soliciting charitable contributions, thus evoking a complex consumer decision process. For these firms, giving good service may yield an added benefit of maximizing charitable contributions received. Drawing on both the services and charitable giving literatures, a model of the consumer decision process is developed in this hybrid situation. In an exploratory test of the model, initial evidence is found that both classes of effects have significant influence on donors' intentions to give. However, in charitable giving contexts, organizational identification appears to fill a central role in influencing decision outcomes, which diminishes the role of satisfaction. The findings provide provocative evidence that further research in this setting is warranted. © 2002 Wiley Periodicals, Inc.