An ethical analysis of deception in advertising

This paper examines several issues regarding deception in advertising. Some generally accepted definitions are considered and found to be inadequate. An alternative definition is proposed for legal/regulatory purposes and is related to a suggested definition of the term deception as it is used in everyday language. Based upon these definitions, suggestions are offered for detecting and regulating deception in advertising. This paper additionally considers the grounds for the generally held but largely unquestioned assumption that deceptive advertising is unethical. It is argued that deceptive advertising can be shown to be morally objectionable, on the weak assumption that it is prima facie wrong to harm others. Finally, the implications of this analysis with respect to current regulation of deceptive advertising by the FTC are considered. Thomas L. Carson is Assistant Professor of Philosophy at the Virginia Polytechnic Institute and State University. He was previously Lecturer at the University of California at Los Angeles and was holder of an NEH Fellowship for College Teachers. His most important publication is The Status of Morality, Reidel, Dordrecht, 1984. Forthcoming (in Philosophy and Public Affairs) is: Bribery, Extortion, and The Foreign Corrupt Practices Act.Richard E. Wokutch is Associate Professor of Management at the Virginia Polytechnic Institute and State University where he teaches in the social issues and policy areas. He previously held positions as Visiting Assistant Research Professor at the Values Center, University of Delaware, and as Visiting Fulbright Research Fellow, Science Center, Berlin, West Germany. He has published several recent articles in the areas of bluffing and deception in business and ethical/social investing. James E. Cox, Jr., is Assistant Professor of Management and Marketing at Illinois State University. Formerly, he was at the Virginia Polytechnic Institute and State University (from September 1979 until August 1983). He was a fellow at the 1979 American Marketing Association Ph. D. Consortium and his research has been published in the Journal of Forecasting, the Journal of Marketing Education, the Proceedings of the American Marketing Association, and the Proceedings of the National Council of Physical Distribution Management. He is also co-author of the book Sales Forecasting Methods: A Survey of Recent Developments.     

Gender,social salience,and social performance: how women pursue and perform in social ventures

Abstract

We investigate how women that start organizations contribute to the creation of social value in communities and society. We draw on theory from gender self-schemas and social identity theory to explain how women with a female gender-self schema have a natural inclination to create organizations with social goals and intentions in mind. We label these social goals and intentions as social salience and draw on goal theory and existing understandings on intentions to explain how the presence of a social salience in an organization is related to the social performance of their organization. Utilizing structural equation modeling, we show that gender positively influences social salience that subsequently has a positive relationship with the social performance of the organization. We also show that social salience fully mediates the relationship between gender and social performance implying that gender alone is not enough to explain the social performance of an organization. We conclude by highlighting the implications, contributions, and future research that result from our findings.     

Robust pricing and hedging under trading restrictions and the emergence of local martingale models

We pursue the robust approach to pricing and hedging in which no probability measure is fixed, but call or put options with different maturities and strikes can be traded initially at their market prices. We allow the inclusion of robust modelling assumptions by specifying a set of feasible paths on which (super)hedging arguments are required to work. In a discrete-time setup with no short selling, we characterise absence of arbitrage and show that if call options are traded, then the usual pricing–hedging duality is preserved. In contrast, if only put options are traded, a duality gap may appear. Embedding the results into a continuous-time framework, we show that the duality gap may be interpreted as a financial bubble and link it to strict local martingales. This provides an intrinsic justification of strict local martingales as models for financial bubbles arising from a combination of trading restrictions and current market prices.     

Mortgage Insurance Adoption in the Netherlands

Individuals tend to underinsure on low probability, high consequence risks. Using a survey data set from a unique institutional context, we provide an assessment of the underinsurance puzzle by studying mortgage insurance adoption among Dutch homeowners. The results indicate that the demand for mortgage insurance is affected by risk exposure, type of mortgage lender, and the involvement of financial advisors. We document that wealthier and younger mortgagors are more likely to insure. However, locus of control, house price expectations, and precautionary savings are not related to insurance demand. Finally, we find evidence that borrower (over)confidence negatively affects the likelihood that insurance is bought.     

Transportation security and the role of resilience: A foundation for operational metrics

This paper presents operational metrics to determine a passenger transportation system's resilience to terrorism. The metrics range from those specific to the number of trips to more holistic measures that include the contribution of these trips directly and indirectly to economic activity. These metrics can aid decision-makers in rendering more informed judgments about resource allocation and how to design a portfolio of security and recovery strategies.The paper also provides a framework for evaluating transportation risk, including the important role of perceptions in potentially amplifying these risks. It provides a range of strategies to promote resilience as well. Resilience of a transportation system is then quantified using the real-world case of the 2005 London subway and bus bombings. In terms of ordinary resilience, we find that 77.4 percent of total journey reductions on attacked modes were offset by increases in substitute modes for the 4 months following the attacks. We also estimate that 76.9 percent of total journey reductions on attacked modes were the result of a “fear factor,” as opposed to capacity reductions.The paper concludes with a set of proposed prospective resilience measures to evaluate the potential resilience of a transportation system. These metrics are based on the vulnerability, flexibility, and resource availability to cope with a terrorist attack or natural disaster.     

Spatial allocation and the shadow pricing of product characteristics

The paper considers an industry transforming primary commodities (farm products) into processed commodities (food products). It focuses on the allocation of embedded characteristics (carbohydrate, protein, etc.) both across space and among commodities. The approach generates a spatial competitive market equilibrium of production, consumption, transformation, and trade for both primary and processed commodities, along with the spatial distribution of shadow prices for the product characteristics. The model provides a basis for analyzing the allocation and pricing of agricultural products, food products, and characteristics in spatial markets. The empirical usefulness of the model is illustrated in the context of regional resource allocation in the U.S. dairy sector.