When is market incompleteness irrelevant for the price of aggregate risk (and when is it not)?

In a standard incomplete markets model with a continuum of households that have constant relative risk aversion (CRRA) preferences, the absence of insurance markets for idiosyncratic labor income risk has no effect on the premium for aggregate risk if the distribution of idiosyncratic risk is independent of aggregate shocks and aggregate consumption growth is independent over time. In equilibrium, households only use the stock market to smooth consumption; the bond market is inoperative. Furthermore, the cross-sectional distributions of wealth and consumption are not affected by aggregate shocks. These results hold regardless of the persistence of idiosyncratic shocks, even when households face tight solvency constraints. A weaker irrelevance result survives when we allow for predictability in aggregate consumption growth.     

Ein neues Modell zur Grundsteuerreform: die ewige Wiederkehr des Gleichen

In June 2016, the ministers of finance of the German states presented a draft law for a property tax reform, which resembles some reform proposals of the past. Based on an illustrative calculation, conclusions are drawn in regard to its constitutionality, as well as effects on settlement activities, construction activities, the land market and distribution, that could be caused by this reform attempt. It turns out that — compared with the counterproposal of a land value tax — the new concept appears to be inferior.     

Customer Touchpoint Management

Literaturhinweise

Customer Touchpoint Management Literaturhinweise zusammengestellt von Dipl.-Kfm. Jochen Binder     

Corporate Focus and Stock Performance International Evidence from Listed Property Markets

Does corporate focus translate into superior stock performance? We use 17 years of international data on 275 property companies from the U.S., British, French, Dutch and Swedish listed property share markets to answer this question. After analyzing corporate structures, we document significant differences in corporate focus strategies both between nations and firms and over time. By linking these focus profiles to risk-adjusted performance measures, we show that companies with high levels of geographical focus perform significantly better than the overall market. With regard to industrial focus, our results are mixed but again imply a positive relationship between corporate focus and stock outperformance. At the same time, our results show that the firm-specific risk of a company increases with higher levels of corporate focus. Hence, our results imply that within the real estate sector a focused strategy mildly increases both a firm’s return and risk.     

Entry and Vertical Differentiation

This paper analyzes the entry of new products into vertically differentiated markets where an entrant and an incumbent compete in quantities. The value of the new product is initially uncertain and new information is generated through purchases in the market. We derive the (unique) Markov perfect equilibrium of the infinite horizon game under the strong long run average payoff criterion. The qualitative features of the optimal entry strategy are shown to depend exclusively on the relative ranking of established and new products based on current beliefs. Superior products are launched relatively slowly and at high initial prices whereas substitutes for existing products are launched aggressively at low initial prices. The robustness of these results with respect to different model specifications is discussed. Journal of Economic Literature Classification Numbers: C72, C73, D43, D83.     

Work–Life Imbalance in Call Centres and Software Development

The paper evaluates the centrality of work to employees in two growing employment sectors, call‐centres and software development. It then examines evidence for extensions of work into household and family life in these two sectors. Extensions are identified as tangible, such as unpaid overtime, or intangible, represented by incursions imported from work, such as exhaustion and stress. The study finds that organizational pressures, combined with lack of work centrality, result in work intruding into non‐work areas of employee lives, though intrusions manifest themselves in different ways according to type of work, levels of worker autonomy and organizational support.     

Planning the summer vacation : An Adaptable Process

This paper presents a contextualized study of vacation planning starting from a naturalistic perspective. Series of indepth interviews have been conducted during the period of a year on 25 Belgian households in order to follow their decision-making process for summer vacation. Data were analyzed and interpreted following the grounded theory approach. Findings show that vacation planning is an ongoing process, which entails a lot of adaptability and opportunism. Fantasy and emotions also play an important role in shaping vacation and destination choices. This departs from existing decision-making models that propose a (bounded) rational, problem-solving vacationer.