The Meaning(s) of Trust. A Content Analysis on the Diverse Conceptualizations of Trust in Scholarly Research on Business Relationships

Scholarly research largely converges on the argument that trust is of paramount importance to drive economic agents toward mutually satisfactory, fair, and ethically compliant behaviors. There is, however, little agreement on the meaning of trust, whose conceptualizations differ with respect to actors, relationships, behaviors, and contexts. At present, we know much better what trust does than what trust is. In this article, we present an extensive review and analysis of the most prominent articles on trust in market relationships. Using computer-aided content analysis and network analysis methods, we identify key, recurring dimensions that guided the conceptualization of trust in past research, and show how trust can be developed as a multifaceted and layered construct. Our results are an important contribution to a convergence of research toward a shared and common view of the meaning of trust. This process is important to ensure the body of trust research’s internal theoretical consistency, and to provide reliable and common principles for the management of business relationships – a context in which opportunism and imperfect information may induce economic actors to cheat and stray from fair and ethically compliant behaviors.     

Lab and framed lab versus natural experiments: Evidence from a risky choice experiment

Some recent papers have studied data from TV game shows to examine the behaviour of individuals towards risk. It is generally agreed that data from these shows are useful in detecting individual risk aversion in the field, with both “real life” subjects and incentives. Field experiments also include some interesting reality features that could affect individuals’ behaviour and possibly lead to different findings. This paper aims at investigating lab versus field evidence in risk taking attitudes, especially controlling for framing effects. To assess whether the behaviour of subjects in the field is consistent with that of experimental subjects, we designed an experiment to mimic (with experimental rewards and subjects) the rules of a well-known Italian TV game show, Affari Tuoi, in two different settings: a traditional lab setting, where the game was played individually (109 subjects) (Treatment 1); and a framed lab, in which the experiment was replicated in the Italian public television (RAI) studio where the show was actually recorded, with a smaller sample of undergraduate students (33) and in the presence of an audience (Treatment 2). Our comparison between the two different settings aims at establishing whether the presence of an audience, or of a situation that reproduces the stress that contestants must experience in the TV studio, can affect experimental subjects’ choices. We did not find any significant evidence of framing effects: students behave in a similar way in the two lab settings, responding essentially to incentives. Comparing the risk attitudes shown by experimental subjects in the two lab treatments with those exhibited by the contestants in the field, we found that contestants in the TV show are generally more risk averse than students in the lab.     

The Inflationary Consequences of a Currency Changeover on the Catering Sector: Evidence from the Michelin Red Guide*

This paper examines the inflationary consequences of a currency changeover in the catering market. Empirical evidence from the Michelin Red Guide shows that: (i) differently from restaurants in non‐euro countries, restaurants in the euro area experienced abnormal price increases just after the changeover; and (ii) among restaurants in the euro area, tourist restaurants are responsible for most of the abnormal price increases. These results suggest that proposed explanations for the changeover effect, such as menu adjustment and rounding up, are only part of the story. We present a simple model of the catering market that is consistent with the evidence.     

Quantitative aspects of economic and financial reform in the GDR

Quantitative aspects of economic and financial reform in the GDR     

Using users: When does external knowledge enhance corporate product innovation?

Prior research on corporate innovation highlights the importance of accessing external knowledge from other firms and universities. However, survey evidence indicates that product users are perhaps the most important source of external knowledge. We build on existing theory to identify the conditions under which user knowledge contributes to corporate innovation and when the benefits will be greatest. Using a panel dataset of medical device companies and their collaborative efforts with innovative physicians, we find evidence that inventive collaborations with users enhance corporate product innovation and that the benefits are greatest in new technology areas and in the generation of radical innovations. Copyright © 2013 John Wiley & Sons, Ltd.     

Beta-product dependent Pitman–Yor processes for Bayesian inference

Multiple time series data may exhibit clustering over time and the clustering effect may change across different series. This paper is motivated by the Bayesian non-parametric modelling of the dependence between clustering effects in multiple time series analysis. We follow a Dirichlet process mixture approach and define a new class of multivariate dependent Pitman–Yor processes (DPY). The proposed DPY are represented in terms of vectors of stick-breaking processes which determine dependent clustering structures in the time series. We follow a hierarchical specification of the DPY base measure to account for various degrees of information pooling across the series. We discuss some theoretical properties of the DPY and use them to define Bayesian non-parametric repeated measurement and vector autoregressive models. We provide efficient Monte Carlo Markov Chain algorithms for posterior computation of the proposed models and illustrate the effectiveness of the method with a simulation study and an application to the United States and the European Union business cycle.     

SEMIPARAMETRIC VECTOR MEM

Financial time series are often non‐negative‐valued (volumes, trades, durations, realized volatility, daily range) and exhibit clustering. When joint dynamics is of interest, the vector multiplicative error model (vMEM; the element‐by‐element product of a vector of conditionally autoregressive scale factors and a multivariate i.i.d. innovation process) is a suitable strategy. Its parameters can be estimated by generalized method of moments, bypassing the problem of specifying a multivariate distribution for the errors. Simulated results show the gains in efficiency relative to an equation‐by‐equation approach. A vMEM on several measures of volatility justifies a joint approach revealing full interdependence. Copyright © 2012 John Wiley & Sons, Ltd.     

The Curse of Being Landlocked: Institutions Rather than Trade

This article revisits the long‐term economic effects of being landlocked. The conventional wisdom, which also prevails in policy circles, is that landlockedness hurts development by reducing trade. Gravity models of bilateral trade seem to confirm this view. However, there is no evidence in cross‐country data of a systematic relationship between landlockedness and country's trade to GDP ratio. Drawing on this stylised fact, the paper explores the possibility that landlockedness might affect GDP independently from its effect on trade. Theoretical considerations suggest that institutional quality could be a relevant transmission mechanism. The estimation of a system of three equations confirms that landlockedness has a negative effect on GDP and that this negative effect is transmitted through institutions rather than trade. Moreover, after controlling for the transmission via institutions and trade, landlockedness has a further negative effect on GDP. These findings call for a review of the policy approach to the development of landlocked countries.