How much of commodity price behavior can a rational expectations storage model explain?

A rational expectations competitive storage model was applied to the U.S. corn market, to assess the aptness of this framework in explaining monthly price behavior in an actual commodity market. Relative to previous models, extensive realism was added to the model, in terms of how production activities and storage costs are specified. By modeling convenience yield, “backwardation” in prices between crop years did not depend on the unrealistic assumption of zero ending stocks. Our model generated cash prices that were distributed with positive skewness and kurtosis, and mean and variance that increased over the storage season, comparable to the persistence and the occasional spikes observed in commodity prices. Futures prices were generated as conditional expectations of cash prices at contract maturity, and the variances of futures prices exhibited realistic time–to‐maturity and seasonal patterns. Model realizations of cash and futures prices over many “years” were used to demonstrate the wide variety of price behaviors that could be observed in an efficient market with a similar market structure, implying that economic and policy implications drawn from short, historical samples of prices could be misleading.     

Trademark dilution and the practice of marketing

This article considers the marketing implications of the Federal Trademark Dilution Act (FTDA) of 1995. The FTDA, an amendment to the Lanham Act, will influence the manner in which marketing is practiced well into the twenty-first century. Although the FTDA is specifically concerned with protecting famous trademarks from being diluted—either by having their distinctiveness diminished or positive associations tarnished—by similar trademarks, its influence will not be limited to trademark or branding issues. Implications range from the allocation of advertising resources to the increased use of marketing research. Robert A. Peterson holds the John T. Stuart III Centennial Chair in Business Administration and the Charles E. Hurwitz Fellowship, both at The University of Texas at Austin. His Ph.D. is from the University of Minnesota. Dr. Peterson’s publications have appeared in such journals as theJournal of the Academy of Marketing Science, Journal of Marketing, Journal of Marketing Research, Journal of Consumer Research, andMarketing Science. His research interests range from Internet marketing to research methodology to marketing strategy. He presently serves on the boards of several for-profit and not-for-profit organizations as well as an advisory committee to the Bureau of the Census. Karen H. Smith is an assistant professor at Southwest Texas State University. Her Ph.D. is from The University of Texas at Austin. Dr. Smith’s research interests include consumer information processing, consumer knowledge structures (schemata), dilution of brand equity, and adolescent smoking. Her research has been published in theJournal of Consumer Research, Journal of Marketing Education, andAdvances in Consumer Research. Philip C. Zerrillo is executive MBA director at The University of Texas at Austin. His Ph.D. is from Northwestern University. Dr. Zerrillo’s research interests have focused on broad-based business innovation, strategic development of distribution channel arrangements, the value of brands in the distribution channel, managing brands as assets, and the legal aspects of branding and channel decisions. His most recent research on antitrust regulation appeared in theJournal of Corporation Law, a University of Iowa law review.     

Trading Hot-Air. The Influence of Permit Allocation Rules,Market Power and the US Withdrawal from the Kyoto Protocol

After the conferences in Bonn and Marrakech, it is likely that international emissions trading will be realized in the near future. Major influences on the permit market␣are the institutional detail, the participation structure and the treatment of hot-air. Different scenarios not only differ in their implications for the demand and supply of permits and thus the permit price, but also in their allocative effects. In this paper we discuss likely the institutional designs for permit allocation in the hot-air economies and the use of market power and quantify the resulting effects by using the computable general equilibrium model DART. It turns out that the amount of hot-air supplied will be small if hot-air economies cooperate in their decisions. Under welfare maximization, more hot-airis supplied than in the case where governments try to maximize revenues from permit sales.     

Information seeking on competitors and perception of competition by food store managers

The dynamics of competition from the store manager's point of view has been neglected. This study was designed to investigate the perception of competition and competitive information seeking by food store managers. Competition was analyzed in relation to a set of independent variables suggested by concepts of retail competition and organization theory. The data was based on a questionnaire administered to 55 food store managers. It was predicted and found that the perceived competitive interdependency between two stores was related to the degree of perceived similarity between the stores. The results support the concept of competition for differential advantage. The frequency of information seeking on competitors was related to organizational variables, particularly the store managers concept of his job, but not the degree of perceived similarity between competing stores.     

Setting the stage for creative new products: Investigating the idea fruition process

This article attempts to understand the idea fruition process, or the fuzzy front-end set of activities that an organization may informally engage in before it adopts a formal process for developing a new product. The authors propose that the idea fruition process consists of three sub-processes: idea creation, idea concretization, and idea commitment. They also propose and test the individual and organizational factors that influence the idea’s degrees of creativity, concretization, and commitment to further the understanding of the phenomenon and, thus, boost the creation and harnessing of worthwhile ideas in organizations. Astra Zeneca Janice Griffiths-Hemans (jaiuce.griffith-hermans@astrazeneca.com) holds a Ph.D. in business administration (marketing strategy and new product development) and a master’s in market research from the University of Georgia, an MBA in marketing from the University of Miami, and a bachelor of science degree in pure and applied chemistry from the University of the West Indies, Jamaica. Janice is currently a Senior Manager of Consumer Insights with Astra Zeneca, Wilmington, Delaware. Rajiv Grover (rgrover@terry.uga.edu) is the head of the department and holder of the Terry Chair of Marketing at the Terry College of Business, the University of Georgia in Athens, Georgia. He has received several honors for his research and teaching efforts—the O’Dell award for the Best Paper in theJournal of Marketing Research and the Hugh O. Nourse Outstanding MBA Teacher Award. He has authored the bookTheory and Simulation of Market-Focused Management, published by Dry den Press. He is currently editingThe Handbook of Marketing Research: Do’s and Don’ts, which will be published by Sage Publications. He received his Ph.D. from the University of Massachusetts at Amherst in 1983.     

Intended use of proceeds and the long-run performance of seasoned equity issuers

We investigate the relation between seasoned equity issuers' stated intended use of proceeds and their subsequent long-run stock and operating performance. Stated intended uses of proceeds are: investment, recapitalization, and general corporate purposes. We find that issuers stating recapitalization or general corporate purposes experience abnormally poor performance in the subsequent three years, but issuers stating investment display little or no subsequent underperformance. These results suggest that issuers with specific plans to use the proceeds for investment purposes are credibly signaling profitable investment opportunities, whereas issuers without specific investment plans are more likely to be opportunistic market timers. Consistent with a timing motive, the secondary component of the offering is significantly larger when the issuer is not specific about investment plans.     

What Works in Fighting Diarrheal Diseases in Developing Countries? A Critical Review

The Millennium Development Goals call for reducing by half theproportion of people without sustainable access to safe drinkingwater. This goal was adopted in large part because clean waterwas seen as critical to fighting diarrheal disease, which kills2 million children annually. There is compelling evidence thatprovision of piped water and sanitation can substantially reducechild mortality. However, in dispersed rural settlements, providingcomplete piped water and sanitation infrastructure to householdsis expensive. Many poor countries have therefore focused insteadon providing community-level water infrastructure, such as wells.Various traditional child health interventions have been shownto be effective in fighting diarrhea. Among environmental interventions,handwashing and point-of-use water treatment both reduce diarrhea,although more needs to be learned about ways to encourage householdsto take up these behavior changes. In contrast, there is littleevidence that providing community-level rural water infrastructuresubstantially reduces diarrheal disease or that this infrastructurecan be effectively maintained. Investments in communal waterinfrastructure short of piped water may serve other needs, andmay reduce diarrhea in particular circumstances, but the casefor prioritizing communal infrastructure provision needs tobe made rather than assumed. JEL codes: Q56, Q52, O22     

Differences in internal control weaknesses among varying municipal election policies

In a time when regulators and constituents are growing increasingly concerned with municipal fraud, abuse, waste and inefficiencies, developing a well-designed, effective internal control system is key for municipalities to curb these issues. In this study, the relationship between municipal elections and internal control weaknesses is examined. As elections have been shown to improve public officials’ performance via accountability, appropriate use of elections is expected to have a pivotal effect on a municipality, ultimately impacting the operating effectiveness of the internal control system. Two election variables – election of the Finance official and use of term limits for City Council and the mayor – are evaluated to determine if a relationship with the prevalence of internal control weaknesses reported exists. The contribution of this study is the finding that both the use of term limits and election of the Finance official are associated with fewer instances of internal control weaknesses, implying that these election policies have a meaningful effect on governance quality, impacting the effectiveness of internal controls.     

The CAB'S Struggle to Establish Price and Route Rivalry in World Air Transport

A bstract . Almost from the beginning of international air transport , this industry, while regulated by the U.S. Government, has enjoyed exemption from prosecution under the antitrust laws. In 1946 leading airlines of Western Europe, Canada and the United States organized the International Air Transportation Association , which the Civil Aeronautics Board later charged was a cartel regulating prices, schedules and routes in the interest of the profits of the carriers. In 1978 the board began trying to establish price and route competition in the industry's foreign operations, as well as in the domestic services. The board's efforts to deregulate the industry to make it responsive to market forces continued through the Ford, Carter and Reagan presidencies and the evidence so far available suggests that they have achieved a substantial degree of success.