Option Bounds and the Pricing of the Volatility Smile

This paper presents a new approach forthe estimation of the risk-neutral probability distribution impliedby observed option prices in the presence of a non-horizontalvolatility smile. This approach is based on theoretical considerationsderived from option pricing in incomplete markets. Instead ofa single distribution, a pair of risk-neutral distributions areestimated, that bracket the option prices defined by the volatilitybid/ask midpoint. These distributions define upper and lowerbounds on option prices that are consistent with the observableoption parameters and are the tightest ones possible, in thesense of minimizing the distance between the option upper andlower bounds. The application of the new approach to a sampleof observations on the S&P 500 option market showsthat the bounds produces are quite tight, and also that theirderivation is robust to the presence of violations of arbitragerelations in option quotes, which cause many other methods tofail.     

The impact of a World Wide Web site visit on brand image in the motor vehicle and mobile telephone industries

During recent years the number of World Wide Web (WWW) sites and visitors has increased very rapidly. WWW site evaluation has focused more on click‐through rates than on brand effects. Nevertheless, there are few studies on the effects of WWW site exposure on brand image. The aim of this research was to illustrate brand association changes after a WWW site visit. More precisely, the paper describes the effect of a forced visit on the global brand image of two bricks‐and‐mortar companies. The results indicate that some positive brand associations increase significantly after the visit and that attitude towards the WWW site has an impact on attitude towards the brand.     

A Framework for Ethical Conformity in Marketing

The extant marketing literature provides little guidance for theory development or practice with regard to questions of ethical conformity and the resulting market response. To begin to bridge this research gap, we advance a theoretical framework of ethical conformity in marketing, appealing to marketing ethics, management strategy, and sociological foundations. We set the stage for our theoretical arguments by considering the role of normative expectations related to marketing practices and behaviors held by societal constituents. Against this backdrop, we propose drivers of conformity in marketing, including practices consistent with both overconformity and underconformity. The framework allows us to advance testable research propositions by which questions of ethical conformity may be explored. We conclude by suggesting additional future research needed to develop the domain, specifically in the form of empirical inquiries uncovering firm strategic decisions with ethical implications. Kelly D. Martin is Assistant Professor of Marketing at Colorado State University in Fort Collins, Colorado. Her research interests involve marketing strategy with ethical implications, interfirm relationships, the role of marketing in society, and the effects of institutions, social norms, and culture on organizations. Her work has appeared in the Academy of Management Journal, the Journal of Business Ethics, and Business & Society. Jean L. Johnson is the Gardner O. Hart Professor of Marketing at Washington State University in Pullman, Washington. Her research focuses on marketing strategy, interfirm relationships, and capabilities and learning in firms. Her work appears in the Journal of Marketing, the Academy of Management Journal, and Journal of International Business Studies, among others.     

Free Riding on Altruism and Group Size

It is shown that altruism does not affect the equilibrium provision of public goods although altruism takes the form of unconditional commitment to contribute. The reason is that altruistic contributions completely crowd out selfish voluntary contributions. That is, egoists free ride on altruism. It is also shown that public goods are less likely to be provided in larger groups. The only qualification to our results is when the probability of altruism is so high that it is a dominant strategy for all egoistic players to free ride. In this case, actually, both altruism and the larger group facilitate public good provision.