On the empirical distribution of the Balassa index

On the Empirical Distribution of the Balassa Index. — The concept of revealed comparative advantage as measured by the Balassa index is widely used in practice to determine a country’s weak and strong sectors. Interpreting the Balassa index is difficult, however, in view of the limited knowledge to date on the distribution of this index. We analyze theempirical distribution of the Balassa index and its stability and properties over time, using Japan-European Union trade data. It appears that the distribution is relatively stable over time and that the widely used rule that “a Balassa index above one” identifies a strong sector, selects about one-third of all industries. On the other hand, the distribution appears to differ markedly across countries.     

Earthquakes and Economic Outcomes: Does Central Bank Independence Matter?

Open Economies Review - This study explores whether the degree of central bank independence influences the economic performance in the period immediately following an earthquake. Earthquakes create...     

Can People Value Protection against Invasive Marine Species? Evidence from a Joint TC–CV Survey in the Netherlands

Harmful algal-bloom species (HABs) are invasiveexotic species that are primarily introduced inNorth European waters through ballast water ofships. Some produce important damages to themarine ecosystem such as the red tides thatcause a massive destruction of marine livingresources, including fish and bottom-livinganimals. Others are responsible for theproduction of thick foams with repellent odorsand the coloration of the beach water, causingimportant damages on beach recreation. Thisarticle reports a monetary valuation study of amarine protection program. This program focuseson the prevention of HABS along the coastlineof the Netherlands. It entails the constructionof a ballast water disposal treatment in theRotterdam harbor and the implementationof a monitoring program of the water quality inthe open sea along the North-Holland beaches.The valuation study is based on a questionnaireundertaken at Zandvoort, a famous Dutchbeach resort. The economic value of the marineprotection program includes non-market benefitsassociated with beach recreation, human healthand marine ecosystem impacts. Both contingent-valuation and travel-cost methods are used.These valuation techniques have not yet beenapplied to value HABs damages. The valuationresults indicate that the protection programmakes sense from an economic perspective aslong as its cost is, in any case, less than 225 millioneuro, and possibly less than 326 million euro, depending on how survey refusals are dealt with.     

Wanted: a Bigger Stick. On Unfair Terms in Consumer Contracts with Online Service Providers

The Unfair Contract Terms Directive offers consumers protection from pre-formulated imbalanced contract terms. While the standard terms and conditions of online service providers have previously been accused of harming clients of such online services, a comprehensive analysis of the potential unfair character of such terms and conditions in line with the interpretation of the Directive supplied by the CJEU has not yet been provided. This paper aims to fill in this gap in the academic literature. It identifies several types of contractual terms used by international online service providers in their consumer contracts, which are unlikely to pass the Directive’s unfairness test.     

Business Models

The business model concept, although a relatively new topic for research, has garnered growing attention over the past decade. Whilst it has been robustly defined, the concept has so far attracted very little substantive research. In the context of the wide-spread digitization of businesses and society at large, the logic inherent in a business model has become critical for business success and, hence, a focus for academic inquiry. The business model concept is identified as the missing link between business strategy, processes, and Information Technology (IT). The authors argue that the BISE community offers distinct and unique competencies (e.g., translating business strategies into IT systems, managing business and IT processes, etc.) that can be harnessed for significant research contributions to this field. Within this research gap three distinct streams are delineated, namely, business models in IT industries, IT enabled or digital business models, and IT support for developing and managing business models. For these streams, the current state of the art, suggest critical research questions, and suitable research methodologies are outlined.     

Terminating Piracy or Legitimate Seed Saving? The Use of Copy-Protection Technology in Seeds

This article analyses the strategies of the agro-biotechnology industry to control and exploit plant-genetic knowledge, and the dilemmas that these strategies involve. The replicability of plants limits markets for commercial seeds, as it enables farmers to reproduce seeds themselves. The industry has therefore invented genetic-engineering techniques that will block the replicability of plants, and will effectively prevent farmers from saving their own seeds. However, this copy-protection technique— dubbed 'Terminator'—is widely condemned in farming communities. The technology overrules intellectual property laws that exempt seed saving for private use, and it is likely to have a negative impact on medium-sized and small farming systems in developing countries. In this article it is argued that while copy protection in plants may expand seed markets, it may also seriously damage the reputation of the biotechnology industry. Corporate scientists and strategists should be more open to a public discussion about the fairness and legitimacy of seed production for private use.     

Voluntary Disclosure of Bad News

Abstract:   This paper shows that in a voluntary disclosure environment entailing both a fixed disclosure cost and a variable proprietary cost, partial disclosure equilibria may arise in which firms voluntarily disclose bad private information to the public. Furthermore, it is shown that such equilibria may arise more frequently as the threat of incuring proprietary cost increases and/or the proprietary cost itself increases.     

Environmental regulation of households: An empirical review of economic and psychological factors

The literature on sustainable consumption and environmental regulation of household behavior is dominated by conceptual and normative approaches. As a result, many suggestions lack a firm empirical basis. To overcome this deficiency, econometric studies in three areas of environmentally relevant activities of households are reviewed: residential use of energy, generation of solid waste and recycling, and residential use of water. Next to price and income elasticities, attention is devoted to individual socio-economic features and psychological factors, such as attitudes, knowledge, perceptions and values. Potential psychological determinants and related insights are further examined by discussing a range of representative and illustrative statistical–psychological studies of environmental behavior. One important general finding is that there are very few empirical studies that systematically combine socio-economic and psychological determinants. A range of insights for environmental policy is derived, and research recommendations are offered.     

Self-confidence and strategic behavior

We suggest that overconfidence (conscious or unconscious) is motivated in part by strategic considerations, and test this experimentally. We find compelling supporting evidence in the behavior of participants who send and respond to others’ statements of confidence about how well they have scored on an IQ test. In two-player tournaments where the higher score wins, a player is very likely to choose to compete when he knows that his own stated confidence is higher than the other player’s, but rarely when the reverse is true. Consistent with this behavior, stated confidence is inflated by males when deterrence is strategically optimal and is instead deflated (by males and females) when luring (encouraging entry) is strategically optimal. This behavior is consistent with the equilibrium of the corresponding signaling game. Overconfident statements are used in environments that seem familiar, and we present evidence that suggests that this can occur on an unconscious level.