Buchbesprechungen

Ohne Zusammenfassung     

Revisiting Tversky's Trail—How Money Makes a Subtle Difference in Similarity Effect Experiments

Recent findings in research on context effects indicate that, as opposed to choices under hypothetical settings, compromise effects are significantly attenuated in binding settings that include real payments for products. The present investigation examines to what extent this finding applies to yet another context effect, namely the similarity effect (SE). The SE stipulates that, compared with initial shares of two options A and B in a binary choice set, the introduction of an option C that is dissimilar to B but similar to A will hurt the latter more than the nonadjacent option B. The conducted online survey examines the SE in unforced choices of experienced consumers between real brands across three consumer good categories. The results confirm that the SE is evidently reduced under real payment conditions, hence confirming the hypothesis that the applied choice setting moderates the efficacy of the composition of choice sets.     

New Belgian Stock Market Returns: 1832–1914

The limited availability of high quality and computer readable data seriously impedes research in history and finance. We introduce a new monthly return series for Belgian owned equity based on Brussels Stock Market data for the period 1832–1914 as an improvement to the popular Drappier index. Over this period, our dataset includes 446,374 prices, 23,976 dividends, 371 stock and reverse splits (or other capital operations) on 2037 stocks of 1387 (foreign and Belgian) companies. Our dataset includes all shares and bonds but also high-quality information on prices, dividends, shares outstanding and market capitalization. In addition, company, country and sector information is available. We construct value weighted, price weighted and equally weighted indices as well as dividend yields. We find three important results. First, total nominal returns hover between 3.29% and 5.35% per annum, depending on how individual stocks are aggregated into the index. Second, dividend income constitutes the major part of total return and dividend distributions have a clear seasonal pattern. Third, the results highlight several drawbacks of the Drappier indices, especially an upward bias in expected equity performance.     

Category management and consumer choice

This paper shows the results of an exploratory analysis of the structure of a complex product category: Wine. In complex categories, a usual strategy of consumers is the partitioning of alternatives into homogeneous subsets and the sequential eliminations of subsets until a product/brand is chosen from among few homogeneous alternatives in the last subset. To identify if there is such a kind of strategy and the product attributes involved is of great interest for the retailer. After a discussion of the different modelling alternatives of the choice process, the authors provide an application of the additive trees (ADDTREE) model to explore the hierarchical structure. The ADDTREE results provide a first overview of the competitive market structure of the wine category: competition becomes more intense as the wine category is partitioned by, first, the type of wine criteria and, second, the designation of origin (DO) criteria.     

Matrix Representation of Conflict Resolution in Multiple-Decision-Maker Graph Models with Preference Uncertainty

Explicit matrix representations of solution concepts in a graph model of a multiple-decision-maker conflict with preference uncertainty are developed. In a graph model, the relative preferences of each DM over the available states are crucial in determining which states are stable according to any stability definition (solution concept). Unfortunately, it is often difficult to obtain accurate preference information in practical cases, so models that allow preference uncertainty can be very useful. In this work, stability definitions are extended to apply to graph models with this feature. The extension is easiest to implement using the matrix representation of a conflict model, which was developed to ease the coding of logically-defined stability definitions. Another benefit of matrix representation is that it facilitates modification and extension of the definitions.     

Exchange rate determination: a theory of the decisive role of central bank cooperation and conflict

Economists’ faith that variable exchange rates benevolently equilibrate has been empirically disconfirmed. That faith is here tackled at its theoretical core with an exchange rate model that although ultra abstract, includes the undeniable fundamentals of market power and differential goals of central bankers and large-scale private players. It permits a game theoretic analysis under the assumption that all agents maximize their payoffs. The paper then relaxes the assumption of maximising agents, allowing for a more complex and thus realistic second version of the model that is interpretable within SKAT, the Stages of Knowledge Ahead Theory of risk and uncertainty. In an experimental setting, this second version of the model points to: a) the inability of agents in central banks, governments and the private real and financial sectors to operate in maximising ways; b) destructive central bank conflict; and c) the widely discrepant outcomes arising from the dynamics of individual personality differences. The paper’s theoretical and empirical findings thus both point to the merits of a single world currency.     

Outsourcing of advanced business services in the Spanish economy: Explanation and estimation of the regional effects

The use of advanced business services has become an essential element for competitiveness in modern economies in which traditional competitive advantages based on prices, lower labour costs or the abundance of natural resources are being replaced by new advantages based on higher quality, greater knowledge or the use of information and communication technologies (ICTs). Within this context certain services (computing, communications, human resources, engineering, consulting or management) are generally outsourced so as to exploit the advantages derived from specialisation and division of labour, as well as those of economies of scope and scale. However, some businesses, sectors or regions appear to have very different patterns of outsourcing advanced producer services. This paper presents an explanation of elements of business outsourcing decisions applied to the Spanish economy, applying discrete response models to the information obtained in a survey elaborated by the authors. The data thus obtained have enabled us to identify differences between the Spanish regions in the tendencies of businesses to use internal or external advanced services.     

Endogenizing leadership in tax competition

In this paper we extend the standard approach of horizontal tax competition by endogenizing the timing of decisions made by the competing jurisdictions. Following the literature on the endogenous timing in duopoly games, we consider a pre-play stage, where jurisdictions commit themselves to move early or late, i.e. to fix their tax rate at a first or second stage. We highlight that at least one jurisdiction experiments a second-mover advantage. We show that the Subgame Perfect Equilibria (SPEs) correspond to the two Stackelberg situations yielding to a coordination problem. In order to solve this issue, we consider a quadratic specification of the production function, and we use two criteria of selection: Pareto-dominance and risk-dominance. We emphasize that at the risk-dominant equilibrium the less productive or smaller jurisdiction leads and hence loses the second-mover advantage. If asymmetry among jurisdictions is sufficient, Pareto-dominance reinforces risk-dominance in selecting the same SPE. Three results may be deduced from our analysis: (i) the downward pressure on tax rates is less severe than predicted; (ii) the smaller jurisdiction leads; (iii) the ‘big-country-higher-tax-rate’ rule does not always hold.     

Competition Policy as Strategic Trade with Differentiated Products

The paper analyzes how countries use competition policy as a tool for strategic trade. In the model, two countries export to a third country. Each exporting country is endowed with a set of differentiated products. Each government chooses the number of exporters for its country and the products that each exporter sells in the first period, and a tax policy in the second period. Firms choose prices or quantities independently in the third period. In the unique subgame‐perfect equilibrium, both countries group all their products within a single firm—the “national champion policy.” We study the implication of different assumptions about the timing of the game.