Empirical Evaluation of Fair Use Flat Rate Strategies for Mobile Internet

The fair use flat rate is a promising tariff concept for the mobile telecommunication industry. Similar to classical flat rates it allows unlimited usage at a fixed monthly fee. Contrary to classical flat rates it limits the access speed once a certain usage threshold is exceeded. Due to the current global roll-out of the LTE (Long Term Evolution) technology and the related economic changes for telecommunication providers, the application of fair use flat rates needs a reassessment. We therefore propose a simulation model to evaluate different pricing strategies and their contribution margin impact. The key input element of the model is provided by so-called discrete choice experiments that allow the estimation of customer preferences.     

Higher education and firms: on the interaction between research and regional policies

In the European Union, a series of competencies are shared between a central agency called the European Commission, and the governments of the Member States. This paper focuses on two of those policies: research and regional development. Here, we model and discuss how the level of commitment of a central authority toward poor regions affects the design of the best decision-making process. We explore cases of full centralization and full decentralization, and situations where the two levels of government are allowed to take decisions, either simultaneously or sequentially. In the latter case, we make a distinction between a situation where the central agency decides first as in most federations, and one in which it decides second, then being an agent of national governments. This setting is especially relevant for the European Union. We show, in particular, that when the degree of commitment of the center is high, assignment of redistributive competencies to both levels of power is a proxy for centralization. Additionally, the poorer region may find its best interest in an institutional design where the regions decide first.     

The Evolution and Challenges of the Concept of Organizational Virtuousness in Positive Organizational Scholarship

This study considers the potential for influencing business students to become ethical managers by directing their undergraduate learning environment. In particular, the relationship between business students’ academic cheating, as a predictor of workplace ethical behavior, and their approaches to learning is explored. The three approaches to learning identified from the students’ approaches to learning literature are deep approach, represented by an intrinsic interest in and a desire to understand the subject, surface approach, characterized by rote learning and memorization without understanding, and strategic approach, associated with competitive students whose motivation is the achievement of good grades by adopting either a surface or deep approach. Consistent with the hypothesized theoretical model, structural equation modeling revealed that the surface approach is associated with higher levels of cheating, while the deep approach is related to lower levels. The strategic approach was also associated with less cheating and had a statistically stronger influence than the deep approach. Further, a significantly positive relationship reported between deep and strategic approaches suggests that cheating is reduced when deep and strategic approaches are paired. These findings suggest that future managers and business executives can be influenced to behave more ethically in the workplace by directing their learning approaches. It is hoped that the evidence presented may encourage those involved in the design of business programs to implement educational strategies which optimize students’ approaches to learning towards deep and strategic characteristics, thereby equipping tomorrow’s managers and business executives with skills to recognize and respond appropriately to workplace ethical dilemmas.     

Signing trades and an evaluation of the Lee–Ready algorithm

We use techniques developed to analyze the Supply Curve in liquidity models in order to analyze the accuracy of the Lee and Ready algorithm, both for highly liquid and relatively liquid stocks. Through the use of order book data combined with tick data, we are actually (somewhat tediously) able to tell whether or not a given trade is buyer or seller initiated. For those trades where such knowledge is certain, the accuracy of the Lee and Ready algorithm is not as accurate as has been assumed previously. We can essentially prove that the Lee and Ready algorithm is always at least 55% accurate, and is around 61% accurate for highly liquid stocks (i.e., the top 50 of the S&P 100).     

Capacity Commitment versus Flexibility

We show how technological flexibility choices and equilibrium configurations (both simultaneous and sequential duopoly) depend on six industry characteristics. Low market volatility combined with intermediate market size favors inflexible technologies; large values of either volatility or size favor flexible technologies; low or intermediate values of both favor the coexistence of flexible and inflexible technologies. The possibility of a flexibility trap exists in industries of low volatility and intermediate size. Entry prevention can sometimes be achieved by inflexible technologies or flexible technologies, depending on the industry characteristics.     

Asset allocation over the life cycle: How much do taxes matter?

We study the welfare effect of tax-optimizing portfolio decisions in a life cycle model with unspanned labor income and realization-based capital gain taxation. For realistic parameterizations of our model, certainty equivalent welfare gains from fully tax-optimized portfolio decisions are less than 2% of present financial wealth and lifetime income compared to a heuristic portfolio policy ignoring the taxation of profits (capital gains, interest and dividend payments). Compared to a heuristic portfolio policy that only ignores the realization-based feature of capital gain taxation and instead assumes mark-to-market taxation, these gains are less than 0.5%. That is, our work provides a justification for ignoring taxes in life cycle portfolio choice problems – a wide-spread assumption in that literature. However, if capital gains are forgiven at death (as in the U.S.), investors with strong bequest motives face substantial welfare costs when not tax-optimizing their portfolio decisions towards the end of the life cycle.     

Determinants of the Choice of Migration Destination*

This paper examines migrants’ choice of destination conditional on migration. The study uses data from two rounds of Nepal Living Standard Surveys and a Population Census and examine how the choice of a migration destination is influenced by various covariates, including income differentials across possible destinations. We find that migrants move primarily to nearby, high population density areas where many people share their language and ethnic background. Better access to amenities is significant as well. Differentials in average income across destination districts are significant in univariate comparisons but not once we control for other covariates. Differentials in consumption expenditures are statistically significant but smaller in magnitude than other determinants. It is differentials in absolute, not relative, consumption between destination districts that are correlated with the destination of work migrants. Except for the latter, results are robust to different specifications and datasets.     

Book reviews

Ohne Zusammenfassung     

Asset Prices and History: The Case of Austria

Historical events are reflected in asset prices. Looking at Austrian government bond prices traded on the Swiss stock exchange during WWII provides therefore a useful way of interpreting the importance the thousands of people directly and indirectly engaged in stock markets attributed to various war events. An econometric analysis of the relationship between government bond values and events in Austrian history reveals that some generally considered crucial events connected with WWII are clearly reflected in Austrian government bond prices. This holds, in particular for the beginning and the end of the war. The annexation of Austria by Germany in 1938 which seemingly looked as being overwhelmingly and passionately welcomed by the Austrian population negatively affected the evaluation of Austrian government bonds, i.e. it was considered to be to the disadvantage of Austria by the people who put their own personal fortune at risk.