Anhydrous ammonia explosion in an ice cream plant

Causes and consequences of the explosion where firefighters and an employee barely escaped death or serious injury in December 1983.     

Markov chains under nonlinear expectation

In this paper, we consider continuous‐time Markov chains with a finite state space under nonlinear expectations. We define so‐called Q‐operators as an extension of Q‐matrices or rate matrices to a nonlinear setup, where the nonlinearity is due to model uncertainty. The main result gives a full characterization of convex Q‐operators in terms of a positive maximum principle, a dual representation by means of Q‐matrices, time‐homogeneous Markov chains under convex expectations, and a class of nonlinear ordinary differential equations. This extends a classical characterization of generators of Markov chains to the case of model uncertainty in the generator. We further derive an explicit primal and dual representation of convex semigroups arising from Markov chains under convex expectations via the Fenchel–Legendre transformation of the generator. We illustrate the results with several numerical examples, where we compute price bounds for European contingent claims under model uncertainty in terms of the rate matrix.     

Use of neurometrics to choose optimal advertisement method for omnichannel business

ABSTRACT

The omnichannel business has deeply affected retail practices and promotional strategies. This paper presents an empirical evaluation of omnichannel advertisement channels using neurometric response of the viewers. High precision camera and Galvanic Skin Response sensors were used to record neurometric information of respondents. The response of forty volunteers against a set of cosmetic advertisements was recorded to train a computer for predicting expected neurometric response for an advertisement channel. The recorded neurometric data was further analyzed to develop a set of business rules to measure the effectiveness of any advertisement channel. Later, comparative analysis of various advertisement channels was done.     

Do Shareholders Assess Managers' Use of Accruals to Manage Earnings as a Negative Signal of Trustworthiness Even When Its Outcome Serves Shareholders' Interests?*

We examine how shareholders' trust in managers is affected by (i) the outcome of earnings management (inconsistent vs. consistent with shareholders' interests) and (ii) the method of earnings management (accruals vs. real methods). Using a controlled experiment, we predict and find that trust is impaired when the outcome of earnings management suggests that managers have put their interests above shareholders' interests and/or when the method of earnings management suggests that managers misreported the firm's economic performance. We argue that shareholders assess managers putting their interests above shareholders' interests as a signal of untrustworthiness because it involves a transfer of the firm's resources away from shareholders to managers. We argue that shareholders also assess managers' use of accruals to manage earnings as a signal of untrustworthiness because, in this instance, managers misreport the firm's economic performance. Finally, we show that trust mediates the combined effects of the outcome of earnings management and the method of earnings management on investment decisions. Our study incrementally contributes to the literature by highlighting the adverse implications of managers' use of accruals to manage earnings even when its outcome serves shareholders' interests.     

Pigou in the 21st Century: a tribute on the occasion of the 100th anniversary of the publication of The Economics of Welfare

The year 2020 marks the centennial of the publication of Arthur Cecil Pigou’s magnum opus The Economics of Welfare. Pigou’s pricing principles have had an enduring influence on the academic debate, with a widespread consensus having emerged among economists that Pigouvian taxes or subsidies are theoretically desirable, but politically infeasible. In this article, we revisit Pigou’s contribution and argue that this consensus is somewhat spurious, particularly in two ways: (1) Economists are too quick to ignore the theoretical problems and subtleties that Pigouvian pricing still faces; (2) The wholesale skepticism concerning the political viability of Pigouvian pricing is at odds with its recent practical achievements. These two points are made by, first, outlining the theoretical and political challenges that include uncertainty about the social cost of carbon, the unclear relationship between the cost–benefit and cost-effectiveness approaches, distributional concerns, fragmented ministerial responsibilities, an unstable tax base, commitment problems, lack of acceptance and trust between government and citizens as well as incomplete international cooperation. Secondly, we discuss the recent political success of Pigouvian pricing, as evidenced by the German government’s 2019 climate policy reform and the EU’s Green Deal. We conclude by presenting a research agenda for addressing the remaining barriers that need to be overcome to make Pigouvian pricing a common political practice.

     

Package mountaineer tourists holidaying in the French Alps: An evaluation of key influences encouraging their participation

This study investigates the key influences that encourage mountaineer tourists, classified as a type of adventure tourist, to participate in package mountaineering holidays. There is limited understanding of why tourists take package adventure holidays, yet the demand for such holidays has grown dramatically in recent years. The author conducted in-depth interviews with mountaineer tourists either during or at the end of their package mountaineering holiday in the Chamonix region of the French Alps. Interview findings provide an insight into package mountaineer tourists. Firstly, mountaineering was an important part of respondents’ lifestyles. Secondly, contrary to previous research on experienced mountaineers, respondents did not consider risk as an important motive and they did not view themselves as risk takers. Thirdly, skills development and experience were key motives encouraging package mountaineering holiday participation. Fourthly, a major concern for respondents was to have a safe mountaineering experience in which the mountaineering organisation and the guide played a key role.     

Firm and industry effects within strategic management: an empirical examination

This study brings out the complementarities between resource-based and industrial organization schools within strategic management through an empirical examination of firm and industry effects. A variance component analysis of 264 single-business companies from 69 industries using 5- and 15-year periods suggests that firm effects are more important than industry effects on firm performance, but not on core strategies such as technology and marketing. The findings also point to the need to study core strategies at lower levels of aggregation to understand the sources of competitive advantage. © 1998 John Wiley & Sons, Ltd.     

Conference Announcement

Sporting texts are designed to prioritize, personalize and sensationalize characters in an attempt to capture audience attention. The sporting hero has traditionally been perceived of as epitomizing social ideals and masculine virtues, and as embodying values that learnt on the playing fields will readily transfer into everyday life. However, growing media intrusion signifies the contemporary sports star as a ‘damaged hero’ – the male sports celebrity exemplifying contemporary laddishness, drunken exploits, wife and girlfriend beatings and gay relationships, all of which influence the image of the modern day sports hero. In contrast, female sport stars are well documented as marginalized, trivialized and objectified, to the extent which sports heroines are both invisible and questionable as role models for young girls.

This article discusses ways in which sport stars are constructed as role models for young people. It cites instancing examples from the sports calendar of the ‘summer of sport’ 1996, in its discussion of the media construction of sports stars as villains, fools or heroes. It identifies the gender differentiated readings of sports stars as heroes and heroines and concludes that the ways in which media critics accord hero and role model status does not necessarily reflect the opinions of young people.     

Analysis of diisononyl phthalate in PVC consumer products used by children

Diisononyl phthalate (DINP) is widely added as a plasticizer in the production of polyvinyl chloride (PVC) used in children’s products. Forty-two plastic products intended for mouthing, or with a high potential for mouthing, by children of age group 0.5-3 years were analyzed for total and leachable phthalate contents. DINP was found in 64% of products tested and its concentration ranged from 3.9 to 44%. Migration of DINP from PVC products into saliva simulant was studied using simulated chewing activity and an Instron Universal Testing Machine. Under the conditions used in this study, the DINP migration rates from teethers and squeeze toys were found to vary from 0.04 to 1.29 µg/10 cm 2 /h. The migration rates show a 40-fold variation within the plastic products tested. However, 83% of the products showed a migration rate of <0.32 µg/10 cm2/h. The mean value was found to be 0.3 µg/10 cm2/h with a distribution median of 0.23 µg/10 cm2/h.     

Optimal dividend policies with random profitability

We study an optimal dividend problem under a bankruptcy constraint. Firms face a trade‐off between potential bankruptcy and extraction of profits. In contrast to previous works, general cash flow drifts, including Ornstein–Uhlenbeck and CIR processes, are considered. We provide rigorous proofs of continuity of the value function, whence dynamic programming, as well as comparison between discontinuous sub‐ and supersolutions of the Hamilton–Jacobi–Bellman equation, and we provide an efficient and convergent numerical scheme for finding the solution. The value function is given by a nonlinear partial differential equation (PDE) with a gradient constraint from below in one direction. We find that the optimal strategy is both a barrier and a band strategy and that it includes voluntary liquidation in parts of the state space. Finally, we present and numerically study extensions of the model, including equity issuance and gambling for resurrection.