Utility functions of equivalent form and the effect of parameter changes on optimum decision making

We derive a class of utility functions that are equivalent with respect to a well-defined functional form. We study the case of constant relative risk aversion (of some order) to investigate on different equivalence relations in order to determine the, possibly infinite, number of equivalence classes when utility functions satisfy a specific form. Then we apply our results to standard applications in economics and finance, for example, to the effect of price volatility on optimum hedging. We would like to thank Bernhard Eckwert and Itzhak Zilcha for constructive comments and suggestions.     

The competitive firm under price uncertainty: the role of information and hedging

We study the impact of transparency in a commodity market on the decision problem of a competitive firm under price uncertainty and hedging opportunities. Market transparency is modeled by means of the informational content of publicly observable signals which are correlated with the random price. We find that the impact of more transparency on labor employment and production depends on the firm’s technology. In particular, more transparency may result in lower average output even though on average more labor has been used in the production process. We also analyze the link between market transparency and the welfare of the firm. We are grateful to two anonymous referees who made extremely useful comments and suggestions.     

Erratum to: Exploring Factors Affecting Digital Piracy Using the Norm Activation and UTAUT Models: The Role of National Culture

The model emphasizes the ethical dynamics of compassion in hospitality settings by suggesting that under an organizational ethical climate, the hotel staff will be more morally aware of peers’ pain and suffering, and motivated to participate in delivering compassion. Based on the positive psychology focus on compassion as individual states and traits supporting interpersonal dealings, the paper operationalizes compassion based on four individual factors involved in the compassionate process: (a) empathic concern, or an other-oriented emotional response elicited by and congruent with the perceived welfare of a person in need; (b) mindfulness, a state of consciousness in which attention is focused on present-moment phenomena occurring both externally and internally; (c) kindness, or understanding the pain or suffering of others; and (d) common humanity, or seeing others’ experiences as part of the larger human experience. Data were collected from 280 employees at ten hotels in the Canary Islands (Spain). With the exception of self-interest, results of multiple linear regressions demonstrate that each of the six interpreted factors of ethical climate has substantive effects on any of the studied elements of staff compassion. The egoistic-related and principle-related climate factors generated a more consistent and intense compassionate reaction, suggesting that the staff is moved to act out of compassion either to assure that the team succeeds or to support each other out of moral obligation.     

Globalisation and factor returns in competitive markets

The standard competitive trade model, extended to include many goods and factors, is used to analyze the effect of goods and factor market integration on average international disparities in the real returns of internationally immobile factors. It is shown that goods market integration decreases international real return differentials for all factors. We derive sufficient conditions for this result to hold for the subgroup of internationally immobile factors as well. While there is a presumption for similar results to hold with international factor market integration, we show that this is true for international migration but in general not for international investment.     

Produktmetaphorik als instrument der marktprofilierung

In Zeiten zunehmender S?ttigungstendenzen der Konsumgüterm?rkte kommt der Profilierung des eigenen Angebotes in den Augen der Konsumenten eine herausragende Bedeutung zu. Hierbei stellt Design im Marketing eines der bedeutendsten Instrumente dar, zur Profilierung des eigenen Marktauftritts beizutragen. Vor diesem Hintergrund setzt sich der vorliegende Beitrag zum Ziel, die M?glichkeiten des Einsatzes von Metaphern zur Schaffung neuartiger und origineller Produktdesigns systematisch zu untersuchen. Dabei stehen neben der Frage, welche Funktionen metaphorisches Design im Rahmen des Marketing erfüllen kann, insbesondere überlegungen zur Umsetzung im Vordergrund.     

Inflation Risk, Hedging, and Exports

This paper analyzes optimal production and hedging decisions of a risk-averse exporting firm in a developing country. The firm cares about real profits, since the spot exchange rate and the domestic price level are uncertain. It is demonstrated that a separation property holds although there are two sources of risk and only one hedging instrument exists. The authors examine the optimal risk management of the firm. In contrast to most hedging models, the real risk premium is important for the optimal hedging strategy.