Primacy in stock market participation: the effect of initial returns on market re-entry decisions

We examine whether initial returns influence investors’ decisions to return to the stock market following withdrawal. Using a survival analysis technique to estimate Finnish retail investors’ likelihood of stock market re-entry reveals that investors who experience lower initial returns are less likely to return, even after controlling for returns in the last month and average monthly returns for the duration of investing. This primacy effect is robust to accounting for endogeneity in investors’ exit decisions, and other behavioural biases such as recency and saliency of investment experience. Individual investors appear to be subject to primacy bias and tend to put a significant weight on initial experiences in re-entry decisions.     

Alternative utility functions: review,analysis and comparison

The paper reviews the development of von Neumann and Morgenstern (vNM) utility theory. Kahneman and Tversky’s (KT’s) prospect theory is introduced. The vNM utility function is compared and contrasted with KT’s value function. We prove the uniqueness of two popular utility functions. First, we show that all power utility functions possess constant RRA. And, we show that all exponential utility functions have constant ARA. The paper concludes by discussing applications, strengths and weaknesses of various utility functions.     

Project Valuation With Time-Varying Cash Flows: A Bayesian Approach

This article investigates the valuation of a project when the distributions of cash flows vary over time. The decision maker is assumed to be a Bayesian decision maker under uncertainty. Using the dynamic programming principle of backward induction and assuming that the capital asset pricing model is valid in each time period, we derive the project's valuation formulas and systematic risks, and investigate their characteristics. Our valuation formulas embed a Bayesian learning effect and differ from the traditional textbook capital budgeting formulas.     

Disentangling the tourism sector’s fragmentation: a hands-on coding/post-coding guide for interview and policy document analysis in tourism†

Qualitative tourism research is inevitably multidimensional. The fragmentation of the tourism sector across policy domains, scales, space and stakeholders leads to ‘blurry’ and aggregated datasets. Yet, tourism studies have a weak record in describing how results emanate from raw qualitative data. This paper presents a coding/post-coding scheme that proved robust in disentangling multidimensional tourism datasets in a middle-range research project that necessitated reflecting on the position of the researcher and the literature study during the data analysis. It describes the pragmatic decisions taken to organise the qualitative data from a research project on cross-border tourism and regional development processes. The paper also functions as a reflexive account of how this scheme came into existence. It contributes to the tools available to practically acknowledge the fragmentation of the tourism sector and the resulting multidimensional qualitative data, and calls for a more open accounting of the data analysis process and the underlying research values in tourism studies.     

When are two-stage and three-stage least squares estimators identical?

Necessary and sufficient conditions are derived for the numerical equivalence of the two-stage and three-stage least squares estimators in a linear simultaneous equations model. The conditions are easy to verify in any practical application.     

Interdependent welfare functions and optimal income distribution

The relationship between income distribution and social welfare is empirically analyzed, while explicitly allowing for the interdependence of individual welfare functions. The social welfare function is taken to be an additive function of individual welfare functions of income (WFIs). On the basis of Dutch data it is found that under certain conditions (such as absence of effects of income redistribution on productivity) an equal distribution of incomes is suboptimal. The interdependence of WFIs appears to have a pronounced effect on policy conclusions concerning the desirability of income redistribution vis-à-vis economic growth.     

Co-evolutionary Dynamics Within and Between Firms: From Evolution to Co-evolution

abstract The extensive selection–adaptation literature spans diverse theoretical perspectives, but is inconclusive on the role of managerial intentionality in organizational adaptation. Indeed this voluminous literature has more to say about selection and sources and causes of structural inertia than about self‐renewing organizations that might counteract such inertia. In this introductory essay, we identify four co‐evolutionary generative mechanisms (engines) – naïve selection, managed selection, hierarchical renewal and holistic renewal – which illustrate the extensive range of evolutionary paths that can take place in a population of organizations. In particular, the managed selection engine provides the foundations of the underlying principles of co‐evolving self‐renewing organizations: managing internal rates of change, optimizing self‐organization, and balancing concurrent exploration and exploitation. However, it is altogether clear that empirical co‐evolution research represents the next frontier for empirically resolving the adaptation selection debate. The essay concludes with a discussion of requirements for co‐evolutionary empirical research and introduces the empirical papers in this Special Research Symposium.     

Workers' committees in the Israeli labour relations system: an appraisal

In recent years the workers' committees—the lowest level of trade union organization—in manufacturing industry in Israel have shown increasing disregard for their central body, the Histadrut. So far the Histadrut's attempts to stem this alienation have been unsuccessful.