Canadian Dietary Fat Substitutions, 1955–93, and Coronary Heart Disease Costs

In this paper, we use a prevalence-based, cost-of-illness approach to estimate the impact of change in dietary fat intake on coronary heart disease (CHD) costs in Canada. To this end, we review the clinical studies that have examined the relationship between fatty acid consumption and serum cholesterol levels. We estimate the increase in consumption of less saturated vegetable oils, which displaced some of the animal fats in the Canadian diet between 1955 and 1993, was responsible for an estimated 10.1% reduction in the incidence of CHD in Canada. This implies ex post a $832 million reduction in direct and indirect CHD costs in 1993. To put it another way, if Canadians had retained their 1955 diet in 1993, CHD costs would have been $832 million greater. Since many of these costs are external to marketplace, the magnitude of these numbers suggests a need to include health costs in the economic analysis of policies that affect fatty acid intake.     

‘The Impact of Personal and Organizational Moral Philosophies on Marketing Exchange Relationships: A Simulation Using the Prisoner’s Dilemma Game’

The purpose of this research is to examine the impact of individual and firm moral philosophies on marketing exchange relationships. Personal moral philosophies range from the extreme forms of true altruists and true egoists, along with three hybrids that represent middle ground (i.e., realistic altruists, tit-for-tats, and realistic egoists). Organizational postures are defined as Ethical Paradigm, Unethical Paradigm, and Neutral Paradigm, which result in changes to personal moral philosophies and company and industry performance. The study context is a simulation of an exchange environment using a variation of the prisoners’ dilemma game. A literature review is provided in the opening section, followed by details on the simulation, discussion of the results, and the implications for theory and practice.     

The Evolution of Social and Economic Networks

We examine the dynamic formation and stochastic evolution of networks connecting individuals. The payoff to an individual from an economic or social activity depends on the network of connections among individuals. Over time individuals form and sever links connecting themselves to other individuals based on the improvement that the resulting network offers them relative to the current network. In addition to intended changes in the network there is a small probability of unintended changes or errors. Predictions can be made regarding the likelihood that the stochastic process will lead to any given network at some time, where the stochastic process selects from among the statically stable networks and cycles. We apply these results to examples including the Gale-Shapley marriage problem. Thus the paper achieves two goals. First, it outlines a dynamic solution concept for networks. Second, it applies this concept to matching problems. Journal of Economic Literature Classification Numbers: A14, D20, J00.     

The product market opportunity loss of mandated disclosure

In the interests of protecting decision makers in the financial markets, the Securities and Exchange Commission requires publicly traded companies to publicly disclose certain accounting information. Such disclosure requirements however create a potential opportunity loss. They may destroy firms’ opportunities for implementing an alternative information acquisition and exchange regime – one that would optimize the firms’ product market profits. Nevertheless, we show that despite the previous imposition of an opportunity loss, firms may still favor future increased disclosure requirements. Finally, when information cost declines, although firms’ welfare may decrease, their desire for increased disclosure requirements always strengthens.     

Winning the battle for customers

A financial organisation's ability to retain its customer franchise faces ever-greater challenges from new competitors in the market-place, both locally and globally. Retention is not just a function of keeping customers happy. More than ever, organisations need to know what risks they run of losing customers: which customers, how many and why. Additionally, both the new players in the market and the traditional players need to know how and where they can win new customers. This paper focuses on a new approach to these issues based on global findings. The focus is on the UK banking industry, comparing the new players in the market using direct channels with the traditional high street banks.