The welfare costs of monopoly are larger than you think

We show that monopoly is the parent of monopsony when an industry employs specialized resources. This means that the welfare loss from monopoly and monopolization is larger than commonly portrayed. Copyright © 2010 John Wiley & Sons, Ltd.     

Recursive Formula for Arithmetic Asian Option Prices

I derive a recursive formula for arithmetic Asian option prices with finite observation times in semimartingale models. The method is based on the relationship between the risk‐neutral expectation of the quadratic variation of the return process and European option prices. The computation of arithmetic Asian option prices is straightforward whenever European option prices are available. Applications with numerical results under the Black–Scholes framework and the exponential Lévy model are proposed. © 2012 Wiley Periodicals, Inc. Jrl Fut Mark 34:220–234, 2014     

Examining the relations between open innovation climate and job satisfaction with a PLS path model

The paper studies the relations between open innovation climate and job satisfaction, in particular the causal effects of the various dimensions of open innovation climate on different facets of job satisfaction. We assume firms which pursuing open innovation climate will result in higher level of employee job satisfaction. Both open innovation climate and job satisfaction are assumed to be multidimensional constructs (second-order model). Meanwhile the difference caused by employees’ organizational level was also investigated. A partial least squares path model was developed, in which significant effects were discovered. This study provides valuable materials for hoteliers who want to promote open innovation climate in their organizations.     

Engagement partner specialization and corporate disclosure transparency

This paper explores the association of audit partners' industry specialization with corporate disclosure transparency and the latter's informativeness. The distinctive institutional designs of partner signature requirement and Information Disclosure and Transparency Ranking System (IDTRS) adopted in Taiwan allow us to empirically address the issue. We posit and find that the rankings from the IDTRS are higher for firms audited by industry specialist engagement partners than for firms audited by non-specialist engagement partners. Additionally, the results show that the probability of informed trade (PIN) proxy for information asymmetry is negatively associated with the rankings for clients of industry specialist engagement partners, but not for clients of industry non-specialist engagement partners. The results are robust with respect to alternative estimation method and alternative measures of industry specialization. Overall, the evidence suggests that industry specialist engagement partners enhance the credibility of corporate disclosure transparency, through which information asymmetry is further declined. The evidence provides policy implications to the partner signature requirement adopted in Taiwan and China.     

Cultural Differences in Online Community Motivations: Exploring Korean Automobile Online Brand Communities (KAOBCs) and American Automobile Online Brand Communities (AAOBCs)

To gain a better understanding of online brand communities, this study has examined why people joined in online brand communities and whether there were some differences in the motivations of Internet users based on different cultures. Open-ended questions were asked to the community members from both South Korean Automobile Online Brand Communities (KAOBC) and American Automobile Online Brand Communities (AAOBC) in the first stage and then generated and utilized an online survey for the study. The study found that KAOBC members tended to have a stronger social network, business, and communication motivations than AAOBC members. As a primary motivation, information seeking is the strongest motivation for members of both KAOBC and AAOBC. They had a similar level of information motivation.     

Twenty Years of Expenditure Inequality in Indonesia, 1993–2013

In this article, we consider the recent increase in inequality in Indonesia. We make new, consistent estimates of expenditure inequality for 1993–2013, using several measures that draw on household expenditure data from the National Socioeconomic Survey (Susenas) for 1993–2013. In doing so, we note that the central statistics agency, Badan Pusat Statistik (BPS), used grouped data for its estimates of inequality until 2009 and that this underestimated inequality up to then. Thus the rise in inequality reported since 2009 actually has a longer history. We argue that Indonesia experienced divergence and convergence at the same time: the magnitude of the rise in inequality was significant (divergence), but the rise was greatest in provinces or districts with low initial levels of inequality (convergence). We consider the literature on drivers of changes in inequality and identify a set of hypotheses, with an empirical basis, which we introduce as potential Indonesian-specific drivers of rising inequality for future exploration.     

Consumer perception,information provision,and regulation of insurance markets

Available evidence shows that consumers overinsure against modest risks. For instance, a majority of consumers tend to choose too low a level of deductible for homeowners insurance and automobile insurance, and purchase excessive warranties for electronics and other durable products such as automobiles and furniture. The analysis demonstrates that overinsurance decreases consumer welfare and increases insurers’ profits. This tendency of overinsurance stems from lack of information about the probability and magnitude of loss, and it calls for policies that require insurers or third-party organizations to provide more, albeit not perfect, information and data for consumers before they make insurance-purchase decisions. The implications of the analysis for other financial products such as stocks and deposits are discussed.