Utility and economics

Summary Although utility has been the central concept in economics, economists have paid relatively little attention to its measurement. Generally, utility is measured indirectly via the revealed preference approach. We discuss problems with this approach and next introduce alternative direct measurement methods. The direct measurement methods are seen to spawn a so-called theory of preference formation, which explains differences in utility functions of different individuals. The similarities of this theory with related theories in sociology and psychology, and various sorts of empirical evidence, are reviewed. The paper concludes with a discussion of the implications of these findings for economic theories.This is a slightly adapted version of my inaugural address at Tilburg University. I thank Tom Wansbeek for his helpful comments.     

Alternate approach to unify CAPM and APT

We utilize the joint elliptical distribution to model a multi-factor return generating process and derive an equilibrium multi-beta capital asset pricing model (CAPM) in which the market portfolio and a set of nonelliptical factors are sufficient to price all financial assets. Most important, it is shown that the market portfolio, while generally nonelliptical, can proxy all elliptical factors and hence: including elliptical factors in addition to the market portfolio in the pricing equation contribute nothing to asset pricing. While the representative investor prices the exposure of aggregate wealth to various nonelliptical systematic risk factors, individual securities are priced in accordance to their contributions to different aspects of the risk of aggregate wealth. The present model collapses to the Sharpe-Lintner CAPM when either the market investor is neutral to nonelliptical risk factors or when all risk factors follow a joint spherical distribution. When residuals cancel out of the market portfolio, the present model collapses to Conner (1984) pricing model.     

Susceptibility to Advertising and Perceived Friend Norms: A Meta-Analysis of Materialism in Youths “Meta-Analysis of Materialism in Youths”

This study presents a meta-analysis assessing the antecedents that are associated with the influence that advertising and friends' behaviours have on the formation of materialistic behaviours in youth. We carried out a systematic review in which we identified an initial 217 studies. Of these, 32 were ultimately included in the analysis. Our results revealed significant relationships for the constructs associated directly with susceptibility to advertising (advertising viewing attitudes, attention to advertising, celebrity endorsements in advertising, advertising exposure and TV viewing frequency) and for perceived friends' norms (friends' attitudes, social comparisons with friends and communication with friends) with materialism in youth.     

An Experimental Study of Cognitive Dissonance,Product Involvement,Expectations, Performance and Consumer Judgement of Product Performance

Abstract

This experimental study investigates the effects of cognitive dissonance, expectations, and product performance on product evaluations. The study improves upon the methodological problems of the past experimental studies. The results of a 2×2×2 factorial design suggest that product involvement acts as a moderator in the postdecisional product evaluation process. The theoretical and empirical findings suggest communication guidelines for the advertisers.     

Distorted competition: Below-cost legislation, ‘marges arrière’ and prices in French retailing

Abstract

The aim of this article is to demonstrate that the French Galland Act, outlawing below-cost resale via new and more severe invoicing regulation, has reduced the intensity of price competition among retailers in relation to branded goods. Moreover, the reduced intensity of price competition in the retail industry has encouraged a lessening of competition among the manufacturers of major industrial brands. Together, these two effects have sown the seeds of a sustained increase in the price of major brands, accentuating retail competition based more on differentiation than on price. These sustained policies have favoured the development of retailer brands and of hard discount stores and finally encouraged new types of reactions from major retailers and leading manufacturers, such as new types of promotions circumventing the Galland Act and a more intense lobbying activity in order to reform it.     

Children's understanding of television advertising: a qualitative approach

In this paper children's understanding of television advertising was explored using focus groups in a qualitative approach. None of the 6 year olds, a minority of the 8 year olds and by no means all of the 10 year olds were able to articulate an understanding of the persuasive nature of advertising. It was concluded that children's understanding of the persuasive intent of television advertising is less well developed than previously thought, challenging current marketing perspectives. These findings raise questions for European legislation, UK broadcasting practices and for advertisers and manufacturers who target children.     

适中论

当代的主调是和平与发展；在这个当代，本文尝试从人文、社科、科技三个方面共十个命题，论述一个观点，“为了适，必须中”：（１）人文思考——哲理，历史；（２）社科评价——政治运动，宣传导向，经济体制，收获递减律；（３）科技分析——数学的极值，系统工程的优化技术，材料物理的能量学与动力学分析，功能（性能、才能）过剩