Consumer Affairs Departments in the United States and the Netherlands: A Comparative Analysis

Over a decade ago Hansen and Schoenheit (1986), in their Journal of Consumer Policy article, concluded that Consumer Affairs Departments (CADs) offer potential for improving organisational performance in the market place and that their transferability to the European context would be warranted. In this article we trace and analyse the development of Consumer Affairs Departments in the United States and the Netherlands on the basis of fourteen case studies. On the basis of a comparative analysis we conjecture that the application of information technology, the application of communication technology, and personnel management style could be considered as major determinants of differences with regard to CADs in the aforementioned countries. We conclude the article with a number of building blocks that organisations may use in preparing their CADs for the decade to come.     

Volatility transmission in emerging European foreign exchange markets

This paper studies the dynamics of volatility transmission between Central European (CE) currencies and the EUR/USD foreign exchange using model-free estimates of daily exchange rate volatility based on intraday data. We formulate a flexible yet parsimonious parametric model in which the daily realized volatility of a given exchange rate depends both on its own lags as well as on the lagged realized volatilities of the other exchange rates. We find evidence of statistically significant intra-regional volatility spillovers among the CE foreign exchange markets. With the exception of the Czech and, prior to the recent turbulent economic events, Polish currencies, we find no significant spillovers running from the EUR/USD to the CE foreign exchange markets. To measure the overall magnitude and evolution of volatility transmission over time, we construct a dynamic version of the Diebold–Yilmaz volatility spillover index and show that volatility spillovers tend to increase in periods characterized by market uncertainty.     

The reaction of asset prices to macroeconomic announcements in new EU markets: Evidence from intraday data

We estimate the impact of macroeconomic news on composite stock returns in three emerging European Union financial markets (the Budapest BUX, Prague PX-50, and Warsaw WIG-20), using intraday data and macroeconomic announcements. Our contribution is twofold. We employ a larger set of macroeconomic data releases than used in previous studies and also use intraday data, an excess impact approach, and foreign news to provide more reliable inferences. Composite stock returns are computed based on 5-min intervals (ticks) and macroeconomic news are measured based on the deviations of the actual announcement values from their expectations. Overall, we find that all three new EU stock markets are subject to significant spillovers directly via the composite index returns from the EU, the U.S. and neighboring markets; Budapest exhibits the strongest spillover effect, followed by Warsaw and Prague. The Czech and Hungarian markets are also subject to spillovers indirectly through the transmission of macroeconomic news. The impact of EU-wide announcements is evidenced more in the case of Hungary, while the Czech market is more impacted by U.S. news. The Polish market is marginally affected by EU news. In addition, after decomposing pooled announcements, we show that the impact of multiple announcements is stronger than that of single news. Our results suggest that the impact of foreign macroeconomic announcements goes beyond the impact of the foreign stock markets on Central and Eastern European indices. We also discuss the implications of the findings for financial stability in the three emerging European markets.     

Nondiscriminating Foreclosure and Voluntary Liquidating Costs

Since liquidation and bankruptcy are costly, researchers havetried to find out why the claimants of a troubled firm do notwork out a deal to avoid these costs. In this article we showthat if a creditor has to deal with multiple borrowers who mightdefault, it may be optimal for the creditor to randomly rejectrequests for a loan workout. We further demonstrate that theoptimal acceptance rate used by a creditor is positively relatedto the liquidating cost and negatively related to the defaultbenefit. Our model is particularly relevant when analyzing thedefault decisions of mortgage borrowers and small business owners.     

Time-inconsistent risk preferences in a laboratory experiment

We conduct an experiment to explore the time-consistency of risk preferences in a multi-period betting game. Specifically, subjects planned their contingent betting decisions in advance then played the game dynamically later to determine whether their respective decisions matched. We find that subjects took more risk than planned in their initial bet and after losses. In addition, this increased risk was associated with an increase in breakeven mental accounting. Our findings indicate that immediacy of outcomes can lead to impulsive risk-taking behavior and highlight the importance of precommitment to long-term financial planning.     

How and When Socially Entrepreneurial Nonprofit Organizations Benefit From Adopting Social Alliance Management Routines to Manage Social Alliances?

Social alliance is defined as the collaboration between for-profit and nonprofit organizations. Building on the insights derived from the resource-based theory, we develop a conceptual framework to explain how socially entrepreneurial nonprofit organizations (SENPOs) can improve their social alliance performance by adopting strategic alliance management routines. We test our framework using the data collected from 203 UK-based SENPOs in the context of cause-related marketing campaign-derived social alliances. Our results confirm a positive relationship between social alliance management routines and social alliance performance. We also find that relational mechanisms, such as mutual trust, relational embeddedness, and relational commitment, mediate the relationship between social alliance management routines and social alliance performance. Moreover, our findings suggest that different types of social alliance motivation can influence the impact of social alliance management routines on different types of the relational mechanisms. In general, we demonstrate that SENPOs can benefit from adopting social alliance management routines and, in addition, highlight how and when the social alliance management routines–social alliance performance relationship might be shaped. Our study offers important academic and managerial implications, and points out future research directions.     

A resolution of N-person prisoners' dilemma

Summary. The purpose of this paper is to show that cooperation is possible in N-person prisoners' dilemma if players have incomplete information on the order of their moves. We consider a modified version of N-person prisoners' dilemma in which players sequentially move in the order determined by Nature, and during the play they get some information about others. We provide an information partition and a condition of payoffs for which cooperation is attained in an equilibrium. Further, for the case that full cooperation is not attained, we examine the largest partial cooperation which is achieved in an equilibrium. Received: March 5, 1995; revised version August 11, 1996     

Measuring business cycles: Empirical Mode Decomposition of economic time series

This paper continues discussion on the issue of time series decomposition by presentation of the Empirical Mode Decomposition technique. This technique outperforms well-known time-series filters by providing a deeper insight into the structure of time series.