An economic strategy for America’s inner cities: Addressing the controversy

Conclusion Inner cities must compete, and can compete. Developing a new strategy will require an understanding of what is unique about each inner city, how to build on its advantages, and a plan to eliminate or reduce the many disadvantages to conducting business. This process will require the commitment and involvement of business, government, and the nonprofit sector.     

THE PROPOSED INTRODUCTION OF FUTURES‐STYLE MARGINING IN THE UNITED STATES: AN AUSTRALIAN COMPARISON

We extend the quadratic approximation method to examine American‐style options traded using futures‐style margining and show that an early exercise premium can exist when the cost of carry is negative. Empirical results based on a reduced form of the model using futures‐style call options traded on the Australian All Ordinaries Share Price Index are consistent with previous research: call option early exercise premiums are economically zero. Full option prices are examined by comparing observed futures‐style with theoretical stock‐style values. We find futures‐style values exceed stock‐style values and argue that the increase results from improvements in liquidity. The findings are particularly relevant given the pending decision at the Commodity Futures Trading Commission to introduce a futures‐style system in the United States. JEL classification: G13, C13     

The Effects of Negatively Valenced Emotional Expressions in Online Reviews on the Reviewer,the Review,and the Product

The authors examine the effects of negatively valenced emotional expressions (NVEE; e.g., intense language, all caps, exclamation points, emoticons) in online reviews and reveal important boundary conditions for their effects. Specifically, Study 1 showed that NVEE directly promote review helpfulness and damage attitude toward the product when used by experts. In contrast, for novices, their use of NVEE was considered a poor reflection on them and failed to directly affect attitude toward the product. Further, attributions of reviewer rationality and trustworthiness were positively associated with review helpfulness and attitude toward the product. Interestingly, language complexity is a trigger to reverse the effects, as found in Study 2. For novices (experts), the adverse effect on trustworthiness is eliminated (introduced) but the adverse effect on attitude toward the product is introduced (eliminated) when they include more complex language accompanied by NVEE in their online reviews. Both studies uncover when source discounting is active for experts and novices, making them equally influential in some cases. Theoretical and managerial implications are provided.     

The effect of bid withdrawal in a multi-object auction

The Federal Communications Commission currently utilizes a simultaneous multi-round ascending bid auction to allocate Personal Communication Services licenses. In the auction, participants are allowed to withdraw standing bids at a penalty. The penalty is equal to the maximum of zero or the difference between the value of the withdrawn bid on a license and the highest bid after the withdrawal on that license. The withdrawal rule is designed to assist bidders wishing to assemble combinations of licenses who find themselves stranded with an assortment of licenses for which their bids sum to more than their value. This paper reports results of experiments that examine the effect of the withdrawal rule in environments in which losses can occur if packages of licenses must be assembled piecemeal. The experiments demonstrate that there is a tradeoff with using the rule: efficiency and revenue increase, but individual losses are larger. Furthermore, the increased efficiency does not outweigh the higher prices paid so that bidder surplus falls in the presence of the withdrawal rule. Received: 10 October 1997 / Accepted: 10 September 1998     

Discrimination by Black Males Revisited:

ABSTRACT In an earlier article on faculty salary discrimination at a Southern, historically black, public university (SHBU), the authors presented evidence of salary discrimination by black males against other race-sex groups (Riggs and Dwyer 1995). The authors now contrast SHBU's salary model with the model of Riggs and Dwyer and apply the latter to new data to determine whether SHBU eliminated race and sex discrimination in faculty salaries. After equity adjustments, the evidence suggests that SHBU has eliminated the salary discrimination found by Riggs and Dwyer in their earlier study.     

The liquidity effects associated with addition of a stock to the S&P 500 index: evidence from bid/ask spreads

This study examines changes in stock liquidity, as measured by the bid/ask spread, when a stock is added to the S&P 500 Index. The paper presents evidence of a significant decrease in the bid/ask spread upon S&P 500 addition, however, this effect is limited to only those stocks that were not trading listed options. Further, the decrease in the bid/ask spread for nonoptioned stocks is accompanied by a significant and permanent increase in share price and trading volume. While optioned stocks experience a permanent increase in trading volume, they experience only a temporary increase in share price. The findings for optioned stocks support the hypothesis that the price and volume effects associated with S&P 500 addition derive from temporary price pressure. Findings pertaining to the nonoptioned stocks indicate that the price and volume effects associated with S&P addition reflect enhanced stock liquidity. The decrease in the bid/ask spread for nonoptioned stocks is attributed to informational efficiencies achieved via index arbitrage trading, and it is argued that this effect is mitigated for optioned stocks due to the pre-existence of arbitrage trading between the option and the underlying stock.     

Indirect tests of the Haugen-Lakonishok small-firm/January effect hypotheses: window dressing versus performance hedging

Equity mutual fund data from 1976–1993 is used to test hypotheses that distinguish window dressing from performance hedging. No significant difference is found pre/post 1983 in the number of funds choosing non-December fiscal year ends or in the percentage of dollars invested when comparing December/non-December fiscal year ends. Significant differences are found in both January returns for mutual funds with December/non-December fiscal year ends and in one month returns for funds with/without a fiscal year end in the previous month. Therefore, if the small-firm/January effect is portfolio manager related, performance hedging, not window dressing, is the more probable source for the “excess” returns.