Experimental Foreign Exchange Markets

The paper analyzes experimental markets where subjects buy and sell two different assets. The assets' properties vary across treatments, and their relative price is the exchange rate. Although both assets uniformly exhibit bubbles, the exchange rate satisfies cross‐currency arbitrage. There is no evidence of a positive risk premium in these markets, and almost all subjects' forecasts of the exchange rate are rational.     

Enhancing New Product Adoption at the Base of the Pyramid: A Contextualized Model

Companies are recognizing and pursuing the opportunity to serve the market known as the base of the pyramid (BOP), i.e., consumers who live in poverty in developing countries. The BOP constitutes the largest remaining global market frontier for businesses. Until recently, it has been ignored because of its seeming unattractiveness and insurmountable challenges compared with middle‐ and high‐income markets. However, BOP consumers desire and are able to pay for quality products tailored to their needs. In response, firms are developing new products specific to the demands and conditions of this low‐income population. To innovate effectively, ensuring new products are well received, firms need to know how to enhance new product adoption among these consumers despite the barriers of poverty. We address this need by developing a model of adoption contextualized to the BOP. Based on theories of innovation and poverty, and drawing on the emergent subsistence market literature, we propose that certain new product characteristics, social context dynamics, and marketing environment approaches moderate or counter some of the limits of poverty, making adoption possible. We then discuss the managerial and theoretical implications of our model for innovation practitioners and researchers.     

Satire and Geopolitics: Vulgarity,Ambiguity and the Body Grotesque in South Park

Humour and laughter have become the subject of recent geopolitical scrutiny. Scholars have explored the affirmative and liberatory possibilities of humour, and the affective bodily dimensions of laughter as tools for transformative action in critical geopolitics. Humour that is vulgar and politically ambiguous is yet to be explored as a potent geopolitical avenue of enquiry. Studies of satire have suggested that rather than contesting entrenched geopolitical beliefs, satirical shows can serve to further divide audiences both amenable and antagonistic to the satire in question. I argue that this should not involve a wholesale rejection of satirical shows, as humour that uses irony, subversion, and other discursive techniques is just one way satirical media becomes an effective commentator on political issues. I examine the show South Park and argue its satire combines bodily and scatological humour with more traditional satirical techniques to produce a comedy that ridicules contemporary issues by reducing complex politics to the most basic and crass condition possible. This is defined in a Bakhtinian sense of the body grotesque, a social inversion through reference to the common bodily functions of all human beings.     

Enhancing knowledge exchange and combination through HR practices: reflexivity as a translation process

Knowledge‐intensive firms need to encourage their employees to engage in knowledge exchange and combination (KEC) so as to create the new knowledge that is core to their success. HRM has the potential to play a key role in encouraging KEC, but relatively little is known about the micro‐processes through which HRM and KEC are linked. Based on a sample of 498 knowledge workers in 14 knowledge‐intensive firms in the pharmaceutical and information and communications technology sectors in Ireland and the UK, this study focuses on the knowledge workers themselves and their perceptions of how HR practices influence KEC. In so doing, we drill down into the micro‐foundations of the proposed linkages between HRM and knowledge creation, proffering reflexivity as a translation process in understanding these linkages.     

The Relative Effect of Property Type and Country Factors in Reduction of Risk of Internationally Diversified Real Estate Portfolios

We examine and test the merits of diversifying portfolios of real estate securities internationally and across property types. Our analysis covers the period January 1990 through July 2005. Using data from the Global Property Research GPR 250 Property Securities Index, which has monthly prices for five property type indexes in 21 countries, we decompose country and property type sources of variation in real estate security returns. We find that property type effects are smaller than country effects. Property type specialization explains only 6% of the variance of national real estate securities index returns. Because property type effects are so small, country diversification is a more effective tool for achieving risk reduction than property type diversification. In addition, we find evidence that the relative importance of country effects is decreasing while that of industry effects is increasing. However, country effects continue to dominate property type effects.     

A Dynamic-Programming Approach to Multiperiod Asset Allocation

Academicians and practitioners recently have focused a great deal of attention on the issue of retirement asset allocation. However, research on the academic side typically has assumed a static allocation of a fixed amount over the investor's lifetime, while the advice on the practitioner side has been largely ad hoc in nature. Moreover, both academics and practitioners often fail to link allocations to the individual's attitude toward risk. This paper uses several performance measures that incorporate the individual's aversion to risk and finds the allocations in the year before retirement that maximize the expected value of those performance measures. It then uses a dynamic programming procedure to roll back one year at a time to determine optimal allocations for previous years as well. We find that the traditional advice that young investors should invest more heavily in equity (with a gradual shift to more debt as they near retirement) indeed is correct, and in fact the optimal equity allocation is even higher than commonly suggested. Deviations of the growth in an individual's income from a long-term national average did not seem to significantly affect the optimal allocations. The optimal allocations, however, vary widely as a function of (1) investor attitudes toward risk and (2) accumulated savings to date. These results suggest greater care should be taken to assess and incorporate these factors into the asset-allocation decision.     

Property Tax Reform in Indonesia: Applying A Collection-Led Implementation Strategy∗

As part of its comprehensive 1984 tax reform, the government of Indonesia undertook a radical overhaul of the property tax system. The reform was carried out in two stages. The first entailed a major revision of the legal structure during which seven land-related taxes were replaced with a single Land and Building Tax in 1986. The second stage involved a major restructuring of the tax administration and its procedures. In addition to reorganising the tax department, the government adopted a collection-led implementation strategy for its reform activities and introduced a number of innovative procedures for property tax collection and enforcement, property information collection and management, and property valuation and assessment. This paper provides an analysis of that reform effort.