Promotional messages in multichannel banking: Attractive or annoying?

Financial service providers possess a great deal of information about their customers. Customer information is used to serve customers and deliver the right messages to the right customer groups. Owing to the nature of financial services – that is, the need for credibility, long-term commitment and involvement of sensitive personal information – the planning and implementation of suitable marketing is extremely important. Financial services are offered through multiple channels, but electronic channels have increased in importance both for customer acquisition and retention purposes. In addition, electronic channels offer personalization possibilities that did not exist before. In this study, we examine, with the help of electronic focus group interviews, the kind of channels customers prefer when promotional messages include different types of personalization. In addition, the acceptance of promotional messages in the online banking context is explored. The results indicate that the channel preferences of customers diverge depending on the type of personalization used in the message. Furthermore, based on the opinions of customers concerning several authentic online banners, a personalization matrix was developed. The findings show that preference-matching personalization with informative content is accepted by the majority of customers. The article offers financial managers new perspectives on bank marketing in general, and online bank marketing in particular.     

Design of reforms with time‐inconsistent voters

Widespread agreement that a political reform is necessary is no guarantee that it is actually undertaken in a timely manner. There is often a delay before action is taken and reform packages that would be most efficient to implement all at once are often done only gradually. We propose a theoretical model explaining this behavior and show that when voters have present‐biased, time‐inconsistent preferences, gradualism can arise in equilibrium and be welfare‐enhancing. This is because without the possibility for gradualism, time‐inconsistent voters would delay implementing the reform even more. Using a citizen candidate model, we allow the agenda setter, who decides which reform schedule to put to vote, to be endogenously determined. We show that voters who are aware of their own time inconsistency can use the election of the agenda setter as a commitment device and appoint an agent who is more patient than the median voter in order to avoid full procrastination and to achieve efficiency‐maximizing gradualism.     

Profession and residency matter: Farmers' preferences for farmland price regulation in Germany

Local farmers' preferences for farmland price regulations in competitive markets have not been studied systematically. We investigate farmers' preferences in Germany, where recent price increases have driven calls for regulatory changes. The results of an online vignette experiment show that farmers prefer stricter regulation against the admission of non-local (but even more so of non-farmer) land buyers. Our analysis also shows that local farmers' preferences are motivated primarily by self-interest rather than adherence to principles. We conclude that most farmers prefer price regulations that consider their particular concerns about increasing competition in Germany.     

Underestimation of probabilities modifications: characterization and economic implications

The aim of this paper is to propose a behavioral characterization of individuals who underestimate probabilities modifications and to characterize this behavior in the standard preferences representation models under risk (expected utility, dual theory, rank dependent utility theory and MaxMin expected utility). Our main results are the following. Underreaction to probabilities modifications is in general independent from standard risk aversion and prudence. In models involving probabilities transformation functions, it is characterized by the slope of the probability transformation function. In the MaxMin expected utility model under risk, it is related to the weights of the maximal and minimal consequences in the preferences representation function. Considering a simple prevention decision, consisting in the reduction in the probability of a monetary loss, we show that individuals who underreact to probabilities modifications, invest less in prevention than individuals who objectively evaluate these modifications. Underreaction to probabilities modification is thus a possible explanation for low investment in prevention.     

Developing Moral Principles and Scenarios in the Light of Diversity: An Extension to the Multidimensional Ethics Scale

The purpose of this article is to develop the multidimensional ethics scale and moral scenarios that allow or even support diversity in managers’ reactions when measuring their moral decision-making. This means that we expand the multidimensional ethics scale with a female ethics dimension and take a critical look at the previously used scenarios in the light of diversity. Furthermore, we develop two new scenarios in order to better attain diversity in managers’ moral decision-making. Diversity is primarily looked at from a gender perspective, meaning that we pay attention to the femininities and masculinities of the scale items and scenarios. In addition, we use the concept of social desirability to assess diversity as we presume that social desirability works against diversity. Our article builds on previous research using the multidimensional ethics scale. First, we present a summary of the theoretical dimensions of the original multidimensional ethics scale and extend the scale with female ethics principles to foster diversity. Second, we analyse and assess previously used moral scenarios in order to see how they permit the expression of diversity. Third, we develop two new scenarios based on the interviews conducted with female managers.     

Legal and Institutional Determinants of Factoring in SMEs: Empirical Analysis across 25 European Countries

Weak protection of the rights of financiers intensifies agency problems in SME financing, inhibiting the optimal provision of credit necessary to grow and innovate. We use a survey data set of 4,348 SMEs from 25 European countries to analyze whether the use of factoring as a form of SME financing is less dependent on low quality of laws and institutions. We do so analyzing whether the use of factoring by SMEs differs across countries due to differences in the legal protection of creditors. Our findings indicate that firms operating in countries with legal environments that weakly protect the rights of creditors, with political instability or high enforcement costs, are more likely to use factoring. Managers of riskier and opaque companies operating in such inefficient environments can use the results of this study to better understand that there are suitable options to complement bank financing. Managers who seek loans can use the results to diversify their financing structure through the use of factoring. Since factoring can be used as a complement to bank loans or as a substitute for bank financing, it is important that policy makers take our results into account when revising policies concerning access to external financing.     

Makeshift markets and grassroots reponsibilization

ABSTRACT

Prior research has yielded insights into how market actors generate permanent, institutionalized structures. Investigate the emergence of a temporary marketplace, characterized by flexible socio-material constellations. We draw on ethnographic data collected within a refugee aid initiative, which assembled during the in 2015–2016, and was a response to the failure of institutional structures. We map out a process through which individuals are collectively moved to respond form social networks, and engage in market-making practices. We identify this process as the emergence of a “makeshift” market, and argue that it is a complementary form of institutional work, constituted by a grassroots process of responsibilization. We contribute to the literature on responsibilization and market dynamics by discussing (1) the emergence and decline of temporary and complementary marketplace structures and (2) mapping out a responsibilization process driven by moral outrage at the experiential level.     

Supervision without regulation: Discount limits at the Austro–Hungarian Bank, 1909–13

We show that nineteenth century central banks could use credit limits for discount loans as a means to enforce supervisory standards long before they had any formal regulatory powers. Drawing on novel microdata from the Austro–Hungarian Bank's archives, we document that credit limits were continuously monitored and that their size was contingent on counterparties’ liquidity and capital position. Counterparties had an economic motive to abide by informal prudential ‘rules of the game’: higher credit limits enabled counterparties to streamline their day-to-day liquidity management. We exploit the heterogeneous exposure of counterparties to an exogenous liquidity shock to evidence that the Bank relaxed credit limits during crises to fulfil its role as a lender of last resort.     

Vaccination under pessimistic expectations in clinical trials and immunization campaigns

We provide one of the first formalizations of a vaccination campaign in a decision-theoretic framework. We analyze a model where an ambiguity-averse individual must decide how much effort to invest into prevention in the context of a rampant disease. We study how ambiguity aversion affects the effort and the estimation of the vaccine efficacy in clinical trials and immunization campaigns. We find that the behaviors of individuals participating in a clinical trial differ from individuals not participating. Individuals who are more optimistic toward vaccination participate more in trials. Their behaviors and efforts are also affected. As a result, because vaccine efficacy depends on unobserved behaviors and efforts, the biological effect of the vaccine becomes difficult to evaluate. During the scale-up phase of a vaccination campaign, provided that vaccine efficacy is established, we show that vaccine hesitancy may still be rational.