Erratum to: Exploring Factors Affecting Digital Piracy Using the Norm Activation and UTAUT Models: The Role of National Culture

The model emphasizes the ethical dynamics of compassion in hospitality settings by suggesting that under an organizational ethical climate, the hotel staff will be more morally aware of peers’ pain and suffering, and motivated to participate in delivering compassion. Based on the positive psychology focus on compassion as individual states and traits supporting interpersonal dealings, the paper operationalizes compassion based on four individual factors involved in the compassionate process: (a) empathic concern, or an other-oriented emotional response elicited by and congruent with the perceived welfare of a person in need; (b) mindfulness, a state of consciousness in which attention is focused on present-moment phenomena occurring both externally and internally; (c) kindness, or understanding the pain or suffering of others; and (d) common humanity, or seeing others’ experiences as part of the larger human experience. Data were collected from 280 employees at ten hotels in the Canary Islands (Spain). With the exception of self-interest, results of multiple linear regressions demonstrate that each of the six interpreted factors of ethical climate has substantive effects on any of the studied elements of staff compassion. The egoistic-related and principle-related climate factors generated a more consistent and intense compassionate reaction, suggesting that the staff is moved to act out of compassion either to assure that the team succeeds or to support each other out of moral obligation.     

Barriers to Entry and Competitive Behavior: Evidence from Reforms of Cable Franchising Regulations

Between 2005 and 2008, nineteen of the fifty states of the U.S. reformed the franchising process for cable television, significantly easing entry into local markets. Using a difference‐in‐differences approach that exploits the staggered introduction of reforms, we find that prices for ‘Basic’ service declined systematically by about 5.5 to 6.8 per cent following the reforms, but we find no statistically significant effect on average price for the more popular ‘Expanded Basic’ service. We also find that the reforms led to increased actual entry in reformed states, by about 11.6% relative to non‐reformed states. Our analysis shows that the decline in price for ‘Basic’ service holds for markets that did not experience actual entry, consistent with limit pricing by incumbents. To control for potential state‐level shocks correlated with the reforms, we undertake a sample‐split test that finds larger declines in prices for both ‘Basic’ and ‘Expanded Basic’ services in local markets which faced a greater threat of entry (because they were close to a prominent second entrant). Our results are consistent with limit pricing models that predict incumbents respond to increased threat of entry, and suggest that the reforms facilitated entry and modestly benefited consumers in reformed states.     

A class of non binary unequally replicatedE-optimal designs

In a situation where the given set of parameters (b, k andv) precludes the existence of any known optimal block designs, but an optimal block design is known to exist with parametersb, k andv*>v, a new design is shown to be useful. This (b, k, v) design is obtained from the (b, k, v*) optimal design by collapsing the classes of a suitable paritition of the treatment set (of the latter design) to treatments (of the former). We call the new design a quotient of the original design. Although the quotient is non binary and unequally replicated, it turns out to beE-optimal within the class of all proper and connected designs withb, k andv, provided the replication number of the optimal design we start with is not too large.     

Second chance offers in auctions

This paper examines situations in which a seller might make a second chance (take-it-or-leave-it) offer to a non-winning bidder at a price equal to their bid at auction. This study is motivated by the take-it-or-leave-it second chance offer rules used by eBay and a number of state procurement agencies. Equilibrium bidder behavior is determined for IPV sealed bid first price, second price, English, and Vickrey auctions when a second chance offer will be made with an exogenous probability $p$ . In all but the Vickrey auction (which elicits the dominant strategy of bidding one’s value) equilibrium bids are lower than if there were no possibility of a second chance offer and higher than if a second chance offer will be made for certain. Further, the possibility of a second chance offer erodes the strategic equivalence between second price bids and English auction drop out levels. If bidders are risk averse (with CRRA preferences), this difference leads to expected revenue dominance of the second price over the English auction, both of which dominate the Vickrey auction. The first price auction is also shown to revenue dominate the Vickrey auction, and moreover, numerical results and intuition from existing literature suggest that the first price auction revenue dominates the second price auction.     

Commitment and excess capacity with licensing: an old debate with a new look

The theoretical literature demonstrates that excess capacity is not an equilibrium phenomenon if each firm’s marginal revenue decreases with the competitor’s output. We show that such a conclusion can be overturned in the presence of technology licensing. We show that in the presence of technology licensing, a firm may hold excess capacity because it increases the benefit from technology licensing.     

Economics, Psychology, and Social Dynamics of Consumer Bidding in Auctions

With increasing numbers of consumers in auction marketplaces, we highlight some recent approaches that bring additional economic, social, and psychological factors to bear on existing economic theory to better understand and explain consumers' behavior in auctions. We also highlight specific research streams that could contribute towards enriching existing economic models of bidding behavior in emerging market mechanisms. This paper is based on the special session at the 6th Triennial Invitational Choice Symposium, University of Colorado Boulder, June 2004 (co-chaired by the first two authors).     

The Real Exchange Rate in Small, Open, Developed Economies: Evidence from Cointegration Analysis

We examine the effects of the terms of trade and the expected real interest rate differential on the real exchange rate in small, open, developed economies. We employ cointegration analysis to search for long-term linkages. We find that while both the terms of trade and the expected real interest rate differentials affect the real exchange rate in the long run, the role of the terms of trade generally proves more consistent. The speed of adjustment for the expected real interest rate differential in the error-correction model, however, is quantitatively larger than it is for the terms of trade.     

Filtering and identification of Heston's stochastic volatility model and its market risk

We study the filtering problem for the stochastic volatility model of Heston by using the nonlinear estimation theory. To solve the estimation problem for the stochastic volatility process, we use the random time change method. The derived basic equation for the filtering is the so-called Zakai equation and its numerically realized algorithm is proposed with the aid of the splitting-up method. Regarding the European call option problem, the identification of the market price of the volatility risk is also studied. Some numerical simulation studies are demonstrated to show the advantage of the proposed method.