Value versus Glamour

The fragility of the CAPM has led to a resurgence of research that frequently uses trading strategies based on sorting procedures to uncover relations between firm characteristics (such as “value” or “glamour”) and equity returns. We examine the propensity of these strategies to generate statistically and economically significant profits due to our familiarity with the data. Under plausible assumptions, data snooping can account for up to 50 percent of the in‐sample relations between firm characteristics and returns uncovered using single (one‐way) sorts. The biases can be much larger if we simultaneously condition returns on two (or more) characteristics.     

The Envelope Theorem and Comparative Statics of Nash Equilibria

The Envelope Theorem for Nash equilibria shows that the strategic reaction of the other players in the game is important for determining how parameter perturbations affect a given player's indirect objective function. The fundamental comparative statics matrix of Nash equilibria for theithplayer in anN-player static game includes the equilibrium response of the otherN−1players in the game to the parameter perturbation and is symmetric positive semidefinite subject to constraint. This result is fundamental in that it holds for all sufficiently smooth Nash equilibria and is independent of any curvature or stability assumptions imposed on the game.Journal of Economic LiteratureClassification Numbers: C72, C61.     

Ethics in business and administration: An international and historical perspective

This is a study of ethical and moral behavior, or perhaps unethical behavior, in two different societies. One society, contemporary Australia and in particular the state of Western Australia, is currently undergoing an exhaustive Royal Commission into the shenanigans of a number of well-known business men and former leading politicians who seem to have been playing fast and loose with large amounts of other peoples' money. While this was initially the major focus of the paper, a secondary focus developed based on the interest shown in acquiring an historical background by a group of business policy students. The opportunity to acquire an appreciation of historical events and in particular, the development of a sense of history seems to be lacking in the curricula of modern day business students. The secondary focus of the paper therefore illustrated that malfeasance, misfeasance and other forms of malpractice in business and administration were just as common in Greco-Roman times as today. In this context, reference has been made to a selection of the writings of some of the more well-known writers of this period. The paper ends on a nonpositive note, raising the (rhetorical) question, that if, after two thousand years people are still continuing to engage in sharp business practices whenever the occasion arises is there any point in developing and offering courses in moral behavior and business ethics?     

“Following” or “attracting” the customer? Japanese Banking FDI in Europe

Using firm-level Japanese FDI data on investment into 18 European countries between 1970–2000 in all industries (banking, manufacturing, wholesale/retail distribution, and business services), this study examines if the “follow the customer” (FTC) hypothesis holds for firm-level data. The results suggest that banks do follow their customers into a foreign market, as part of a larger strategy that goes beyond the FTC theory. The firm level data show that the majority of FDI into a host country occurs after the foreign bank has established operations. Policy implications of this finding include the suggestion that host economies liberalize their financial sector early in an effort to attract banking FDI which then will attract non-banking FDI rather than the reverse.     

Alkoholabhängigkeit und Public Health — Soziale und arbeitsmedizinische Aspekte

On the basis of epidemiological estimations the number of alcohol addicts in Germany is estimated at 1.6 million, the number of patients abusing alcoholic drinks at 2.7 million. The diagnosis is often difficult due to aspersion and adulteration tendencies by the affected persons. Particularly psychosocial impairments are crucial for the diagnosis besides an increased quantity of drinking and alcohol related somatic and neurological consequential damages. Different questionnaire tests and clinical-chemical parameters such as GGT and CDT can relieve the diagnosis. Impairments of social environment and industrial world are substantial. The overall consequential damages by alcoholism are estimated at 20 billion € per annum. In this regard indirect costs of alcohol associated diseases are higher than direct costs. Alcohol addiction is often diagnosed at a rather late stage. However, at the beginning of an adequate therapy prognoses are often better than expected. Most of the withdrawal therapies are still conducted at a hospital. Abstinence rates of more than 40 % seem to be achievable. Furthermore a short survey of success rates of ambulant and stationary therapies is given.     

LAND MARKETS AND THE EFFECT OF REGULATION ON FORMAL-SECTOR DEVELOPMENT IN URBAN INDONESIA

Until recently, urban land and housing markets in Indonesia seemed to function well. Informal-sector development provided low-income housing affordably. Through government programs, formal-sector developers could build housing for all but the poor. Since 1989, however, daily conversation pictures land speculation as rampant and formal-sector housing as rising beyond the means of the middle class. Newspapers carry stories of conflicts between small landowners and large developers with government officials in between. This article investigates this situation by addressing two related questions: are urban land prices rising “too fast?”; how do land regulations and development practices affect costs, and who pays these costs? The article includes quantitative estimates of urban land prices, changes in urban land supply, movement of land through the permitting process, and the effect of development regulations on costs. Data come from a literature survey and interviews of some of the largest formal-sector developers in Indonesia. A principal finding concerns a development regulation called a “location permit” and the “social function” of land in Indonesian law. Although helpful as a means of assembling land in Indonesia's highly fragmented land markets, location permits allow formal-sector developers to hold land off the market and pay low prices to small landowners. Ultimately, the “social function” of land under Indonesian law holds down the price formal-sector developers pay for land, but not at the price at which they sell their product. The article concludes by proposing reforms to the regulatory process.     

Can segmentation improve predictive accuracy in conjoint analysis?

His interests focus on new product development, including both how marketing can achieve more accurate forecasts and communicate those forecasts credibly to other departments on the new product team. He received his Ph.D. from the University of Illinois, has taught at U.C. Berkeley and at M.I.T., and has published in such journals as theJournal of Marketing Research, Marketing Science, andInternational Journal of Forecasting.     

Scarcity effects on value: A quantitative review of the commodity theory literature

Commodity theory (Brock, 1968) deals with the psychological effects of scarcity. According to the theory, scarcity enhances the value (or desirability) of anything that can be possessed, is useful to its possessor, and is transferable from one person to another. This article introduces commodity theory to the marketing literature, reports a meta-analysis of studies designed to test the theory, and discusses the marketing implications of the theory along with suggestions for future marketing research.