VALUING REDUCED RISKS TO CHILDREN: THE CASE OF BICYCLE SAFETY HELMETS

The protection of children's health has recently become a mandated priority for federal policy makers. To assess many of the regulations that affect children's health, policy makers need estimates of the monetary value of reducing mortality risks to children. Although the economics literature has provided many estimates of the value of statistical life (VSL) for adult populations, it has provided none for school age children. This article studies the market for bicycle safety helmets and estimates for the first time a separate but comparable VSL for children and adults. We derive three estimates of VSL for each of three age categories (5 to 9, 10 to 14, and 20 to 59) that range from $1.1 to $4.0 million. In all cases, estimates for adults are highest, followed by estimates for the youngest children.     

Consumers' choice among peer‐to‐peer sharing platforms: The other side of the coin

Many peer‐to‐peer sharing platforms are transforming their business model from sharing for free to renting with or without in‐person interactions. How will these changes affect consumers’ participation in peer‐to‐peer sharing of personal items? The work studies consumers’ choice among three business models that vary on two dimensions: “free versus renting” and “with or without in‐person interactions.” The novelty is to consider that consumers’ choice can be driven by their perceptions of relationships among peers, which are shaped by the business models of sharing platforms. Perceptions of communal sharing (CS) relationships among peers are found to differ across business models and to predict consumers’ choice among the platforms above and beyond the economic and social benefits that consumers seek. Interestingly, perceptions of CS are not only found to explain the choice of a sharing for the free business model over the two others, but also the choice of renting with in‐person interactions over renting without in‐person interactions. For managers of peer‐to‐peer sharing platforms, this means that renting does not make sharing completely similar to traditional market exchanges as long as in‐person interactions are involved. For scholars, this calls for more work on the factors that bring about perceptions of CS.     

Third-Party Certification,Sponsorship, and Consumers’ Ecolabel Use

While prior ecolabel research suggests that consumers’ trust of ecolabel sponsors is associated with their purchase of ecolabeled products, we know little about how third-party certification might relate to consumer purchases when trust varies. Drawing on cognitive theory and a stratified random sample of more than 1200 consumers, we assess how third-party certification relates to consumers’ use of ecolabels across different program sponsors. We find that consumers’ trust of government and environmental NGOs to provide credible environmental information encourages consumers’ use of ecolabels sponsored by these entities, and consumers do not differentiate between certified versus uncertified ecolabels in the presence of trust. By contrast, consumers’ distrust of private business to provide credible environmental information discourages their use of business association-sponsored ecolabels. However, these ecolabels may be able to overcome consumer distrust if their sponsors certify the ecolabels using third-party auditors. These findings are important to sponsors who wish develop ecolabels that are more credible to consumers, and thus encourage more widespread ecolabel use.     

What if something unexpected happens to my brand? Spillover effects from positive and negative events in a co‐branding partnership

Brands sometimes enter into co‐branding agreements and major events can occur to one of the brands which can have either negative or positive consequences for the brands involved in the partnership. The current study investigates as yet unanswered research questions regarding whether and how positive and negative events happening to one brand in a co‐branding partnership affect the brand equities of the other brands in the partnership. The authors provide and test a new integrated attribution‐diagnosticity framework to explain the process that underlies the magnitude of these spillover effects. Findings show that while positive and negative event‐related spillover effects occur between the co‐brand and both parent brands, they were surprisingly absent between the parent brands. Further, the (a)symmetry of parent brand equity before the event influences the magnitude of event‐related spillover the parent brands receive from the co‐brand. Theoretical and practical implications of these findings are discussed.     

Lessons learned from Brazilian multinationals’ internationalization strategies

Internationalization of emerging market multinationals is a recent phenomenon gaining importance in the global economy. This foreign expansion of a new breed of companies has challenged established theories and practices in the field of international business (Cuervo-Cazurra, 2007). This article addresses the issue of whether or not there is something to learn from these emerging market companies and their foreign expansion. Focusing on the international trajectories of four Brazilian multinationals (i.e., Odebrecht, Embraer, Stefanini, and Marcopolo), this study analyzes their strategies and managerial processes during and after the recent economic crisis with regards to internationalization. Our qualitative fieldwork suggests that the trajectories of these Brazilian multinationals are quite unstructured and evolve as a reaction to the opportunities they face in international markets. It seems all four companies in our sample shared a strong entrepreneurial spirit and a high motivation to expand their international operations despite the crisis and the obstacles they faced. Our findings and suggestions in terms of lessons learned should provide valuable implications for multinational managers from other emerging markets by providing a better understanding of how Brazilian multinationals expand internationally, deal with economic crisis, and manage relationships with local and foreign institutions.     

Assessing the Role of e-Marketing in Contemporary Marketing Practice

Using a sample of 149 firms from the UK and New Zealand, we extend previous research on the nature of contemporary marketing practices by Brodie et al. (1997) to examine the practice of e-Marketing in relation to other aspects of marketing. Analysis reveals four combinations of marketing practice. While one third of firms emphasize either a Traditional Transactional or Traditional Relational approach to their markets, another third practice e-Marketing in combination with Transaction and Database Marketing, and a final third integrate all of Transaction, Database, Interaction, Network and e-Marketing. The findings show that for most firms, the level of e-Marketing practice reflects the extent to which information technology plays either a reinforcing, enhancing or transforming role in the organisation.     

The impact of promotions on consumer choices and preferences in out-of-stock situations

Out-of-stock is a prevalent problem in retailing, particularly for promoted products. This research analyzes customers' substitution decisions in out-of-stock situations by accounting for the specific impact of promotions. The results of two studies demonstrate that substitution patterns are context-dependent and change contingent on the relative positions of the promoted and the respective unavailable product. Specifically, preferences shift according to a reversed similarity effect, which is, however, reduced for stock-outs of promoted items. If a similar substitute is on sale, the effect is increased. For promoted dissimilar substitutes, the effect is offset by the simultaneous occurrence of an attraction effect. The results lead to important theoretical and managerial implications.     

PORTFOLIO OPTIMIZATION WITH JUMPS AND UNOBSERVABLE INTENSITY PROCESS

We consider a financial market with one bond and one stock. The dynamics of the stock price process allow jumps which occur according to a Markov-modulated Poisson process. We assume that there is an investor who is only able to observe the stock price process and not the driving Markov chain. The investor's aim is to maximize the expected utility of terminal wealth. Using a classical result from filter theory it is possible to reduce this problem with partial observation to one with complete observation. With the help of a generalized Hamilton–Jacobi–Bellman equation where we replace the derivative by Clarke's generalized gradient, we identify an optimal portfolio strategy. Finally, we discuss some special cases of this model and prove several properties of the optimal portfolio strategy. In particular, we derive bounds and discuss the influence of uncertainty on the optimal portfolio strategy.     

Hedging under model misspecification: All risk factors are equal,but some are more equal than others …

It is often difficult to distinguish among different option pricing models that consider stochastic volatility and/or jumps based on a cross‐section of European option prices. This can result in model misspecification. We analyze the hedging error induced by model misspecification and show that it can be economically significant in the cases of a delta hedge, a minimum‐variance hedge, and a delta‐vega hedge. Furthermore, we explain the surprisingly good performance of a simple ad‐hoc Black‐Scholes hedge. We compare realized hedging errors (an incorrect hedge model is applied) and anticipated hedging errors (the hedge model is the true one) and find that there are substantial differences between the two distributions, particularly depending on whether stochastic volatility is included in the hedge model. Therefore, hedging errors can be useful for identifying model misspecification. Furthermore, model risk has severe implications for risk measurement and can lead to a significant misestimation, specifically underestimation, of the risk to which a hedged position is exposed. © 2011 Wiley Periodicals, Inc. Jrl Fut Mark     

What's Left for ‘Social Europe’? Brexit and Transnational Labour Market Regulation in the UK-1 and the EU-27

The paper examines UK government positions on the regulation of transnational labour in the context of Brexit. Through an analysis of EU regulations on posted workers – the practice whereby a company based in one EU member state sends workers to carry out a service in another EU member state – the paper argues that the UK has consistently advocated further liberalisation of transnational labour markets in EU level decision-making, a position consistent with promoting increasingly ‘flexible’ labour markets at home. Brexit marks a turning point. Demands from British workers for stronger protection against liberalising pressure help explain the UK's recent shift towards relaxing its opposition to ‘market-correcting’ EU initiatives like the revised posted worker directive. Brexit provides a window of opportunity for the revitalisation of ‘Social Europe’ in the EU-27, without a longstanding veto player at the bargaining table, but one more likely focused more on upholding national labour protections than initiating new supranational policies.