Sunspot Fluctuations in Two-sector Economies with Heterogeneous Agents

We study a two-sector model with heterogeneous agents and borrowing constraint on labor income. We show that the relative capital intensity difference across sectors is crucial for the conditions required to get indeterminacy and endogenous fluctuations. The main result shows that when the consumption good is sufficiently capital intensive, local indeterminacy arises while the elasticities of capital–labor substitution in both sectors are slightly greater than unity and the elasticity of the offer curve is low enough. Locally indeterminate equilibria are thus compatible with a low elasticity of intertemporal substitution in consumption and a low elasticity of the labor supply. As recently shown in empirical analysis, these conditions appear to be in accordance with macroeconomic evidences. We would like to thank R. Becker, J.P. Drugeon and an anonymous referee for useful comments and suggestions. The current version also benefited from a presentation at the conference “Public Economic Theory 04”, Beijing, August 2004.     

What drives the adoption and consumption of green hotel products and services? A systematic literature review of past achievement and future promises

The current study utilises the time-tested systematic literature review (SLR) method to identify and analyse 76 studies addressing the consumer adoption of green hotels. The results of the research profile analysis show that the literature on consumers' adoption and consumption of green hotel products and services is expanding and gaining more recognition from researchers working in Asian contexts, particularly China, Taiwan and India. Moreover, the qualitative thematic analysis yields four key themes, (a) consumer behaviour variables addressed, (b) antecedents and mediators of green hotel adoption, (c) moderators of the relationship and (d) methodological considerations, for which limitations and future research directions are identified accordingly. The main novelty of the study lies in the development of a unified framework of consumer adoption and consumption of green hotel products and services that calls for a multitheoretic examination of the issue. This review is among the first to consolidate the growing literature on consumer adoption and consumption of green hotel products and services.     

New combinations in old industries

The literature on long waves gives great emphasis to the process of the diffusion of new pervasive technologies that raise productivity and growth, first in the sectors that generate them, then in those sectors that progressively adopt them. This paper explores this process of diffusion, relying on an ongoing analysis of the diffusion of robotized, modular production process in the international tire industry. The analysis captures three key features of the diffusion process of the long wave. First, we look at the emergence of radical innovations in mature sectors through the adoption of pervasive technologies, i.e. robotics. Second, we see that the adoption of the new process goes hand in hand with the adoption of new organizational routines at the level of both design and manufacturing processes, modularity. Third, this study highlights the role played by key individuals—entrepreneurs—who develop new ways of doing business.     

Ascending auctions for multiple objects: the case for the Japanese design

Summary. We consider two ascending auctions for multiple objects, namely, an English and a Japanese auction, and derive a perfect Bayesian equilibrium of the Japanese auction by exploiting its strategic equivalence with the survival auction, which consists of a finite sequence of sealed-bid auctions. Thus an equilibrium of a continuous time game is derived by means of backward induction in finitely many steps. We then show that all equilibria of the Japanese auction induce equilibria of the English auction, but that many collusive or signaling equilibria of the English auction do not have a counterpart in the Japanese auction.Received: 2 September 2004, Revised: 20 April 2005, JEL Classification Numbers: C72, D44.Fabrizio Germano: Correspondence toWe are indebted to Philippe Jehiel for useful discussions and to Nicolas Vieille for suggestions in the proof of Proposition 2; we also thank seminar audiences in Athens, Basel, Beer-Sheva, Berlin, Brussels, Cambridge, Edinburgh, Exeter, Lausanne, Lisbon, London, Louvain-la-Neuve, Namur and Tel Aviv. Germano acknowledges financial support from Euopean Commission, TMR Network Grant ERBFMRXCT0055, “Cooperation and Information” as well from the Spanish Ministry of Science and Technology, Grants SEC2001-0792, SEJ2004-06319, and in form of a Ramon y Cajal Fellowship. Lovo is member of GREGHEC, unité CNRS, FRE-2810. The support of the Economic and Social Research Council (ESRC) is also gratefully acknowledged. The work was part of the programme of the ESRC Research for Economic Learning and Social Evolution.     

Local volatility under rough volatility

Several asymptotic results for the implied volatility generated by a rough volatility model have been obtained in recent years (notably in the small-maturity regime), providing a better understanding of the shapes of the volatility surface induced by rough volatility models, supporting their calibration power to SP500 option data. Rough volatility models also generate a local volatility surface, via the so-called Markovian projection of the stochastic volatility. We complement the existing results on implied volatility by studying the asymptotic behavior of the local volatility surface generated by a class of rough stochastic volatility models, encompassing the rough Bergomi model. Notably, we observe that the celebrated “1/2 skew rule” linking the short-term at-the-money skew of the implied volatility to the short-term at-the-money skew of the local volatility, a consequence of the celebrated “harmonic mean formula” of [Berestycki et al. (2002). Quantitative Finance, 2, 61–69], is replaced by a new rule: the ratio of the at-the-money implied and local volatility skews tends to the constant $1/(H+3/2)$ (as opposed to the constant 1/2), where H is the regularity index of the underlying instantaneous volatility process.