Additive and Multiplicative Uncertainty Revisited: What Explains the Contrasting Biases?

above the certainty level while for additive uncertainty the price should be lower than the certainty level. This note gives an intuitive explanation for the result after first presenting a parsimonious review of the two models. We also discuss which, if either, of the two models is more realistic. Received December 14, 2001; revised version received July 16, 2002 Published online: April 30, 2003 We thank referees for helpful comments. Ciaran Driver would like to acknowledge the research facilities from ANU, Canberra for their help in writing this paper.     

Exploring the future for pensions pillarisation

The pensions pillarisation agenda envisages a reduction in the role of social insurance while simultaneously advocating the parallel expansion of fully funded private sector, occupational and personal retirement contingencies. Widespread perception of looming state failure in the field of pensions delivery highlights the inherent limitations of current pension delivery arrangements. However, moves to de-emphasise the provision afforded by, predominantly, monopillar state-mandated pension systems by expanding private privision represent short-term palliative responses to deep rooted structural and demographic problems. Multipillar systems appear no more capable of guaranteeing system funding in the face of demographic ageing and structural unemployment than existing monopillar systems. Moreover, a diminished role for social insurance will leave the low paid and unemployed significantly more vulnerable in old age. Consequently, this paper argues for a pension reform agenda which, in terms of levels of income substitution, will secure an adequate social insurance element into the future.     

UNIT MANAGEMENT BUYOUTS, STOCKHOLDER WEALTH, AND SELLING FIRMS' CHARACTERISTICS

Previous research on unit management buyouts, UMBs, has shown that selling firms benefit from the selloff transaction. The current research demonstrates that when the selling firm has either poor liquidity or poor earnings, selling firm shareholders do not benefit as much. We hypothesize that the unit managers have knowledge about the selling firm's difficulties so they do not pay as large a premium for the assets. Since the unit managers technically are employed by the selling firm shareholders, their bargaining to achieve a better price is an agency cost. Finally, selloff frequency does not affect seller abnormal returns.     

High school athletics and the wages of black males

This article examines the effects of high school athletic participation on the future wages of black males. Our evidence suggests that former black male athletes receive significantly greater wages than their otherwise comparable counterparts. Data from the National Longitudinal Survey of Youth was used for the analysis and allows for comparisons of the athlete premium to be made at different points in time. Both the human capital and signaling models are discussed. There appears to be a once and for all enhancement to human capital that accrues to black males who participated in high school athletics. The article adds to the literature on determinants of black male wages and on the earnings effects of athletic participation.