Beliefs regarding fundamental value and optimal investing

Standard optimal portfolio selection models take no account of the special information that active investors believe they possess. For example, active investors who believe they can place bounds on the price of a security will want to use that information when assessing risk and expected return in order to construct an optimal portfolio. In this paper, we use two continuous-time models to analyze how placing boundaries on the price of a stock affects assessed risk, expected returns, and the optimal holdings of an active investor, and how those vary as a function of the relation between the stock price and the boundaries. In particular, the optimal strategy takes significant long/short positions as the price nears its lower/upper boundary.     

Buyer‐Induced Exclusive Dealing

Large retailers may exercise buyer power in their interactions with manufacturers. This article explores the use of exclusive dealing arrangements by a monopoly retailer when purchasing a differentiated product from competing manufacturers. Interactions among the firms are modeled as a bargaining game. When consumers' brand preferences are weak and/or when one brand is preferred by a significant majority of consumers, it is more profitable for the retailer to negotiate an exclusive dealing arrangement with one of the manufacturers than to distribute both products. Also, it is more profitable for the retailer to induce exclusive dealing if the manufacturer of the excluded brand has a lot of bargaining power when negotiating with the retailer. If buyer‐induced exclusive dealing reduces the retail price of the exclusive brand in order to encourage “brand switching” by consumers who favor the excluded brand, the practice may increase consumer welfare and even total welfare.     

The behaviour of expected short-term real interest rates in the UK

The existence of persistent technical inefficiency offers the opportunity for a ‘free lunch’ not typically implied by the neoclassical theory of the firm. When external effects are related to the use of particular inputs, reduction of persistent technically inefficient levels of input use represents a means of reducing external impacts. An important example is found in agriculture where substantial environmental impacts are generated by particular inputs. Within this context, this paper considers the usefulness of data envelopment analysis (DEA) for estimation of potential input reductions and assessment of potential reductions of environmental impacts of agricultural inputs. An application for French cereal production provides estimates that indicate that substantial potential exists for reduction of input use and environmental impacts.     

Social Pressure at the Plate: Inequality Aversion,Status, and Mere Exposure

This paper uses professional baseball data to evaluate the impact of social pressures on subjective decisions made by officials. Umpires show tendencies consistent with both centrality bias and favoritism toward players with higher status in the league. Results also indicate that the odds of a strike are lower for batters in close proximity to the official throughout the game. Implications extend beyond sport to issues regarding closeness of contact in employee–manager relationships and pay and promotions decisions in the workplace. Given the persistent monitoring of officials in professional baseball, this phenomenon could be more prevalent in less scrutinized positions in other industries. Copyright © 2013 John Wiley & Sons, Ltd.     

Trade in High-Tech Services

This paper examines the size, scope, and potential implications of trade in high-tech services in the U.S. The results suggest that many service activities are tradable, tradable service activities tend to employ more educated workers and pay higher wages, and high-tech services account for a large share of service activities that are tradable. Service exporters are more prevalent in high-tech industries with larger establishments and higher wages. Within industries, service exporters tend to be larger, pay higher wages, and are more productive. Tradable service activities seem consistent with U.S. comparative advantage and, as a result, less likely to be vulnerable to offshoring. Consistent with this, recent employment growth in tradable service industries is not significantly different than employment growth in non-tradable service industries.     

Antitakeover provisions in corporate spin-offs

We analyze the relation between antitakeover provisions (ATPs) and the performance of spin-off firms. We find that firms protected by more ATPs before spin-offs have higher abnormal announcement returns and greater improvements in post-spin-off operating performance than firms with fewer ATPs. Further, firms that reduce the number of ATPs after spin-offs have greater improvements in operating performance than firms that do not reduce the number of ATPs. Finally, CEOs of pre-spin-off firms tend to retain more ATPs in parent firms and assign fewer ATPs to the spun-off units if they remain as the CEOs of the parents but not the spun-off units. Overall, our results indicate a positive relation between ATPs and the value gains to spin-offs.     

Exporting and Productivity in the USA

Exporting is often touted as a way to increase economic growth.This paper examines the interaction between exporting and productivitygrowth in US manufacturing. While exporting plants have substantiallyhigher productivity levels, there is no evidence that exportingincreases plant productivity growth rates. The higher productivityof exporters largely predates their entry into exporting. However,within the same industry, exporters do grow faster than non-exportersin terms of both shipments and employment. Exporting is associatedwith the reallocation of resources from less efficient to moreefficient plants. In the aggregate, these reallocation effectsare quite large, making up over 40 per cent of total factorproductivity growth in the manufacturing sector. Half of thisreallocation to more productive plants occurs within industriesand the direction of the reallocation is towards exporting plants.     

Managerial practices that enhance innovation

In high-innovation organizations, special funds earmarked for research and development are used to support experimental activities. A special committee accepts or rejects an innovators proposal and undertakes a feasibility study. The feasibility-study team uses a marketing orientation to determine if a real customer need exists and how it may best be met. By the time a proposal reaches the adoption stage, the advocate's original idea has been modified by input from study-group members. The project is given an adequate funding level and is monitored and audited on a regular basis. Finally, implementation takes place first on a small scale so that, in the event of failure, a minimum amount of resources will be lost.Essentially, successful innovation depends on a company's willingness to commit the necessary time, money, and leadership to research and development. In the simplest terms, the difference between high- and low-innovation organizations is that the latter are willing to follow up and follow through on behalf of new ideas.