The choice of a monetary instrument in a small open economy: The case of Korea

Using a small macroeconometric model of Korea, this paper evaluates the correct choice of a monetary instrument (either the money stock or the interest rate), the optimal multiperiod policy, and the value of current information on some monetary varialbles.     

Versioning of information goods under the threat of piracy

The present study investigates the effects of piracy on the quality decisions of a firm that produces two versions of an information good: that is, one version for a consumer with a high willingness to pay and a second version for a consumer with a low willingness to pay. On the assumption that there is no quality difference between the original and the illegal copy and that the cost of the copy is constant across users, we show that the presence of piracy induces the firm to choose a lower level of quality of the former and a higher level of quality of the latter relative to decisions made in the absence of piracy. We also discuss policy implications concerning the socially optimal level of copyright protection.     

Consumer emotional intelligence and its effects on responses to transgressions

This research suggests that consumer emotional intelligence (CEI) is an important construct in explaining why some consumers react destructively to conflicts in consumer-brand relationships whereas others approach them constructively. The results of the study show that (1) when encountering transgressions in relationships with brands, consumers low in CEI are more likely to respond to transgressions destructively than those who are high in CEI; (2) the effects of CEI on destructive responses are greater if a transgression affects consumers’ self interests rather than society’s interests; and (3) low CEI consumers are more likely to attribute negative intentions to the company and are therefore more likely to respond destructively than high CEI consumers.     

Does Corporate Social Responsibility Matter in Asian Emerging Markets?

This study addresses the question whether corporate social responsibility (CSR) matters in Asian Emerging Markets. Based on CSR scores compiled by Credit Lyonnais Securities (Asia), we assess the CSR performance of major Asian firms over a period of 3 years, from 2001 to 2004. The results show that there is a positive and significant relation between CSR and market valuation among Asian firms. We further find that CSR is positively related to the market valuation of the subsequent year. More importantly, Asian firms are rewarded by the market for improving their CSR practice.     

Disutility and constrained quality choice in self-selection problems

This paper analyzes the self-selection problem in a monopoly market where (i) consumer types are characterized by both utility of service and disutility of interrupted service and (ii) qualities (reliabilities) are interdependent. We derive behavior of a profit-maximizing monopolist in offering self-selection menu of price and reliability and in choosing capacity investment. We further analyze welfare distortions of the monopolistic behavior. The major findings are: (i) depending on the magnitude of utility and disutility, either consumer type may end up with zero surplus, (ii) the possibility of inefficient production may lead to idle capacity, and (iii) depending on the consumer preference structure, the monopolist's investment is lower than, equal to, or higher than the socially optimal level.     

Efficiency characterizations in different DEA models

Relations of efficiency and non-efficiency for the same sets of DMUs (Decision Making Units) are developed for the Charnes, Cooper and Rhodes (CCR) and Barker, Charnes, Cooper (BCC) ratio models, as well as DEA Additive and Multiplicative Models. Surprisingly, additively efficient DMUs are not necessarily multiplicatively efficient. A geometric “stretching” phenomenon is identified for the latter case.     

Some statistical and DEA evaluations of relative efficiencies of public and private institutions of higher learning

This paper uses the Charnes, Cooper and Rhodes (CCR) ratio form of Data Envelopment Analysis (DEA) (1) to examine how DEA can be utilized in analyzing different aspects of production behavior of institutions of higher learning (IHLs) as an alternative to more traditional approaches such as econometric-regression models, and (2) to compare “specifically” relative efficiencies of public and private doctoral-granting universities in the U.S. and to analyze technical and scale efficiencies of those universities. The separation of doctoral-granting universities into universities with and without medical colleges represents a departure from preceding studies. This division proved very important in uncovering substantial differences in behavior between the two groups even when using the “statistical averaging” approaches that were customary in previous studies. For both groups, public universities proved more efficient than private universities when managerial and program inefficiencies are present in the data. When managerial inefficiencies are disentangled from the data and medical schools are not present, private universities have more efficient programs. However, their managers are less efficient users of program opportunities than are managers in public universities. Another portion of the current study dealt with returns-to-scale possibilities. These differed markedly (even on average) between IHLs with and without medical schools. Moreover, analyses by DEA showed marked ranges of variation for returns-to-scale possibilities for individual IHLs within each group. These possibilities have generally been concealed by the statistical averaging utilized in previous econometric studies. Further, their identification is beyond the ability of the usual types of one-at-a-time ratio and trend analyses.     

Directional Accuracy of Urban Consumers’ Inflation Forecasts in China

We evaluate the directional accuracy of inflation forecasts based on the survey data of urban savings account holders in China. By using a new market-timing test, we show that the urban consumers’ expectations of inflation are not a useful predictor of the overall consumer price index (CPI) and the urban household CPI (U-CPI) in China. However, after our in-depth analysis using the inflation rate of each category in the U-CPI basket, we find that the consumers’ forecasts are useful in predicting the movement of the residence component in the U-CPI basket since the third quarter of 2009.     

Stochastic frontier models with multiple time-varying individual effects

This paper proposes a flexible time-varying stochastic frontier model. Similarly to Lee and Schmidt [1993, In: Fried H, Lovell CAK, Schmidt S (eds) The measurement of productive efficiency: techniques and applications. Oxford University Press, Oxford], we assume that individual firms’ technical inefficiencies vary over time. However, the model, which we call the “multiple time-varying individual effects” model, is more general in that it allows multiple factors determining firm-specific time-varying technical inefficiencies. This allows the temporal pattern of inefficiency to vary over firms. The number of such factors can be consistently estimated. The model is applied to data on Indonesian rice farms, and the changes in the efficiency rankings of farms over time demonstrate the model’s flexibility.