What Do Bettors Want? Determinants of Pari‐Mutuel Betting Preference

A bstract .   This paper is an analysis of the demand for thoroughbred racetrack wagers, examining evidence that would support the existence of two types of bettors: the risk-averse informed bettor versus the uninformed bettor. Looking at 12 major racetracks over the fall of 2002, we undertake an empirical examination of the determinants of bettors' preferences for particular wagers on specific races. The goal is to try to determine what individual aspects of a race (conditions, surface, participants, etc.) will encourage increased wagering dollars. With the advent of simulcasting, the competition for the wagering dollar is fierce, as the bettor can choose from more than 100 races daily, each race offering numerous betting options. We find for most wagers that higher quality participants, larger and more competitive fields, and turf races increase betting volume while higher pari-mutuel takeout, poor track conditions, and other races run concurrently reduce volume. However, more competitive fields reduce betting volume in the show and trifecta pools. Optimal field size is determined to be between 10 and 12 betting interests. Overall, we find support for the existence of a significant share of risk-averse informed bettors.     

Do Casinos Cause Economic Growth?

A bstract .   Casino gambling is a popular form of entertainment and is purported to have positive effects on host economies. The industry surely affects local labor markets and tax revenues. However, there has been little evidence on the effects of casino gambling on state economic growth. This paper examines that relationship using Granger-causality analysis modified for use with panel data. Our results indicate that there is no Granger-causal relationship between real casino revenues and real per capita income at the state level. The results are based on annual data from 1991 to 2005. These findings contradict an earlier study that found that casino revenues Granger-cause economic growth, using quarterly data from 1991 to 1996. Possible explanations for the differences in short- and long-run effects are discussed.     

A real options perspective on entrepreneurial entry in the face of uncertainty

In this paper we develop and test theory regarding whether entrepreneurs contemplating starting a new venture account for the value of the option to defer the entry decision. While others have illuminated the theoretical applicability of real options theory to entrepreneurship, empirical evidence in this context is lacking. Consistent with predictions derived from real options theory, we find that high uncertainty in the target industry dissuades entry, and that the irreversibility of the entry decision moderates this relationship. Furthermore, we find that the irreversibility of the investment decision can be influenced by industry‐level, firm‐level and even individual‐level factors. Copyright © 2003 John Wiley & Sons, Ltd.     

Airbus versus Boeing revisited: international competition in the aircraft market

This paper examines international competition in the commercial aircraft industry. We estimate a discrete choice, differentiated products demand system for wide-body aircraft and examine the Airbus-Boeing rivalry under various assumptions on firm conduct. We then use this structure to evaluate two trade disputes between the United States and European Union. Our results suggest that aircraft prices increased by about 3.7% after the 1992 US-EU agreement on trade in civil aircraft that limits subsidies. This price hike is consistent with a 5% increase in firms' marginal costs after the subsidy cuts. We also simulate the impact of the future entry of the Airbus A-380 super-jumbo aircraft on the demand for other wide-bodied aircraft, notably the Boeing 747. We find that the A-380 could reduce the market share of the 747 by up to 14.8 percentage points in the long-range wide-body market segment (depending upon the discounts offered on the A-380), but would reduce the market for Airbus's existing wide-bodies by an even greater margin.     

The temporal nature of growth determinants in new bank foundings: implications for new venture research design

Several authors have suggested the founding period as a critical time in the development of a firm, arguing that the resource and decision choices made at this point have a substantive impact on the firm's future. Yet, historically, most studies have measured new venture choices considerably after the founding period. We suggest that the uniqueness of the founding event is important and test its validity through the examination of two implicit assertions. These implicit assertions are those of temporal stability and temporal locus of growth determinants.     

Value Congruence Awareness: Part 2. DNA Testing Sheds Light on Functionalism

Part 1 of this exploratory study demonstrated that for terminal, instrumental, and work values, supervisors could only accurately assess the extent to which their terminal values are congruent with their employees, whereas, employees could only accurately describe degrees of alignment with their supervisors' work values. Thus, supervisors appear to possess conscious awareness of the terminal values held by their employees and employees similarly possess conscious awareness of their supervisors' work values. Part 2 of the study examined what each of these two parties might do with their conscious knowledge concerning value congruence with the other member. Supervisor ratings and employee self-ratings concerning employee job performance, citizenship, climate fit, working relationship (LMX), and other issues, were correlated with supervisor terminal value congruence estimates and employee work value congruence estimates respectively. For supervisors, only one significant finding was noted, indicating a positive relationship between the supervisors' awareness of terminal value congruence with the employee and the supervisors' estimate of the employee's potential for future promotion. For employees, seven hypotheses received support demonstrating relationships between the employees' 0awareness of supervisor/employee work value congruence and self-ratings of work behaviours, citizenship behaviours, volunteerism behaviours, work climate behaviours, work climate attitudes, work climate organizational-wide attitudes, and the supervisor/employee working relationship. Implications for management and future research are discussed.     

Innovation, competition and the structure of local production networks: Initial findings from the Hertfordshire project

This paper reports the initial findings of an ESRC-funded study in Hertfordshire into how award-winning innovative firms organise their production arrangements. The study is a pilot project which was based on three initial operational assumptions: first, that innovation is not entirely an aspatial phenomenon; second, that modern production structures are taking new forms — variously described as post-Fordist, or flexible specialisation (flex-spec) — particularly in areas which are rich in commercial research and development (R&D) activities; and, finally, that as a consequence innovative firms in these areas commonly form production linkages with each other to create local production networks (LPNs).

The research was carried out in the county of Hertfordshire just to the north of Greater London. Hertfordshire was selected because, according to a number of measures, it is one of the key areas for R&D in the UK. On the basis of our initial, limited empirical sample of firms in Hertfordshire, a key finding of the research was that a significant majority of the innovative firms sampled — both large and small — were not actually organised in LPNs in any recognisable way and that local post-Fordist production was either extremely limited in its operation or, more commonly for most firms, was non-existent — instead, these firms normally acted as local, relatively free-standing entities which were much more likely to be in competition with other local firms, than form production linkages with them.     

Inflation Forecast Targeting: An Alternative Approach to Estimating the Inflation‐Output Variability Tradeoff

We suggest a new way of computing the inflation‐output variability tradeoff under inflation forecast targeting. Our approach is based on dynamic, stochastic simulations of the average inflation rate over a two‐year horizon using the moving average representation of a vector autoregressive (VAR) model. Using real‐time data over two samples, we estimate the inflation‐output variability tradeoff for the United States and show that it has shifted favorably over time. We analyze the policy interventions required to achieve target inflation in each sample and compare these interventions over time.     

International deflation risks under alternative macroeconomic policies

We use a version of the Global Projection Model covering the United States, Euro area and Japan to assess options for dealing with the looming risk of international deflation. The zero floor to interest rates constrains monetary policy. Confidence intervals, derived from stochastic simulations, indicate ranges of uncertainty. The results suggest a high probability of a declining price level for a couple of quarters in 2009. Suitable policy adaptations reduce the risk that this might turn into a prolonged, global deflation. These include: a price level path target for monetary policy, which would respond to previous, as well as expected, shortfalls from the desired inflation rate; a more stimulative fiscal policy; and an increase in the long-run target for inflation.