The influence of product involvement on consumers’ interactive processes in interactive television

Based on the classical elaboration likelihood model, we develop an interactive communication behavior model and apply it to the interactive television environment. The model suggests a hypothesis about interactive information searches and how they are impacted by product involvement and hypotheses about how the category of an advertised product impacts the type of information sought. Testing these hypotheses empirically, we verify that product involvement influences the extent of interactive communication behavior, while the type of information being sought is a function of the advertised product category. Implications regarding advertising practice and research are suggested.     

Professor Ludwig M. Lachmann (1906-1990): Scholar, Teacher, and Austrian School Critic of Late Classical Formalism in Economics

Ludwig M. Lachmann was born in Berlin in 1906 and died in Johannesburg in 1990. For more than forty years, until his retirement in 1972, Lachmann established himself as a prominent South African economist and for a time served as head of the economics department at the University of Witwatersrand. From 1974 to 1987, he worked with Professor Israel Kirzner in New York City to give new shape and life to the older Austrian school of economics. Lachmann influenced a small army of modern Austrians to discard the elaborate formalisms of orthodox economics for a "radical subjectivism" that had its roots in the teachings of the founder of the Austrian school, Carl Menger. Here a small platoon of scholars offer their thoughts about Lachmann, his contributions to economic reasoning, and his eccentric but engaging character. First hand reports explain what their mentor taught and what his students took away. Lavoie makes the case that Lachmann's "radical subjectivism" took a rhetorical turn toward the end of Lachmann's career in New York City. In addition, Kirzner reports on his long and most productive relationship with Lachmann and provides additional insights about the seminal role of the Austrian Economics Seminar at New York University from 1985 to 1987 in giving shape to the modern Austrian revival. This article is the written version of a "Remembrance and Appreciation Session" held on June 28, 1999 at the History of Economics Society meeting at the University of North Carolina in Greensboro. It is one of an ongoing series that appears in the July issues of this journal.     

Consumers' Punishment and Rewarding Process via Purchasing Behavior

While there have been many studies of the ethical behavior ofmanagers, little research investigated the ethical beliefs andideologies of consumers. Moreover, even less is known about therelationship between consumer beliefs and ideology and purchasingbehavior. The present study investigates the extent to whichconsumers punish or reward what they perceive as either a firm'sethical or unethical behavior. The research model was tested onsamples of Israeli and Turkish respondents. The results indicatethat personal economic benefit, ideology (idealism versusrelativism), economic cost to others and locus of control explainconsumer reaction to ethical, purchasing dilemmas. Moralexpectations did not influence whether a consumer would purchasein a store offering an unethical proposition. Apparently,material gain, if large enough, outweighs one's moralpredisposition. Idealists were found to be less likely topurchase in an unethical store situation. The Turkish respondentswere more concerned with economic cost to others than the Israelirespondents, apparently owing to cultural differences between thetwo groups. Finally, those respondents having higher internallocus of control were found to be more ethical.     

Entrepreneurial inspiration

The Review of Austrian Economics - The following comments were presented at the Mont Pelerin Society Regional Meeting in Seoul, South Korea on May 9, 2017.     

The ethics of pure entrepreneurship: An Austrian economics perspective

The Review of Austrian Economics - This paper focuses on the justice of income distribution in a system of private property rights. Milton Friedman argued that the “ethical principle that...     

Some quasi-globally stable processes of price adjustment

In this paper, the existence of some quasi-globally stable processes of price adjustment in a perfectly competitive market, is proved. These processes are relative to a special class of “excess demand” vector fields satisfying regularity hypotheses and boundary conditions of classical type. Modifications of the above processes which, under different hypotheses, are still quasi-globally stable, are studied.     

Alternative estimation methods for two-regime models: A mathematical programming approach

This paper suggests mathematical programming methods for estimating the parameters of piecewise regression models. Maximum likelihood estimation results in a non-convex optimization problem which is not continuously differentiable, and might even become discontinuous. To solve these difficulties we suggest two classes of methods. The first one consists of ‘scanning methods’, which are combinatorial in nature and therefore adequate for problems limited in size. The second class consists of ‘smoothing (or approximation) methods’, which can be used for larger problems. While scanning methods always find the global solution in a finite number of steps, smoothing methods are only guaranteed to find a local optimum. The paper ends with an application of the methods to the determination of export prices.     

A note on the measurement of the slowdown in total factor productivity

Investigation of foreign exchange control generally focuses on the black market in currencies and the resultant welfare loss to the country under exchange control. But very little attempt has been made to formulate the internal income transfer from foreign exchange earners who choose not to resort to black market, to importers who receive the foreign exchange at less than free market rate. This paper quantifies such measures of income transfer as importer's cost savings, exporter's income transfer, and the transaction cost loss of the market. A case study is developed using the 1951–74 export figures of the state of Kerala in India, showing that the exchange-earning pure or net exporter pays a hidden subsidy to the exchange-consuming importer; and by extension, an exchange-earning agricultural region of a less developed country subsidizes the import-consuming industrial sector of that country.     

Differentiation and Synergies in Rural Tourism: Estimation and Simulation of the Israeli Market

This article applies a discrete-choice equilibrium model with product differentiation to study the rural tourism industry in Israel and to jointly estimate the effect of lodging and farm characteristics on consumer preferences and firms' costs. The model accounts for heterogeneity in tastes and technologies and allows for unobservable product characteristics. We find evidence for technological synergy in the joint production of agricultural goods and rural tourism services, but none in the demand. The differentiation in the industry is the major contributor to the price-cost margin, which averages 62%. An additional minor cause is government regulations, which restrict supply. Simulation results demonstrate the growth potential of the industry and show that the government can play an important role in catalyzing growth via investment subsidization, deregulation of supply and information distribution.