The role of (non-)transparency in a currency crisis model

This paper extends the work by Morris and Shin (Am. Econom. Rev. 88 (1998) 587-597) where multiple equilibria in the self-fulfilling currency attack models can be reduced to a unique equilibrium when agents observe fundamentals privately with small errors. We find that under a more general specification with realistic parameters, noisy private observations are generally insufficient to prevent the multiplicity of equilibria. The pivotal role played by the transparency of fundamentals/policies in currency crisis is also examined. Surprisingly, transparency may trigger rather than eliminate currency crises when fundamentals are relatively healthy. Our results may be relevant to research in other coordination problems.     

Improving perishable product inventory management using goal programming

The multiple objectives of perishable product inventory management are examined in this paper. These objectives include: (1) satisfying demand by carrying sufficient inventories, (2) holding down inventory carrying costs, (3) keeping the amount of product spoilage (outdating) at an acceptable level, and (4) maintaining quality by using the product while it is still fresh, and (5) keeping the cost of rotation low. Some of the above objectives are in conflict. Thus, certain redistribution policies may help attain one or more of these objectives to a greater extent. Redistribution involves the transfer of the product from outlets where demand is low to outlets where demand is high. A goal programming model for solving redistribution problems is presented. An example is provided and sensitivity analysis is performed in order to determine when redistribution is advantageous. Applicability of the model is discussed.     

Determinants of the stock price reaction to leveraged buyouts

This paper investigates the determinants of leveraged buyout activity through the use of an abnormal return premium from the time of the first announcement through the final trading day. Consistent with the free. cash flow theory, firms with either high free cash flow or low Tobin’s q have higher abnormal returns. However, the returns to firms with both high free cash flow and low Tobin’s q are lower than firms with just one of these characteristics. Firms which substantially increase leverage and management buyouts with high insider ownership prior to the buyout have lower abnormal returns. Firms with lower risk, and therefore greater debt capacity, have higher abnormal returns.     

The economic costs of biological predation

This paper developes a bioeconomic model to analyse the economic losses from the reduced harvesting of prey species resulting from an increase in the stock of a natural predator. Examples of large mammals creating economic damage are whales and African elephants. The economic losses depend critically on the actual management of the prey stock, although the three measures we develop are equal when the stock is managed so as to maximize the sustained economic rent from the prey species. Predation losses are illustrated by the case of the Northeastern Atlantic Minke whale, where the estimate of the average predation cost per whale in 1991–1992 is between $US 1780 and $US 2370, using Norwegian cost and earnings data. A ten percent stock increase is estimated to cause a loss of almost $US 19 million to the fishers of the prey species. If half of this cost were assigned to Norway it would be equivalent to 2.8 and 6.7 percent of the gross profits of the Norwegian cod and herring fisheries, respectively.     

The international potential of traditional resource systems in marginal areas

Marginal areas of the world, including tropical highlands, tropical coastal zones, and arid lands, are problematical for development. They are ecologically special areas, often of vital consequence to the stability of more populated regions nearby. Commonly, their peoples are culturally distinct. To develop marginal areas it is suggested that “transformational” development may be appropriate. Transformational development recognizes the importance of equity and of working with existing resource systems already ecologically and culturally appropriate to the area. In marginal areas, a special application of transformational development could include incremental changes in existing systems and their connection to modern international systems so as to benefit the inhabitants of marginal areas and to supply commodities and goods demanded in the rest of the world. By rethinking ideas about resources, an exploratory framework for such transformation is examined. This framework uses the concept of “resource system”, a concept which might play an important part in the application of equitable future global development efforts.     

Inoculating consumers against deception: The influence of framing and executional style

This study examines conditions affecting consumer susceptibility to advertising deception and educational efforts designed to inoculate consumers against it. Results show that consumers are best able to detect deception when their frame of reference (cognitive or affective) is incongruent with the advertisement's executional style (attribute or emotional). Attempts to inoculate consumers against deception by providing factual brand comparisons have their strongest effect among consumers with an affective frame of reference and for emotionally charged ads.

---

Die Immunisierung von Konsumenten gegen werbliche Irreführung: Der Einflu der persönlichen Informationsausrichtung und des werblichen Argumentationsstils

Zusammenfassung Die Studie befa\t sich mit den Bedingungen werblicher Irreführung von Konsumenten und mit den Bemühungen der Verbrauchererziehung, Konsumenten durch vergleichende Warentestergebnisse gegen solche Irreführung zu immunisieren. Ihre Ergebnisse zeigen, da\ Konsumenten werbliche Irreführung am ehesten dann durchschauen, wenn ihre persönliche Informationsausrichtung (kognitiv oder affektiv) nicht mit dem werblichen Argumentationsstil (informativ oder emotional) übereinstimmt. Versuche, Konsumenten mit Hilfe vergleichender Warentest-Informationen gegen werbliche TÄuschung zu immunisieren, sind am wirkungsvollsten bei Konsumenten mit affektiver Informationsausrichtung und bei emotionshaltiger Werbung.

---

---

The authors wish to thank Joel Cohen and the Editors and reviewersof Journal of Consumer Policy for their valued suggestions, and Jill Joyce for assistance in data collection and analysis.     

Roads, Land Use, and Deforestation: A Spatial Model Applied to Belize

Rural roads promote economic development, but they also facilitatedeforestation. To explore this tradeoff, this article developsa spatially explicit model of land use and estimates probabilitiesof alternative land uses as a function of land characteristicsand distance to market using a multinomial logit specificationof this model. Controls are incorporated for the endogeneityof road placement. The model is applied to data for southern Belize, an area experiencingrapid expansion of both subsistence and commercial agriculture,using geographic information system (GIS) techniques to selectsample points at 1-kilometer intervals. Market access, landquality, and tenure status affect the probability of agriculturalland use synergistically, having differential effects on thelikelihood of commercial versus semisubsistence farming. Theresults suggest that road building in areas with agriculturallypoor soils and low population densities may be a "lose-lose"proposition, causing habitat fragmentation and providing loweconomic returns.     

Risk and Return to Housing, Tenure Choice and the Value of Housing in an Asset Pricing Context

Homeowners do not diversify their risky home equity because of fixed costs of issuing securities and information costs. An asset pricing model is developed for homeowners with the undiversifiable home equity asset. Homeowner value and house value to diversified landlords are compared, and a tenure choice equation is developed. We demonstrate the existence of a rational expectations equilibrium under appropriate conditions.     

伦敦商学院财务管理需要变革了

过去20年中,各国央行在抑制通胀方面几乎全面告捷,这使得许多政策制定者以为,他们几乎彻底解决了高通胀问题。正如很多定量分析和调查数据所显示的那样,市场参与者们已经认可了这个故事。但是,中央银行真的已经消灭通胀了吗?     

Technology and Rights

What do we know about technology and rights? This article provides a fairly comprehensive overview of current issues regarding this topic. We explore and analyse a wide spectrum of rights that are challenged in this current era of technological convergence. We use the United States Bill of Rights as an example of the vulnerability of legal protections for rights against particular political and technological changes in this post 9-11 climate. New streams of rights acting as a safeguard against further incursions of technology into civil liberties are explored. We also address intellectual property rights and international trends in copyright, patent and trademark laws. We question whether these issues of technology and rights have a place in current technological literacy scenarios.