Mr. Market's Mind: Finance's Hard Problem

The market as a mind is the implicit premise in any discussion on whether the market is rational or not. Still, its implications, in terms of ontology and epistemology, are hardly understood. In particular, this paper defines the market's version of the mind-body problem and labels it as finance's “hard” problem. Its denial by modern finance causes this dominant paradigm to fail in dealing with reality in general and to produce incomplete investment knowledge in particular. Finally, as part of facing up to this problem, this paper offers a glimpse at a practical approach which may enrich investment research.     

Accomplice Witnesses and Organized Crime: Theory and Evidence from Italy

We develop an agency model of organized crime accounting for the main trade‐offs involved in the introduction of an accomplice‐witness program. We characterize the optimal policy and identify its main determinants in a framework where public officials can be dishonest. Our predictions are tested by using data for Italy before and after the introduction of the 1991 accomplice‐witness program. As predicted by the model and the earlier antitrust literature, the program appears to have strengthened deterrence and enhanced prosecution. Moreover, consistent with a novel prediction of our theory, the evidence suggests that the program efficacy is affected by the judicial system efficiency.     

Seeing Without Looking: The Effects of Hemispheric Functioning on Memory for Brands in Computer Games

The authors hypothesize that the effectiveness of in-game advertising is influenced by two inborn traits, bisected hemispheric functioning and physiological arousal, that are at the core of human behavior. A 2 (preattentive processing type) × 2 (arousal level) between-subjects design was employed in both Experiment 1 (well-known brand placement) and Experiment 2 (lesser-known brand placement). The results from the two experiments reveal that people show better recognition memory for in-game ads when brand names are presented peripherally in the right visual field and brand images are embedded peripherally in the left visual field. In addition, people can remember more brand ads when they experience less arousal (Experiment 1). This effect, however, is attenuated when unfamiliar brands are placed in the game (Experiment 2). Implications are discussed for further investigation.     

How to estimate market concentration given grouped data

A novel method is proposed of estimating market concentration for the census case in which firms are grouped into size classes and all that is known about the firms in each category is their number and aggregate size. The formula arises as a way of applying an alternative expression for the concentration ratio based upon the original and first moment size distributions of firms. The semi-parametric technique, which includes a method of interval as well as point estimation, is derived, applied and validated using actual and simulated data. It is anticipated that the estimator will be of use in competition analysis as well as in academic research.     

家族企业的品牌长青术

家族企业的品牌管理不太为外界所熟知，但是，家族企业由于其独特的“家庭要素”的背景，在核心理念、客户关联、一致性、员工融入和锐意进取等各个方面都有突出的表现，而这些要素也恰好是全球领先品牌的五个核心特征。     

The use of visual warnings in social marketing: The case of tobacco

Despite strong interest on the part of tobacco health practitioners, the effect of graphic warnings inserted on cigarette packs is unclear on several levels. First, the most effective themes for such messages have not been clearly identified by researchers. Second, no research has identified the ideal combination of self-efficacy and fear appeal warnings that should be inserted on cigarette packs, according to Protection Motivation Model principles. The exploratory study we conducted with French consumers to test the effectiveness of new graphic warnings proposed by the European Union in 2004 clearly demonstrates that visual messages, as opposed to text warnings, are more effective. This study also enabled us to identify the most effective themes of the European set: health warnings and social messages. Regarding future public health applications, if fear appeals are used, they need to be combined with self-efficacy and cessation support messages since they provoke avoidance reactions.     

Relative Effects of IFRS Adoption and IFRS Convergence on Financial Statement Comparability

One of the primary objectives of both adoption of IFRS and convergence between IFRS and U.S. GAAP is to increase financial statement comparability. Using a unique setting in Germany, we compare the effectiveness of these two approaches in achieving this desired outcome. Our empirical tests show that both adoption and convergence lead to an increase in comparability after the new enforcement regulation in 2005. However, difference‐in‐differences tests show that adoption does not lead to a significant incremental increase in comparability beyond convergence. The findings of this study should be of interest to regulators and standard setters as they assess alternative methods of aligning domestic standards with IFRS.     

Exchange rate undervaluation and manufactured exports: A deliberate strategy?

Recent literature suggests that a proactive exchange rate policy in accordance with price incentives (i.e. undervaluation) can foster manufactured exports and growth. This paper is built on these recent developments and investigates, using a sample of 52 developing countries, whether such a proactive exchange rate policy is adopted. The results show that during the period 1991–2005 a number of countries has used undervaluation to foster the price competitiveness of manufactured exports.