Market pricing of executive stock options and implied risk preferences

When managers get to trade in options received as compensation, their trading prices reveal several aspects of subjective option pricing and risk preferences. Two subjective pricing models are fitted to show that executive stock option prices incorporate a subjective discount. It depends positively on implied volatility and negatively on option moneyness. Further, risk preferences are estimated using the semiparametric model of Aït-Sahalia and Lo (2000). The results suggest that relative risk aversion is just above 1 for a certain stock price range. This level of risk aversion is low but reasonable, and it may be explained by the typical manager being wealthy and having low marginal utility. Related to risk aversion, it is found that marginal rate of substitution increases considerably in states with low stock prices.     

Diffusion of mobile handset features: Analysis of turning points and stages

Mobile handsets have evolved into advanced devices with a rich variety of hardware and software features enabling the use of variety of applications, networks, and services. Consequently, mobile handset features constitute an important part of the global communications infrastructure. Modelling the diffusion of mobile handsets as a product category is becoming less relevant as the market is approaching saturation especially in the developed countries. Simultaneously, the diffusion of mobile handset features is increasingly important and of interest to many stakeholders. This article analyzes and compares the diffusion patterns of mobile handset features, using a longitudinal annual dataset of the penetrations of 15 different features in Finland between 2005 and 2010. Two major turning points – the takeoff and the inflection point – as well as the durations of the diffusion stages between these points are determined. The results show large variations between different features, highlighting the significance of the introduction stage in the diffusion process. The results are useful for regulators and companies in understanding the pace of change taking place in the communications infrastructure.     

HETEROSCEDASTICITY OR PRODUCTION RISK? A SYNTHETIC VIEW

Two veins of literature, namely, production risk literature and stochastic frontier analysis, are examined. Both fields are concerned of output variation; the former due to exogenous shocks, the latter due inefficiency. By covering the literature from both the fields, this review suggests that the concept of heteroscedasticity can be utilized to build a synthesis between these mainly separate branches of literature. However, the synthetic approach brings a challenge how to differentiate between different sources of output variation. This challenge is identified as the main obstacle to meaningfully combine the two approaches.     

Stability of the demand for M1 and harmonized M3 in Finland

We derive a theoretical model for the demand for money using the adjustment cost augmented money-in-the-utility-function approach. The steady-state-utility function-parameters of the model of narrow money (M1) estimated with cointegration techniques are stable over the foreign exchange rate regime shift; whereas in the model of harmonized M3 (M3H) they arenot stable. The theoretical model fits the M1 data. The adjustment cost parameters of the M1 model describing the dynamics of the demand for money might indicate technological improvements in banking and payments during the sample period. These results suggest that from the Finnish point of view M1 would be a more appropriate intermediate target for monetary policy than harmonized M3.The views expressed are those of the author and not necessarily the views of the Bank of Finland. I thank Juha Tarkka, Jouko Vilmunen, Pekka Ilmakunnas, Erkki Koskela, Paolo Paruolo, Anders Rahbek, Pentti Saikkonen, Juha Seppälä, Matti Virén and the participants of ESEM96 meeting and Money Demand in Europe conference (October 1997, Berlin) for useful comments and discussions and two anonymous referees and the editors for profound and constructive comments. The usual disclaimer applies. The data may be obtained from the internet, http://wotan.wiwi.hu-berlin.de/oekonometrie/engl/data.html     

Existential–Experiential View of Self‐Sourced (In)Authentic Healthcare Identity

In the healthcare context, both nurses and doctors derive their professional identities from diverse backgrounds, thus resulting in two distinct professions. Becoming a leader and forming a leader identity that is separate from a strong professional identity is a difficult task. However, assuming a leader identity is considered an important aspect of actually being a leader, not just a professional with a leader position. The current article explores authenticity in generic healthcare leader identity formation by utilizing the concept of professional identity. Instead of committing to the humanistic ontological roots of the authentic leadership construct, the research analyzes the concepts of self and authenticity from an existential–experiential perspective. A conceptual framework of self‐sourced healthcare identity formation, including leader identity and professional identity, is presented. The framework shows how leader identity originates in the leader's experiencing self‐in‐situation, which is understood as the source of authenticity. The experiencing self, or the self as a subject, is differentiated from the experienced self, or the self as an object, by which professional identities are formed. The conceptualization provides a way of understanding and developing leadership in fields consisting of strong professional identities. The applications of the framework are also discussed.