Dissatisfied Consumers: Who Gets Upset and Who Takes Action

Past studies of dissatisfied consumers have either examined what kinds of people get upset about business practices or what kinds of people complain about the way they have been treated in the marketplace. This article develops a new profile of the dissatisfied consumer by considering not only who gets upset about business practices, but also what they do about it. This profile appears more complete than profiles presented in earlier studies. Several important conclusions are offered concerning the nature of consumer dissatisfaction and consumer policy.     

Regulatory Policy Design in an Uncertain World

The paper examines principal–agent relationships in uncertain environments where beliefs of the contracting parties (the regulator and the firm) are represented by sets of probabilities. In addition to fully characterizing the first‐best and the second‐best solutions, we examine optimality of zero‐risk, fixed‐payment schemes and the relationship between the first‐best and the second‐best solutions. In the second‐best world, where the regulator can only contract on the quality of the good, a zero‐risk standard is optimal when the firm has beliefs that are so ambiguous that the firm’s marginal rate of transformation belongs to the set of the firm’s relative probabilities.     

Predicting Contemporary Volume with Historic Volume at Differential Price Levels: Evidence Supporting the Disposition Effect

This paper presents empirical evidence comparing two models of trading in equities—the well-known tax-loss-selling hypothesis and “the disposition effect.” According to the disposition effect, investors are reluctant to realize losses but are eager to realize gains. This paper distinguishes between the two models with a new methodology that examines the relationship between volume at a given point in time and volume that took place in the past at different stock prices. The evidence overwhelmingly supports the disposition effect not only as a determinant of year-end volume, but also as a determinant of volume levels throughout the year.     

Editors’ Introduction to the Special Issue

In February 2019, the Journal of Money, Credit and Banking (JMCB) turned 50. The editors of the journal decided to celebrate this anniversary with two conferences, reflecting the two broad areas that the journal covers. A first conference on “Financial intermediation, regulation and economic policy” was held at the European Central Bank in Frankfurt/Germany on March 28–29, 2019, and addressed topics in the credit and financial intermediation fields. A second conference addressed topics in the macro-economic and monetary fields, and took place at the Federal Reserve Bank of New York on May 30–31, 2019. This Special Issue displays the best contributions to the first conference. The contributions to the second celebratory conference are published in a separate Special Issue.