Pricing and Capital Allocation for Multiline Insurance Firms

We study multiline insurance companies with limited liability. Insurance premiums are determined by no‐arbitrage principles. The results are developed under the realistic assumption that the losses created by insurer default are allocated among policyholders following an ex post, pro rata, sharing rule. In general, the ratio of default costs to expected claims, and thus the ratio of premiums to expected claims, vary across insurance lines. Moreover, capital and related costs are allocated across lines in proportion to each line's share of a digital default option on the insurer. Our results expand and generalize those derived elsewhere in the literature.     

Cause I'll Feel Good! An Investigation into the Effects of Anticipated Emotions and Personal Moral Norms on Consumer Pro-Environmental Behavior

Anticipated emotions and moral norms have previously been found to influence consumer adoption of pro-environmental products in different ways. However norms and emotions have seldom been combined in order to understand their relations in motivating consumers to adopt sustainable products. Despite the environmental benefits of sustainable products, consumer adoption is slow to take off. Utilizing data from an online survey (N = 576), this study finds that anticipated emotions directly influence consumer adoption and the effect of moral norms is mediated by the anticipated emotions. This study extends the norm activation model and implies communicating positive emotions for promoting sustainable products.     

A Model of Reputation in Cheap Talk*

We study a dynamic game of advice where the sender's preferences are unknown to the receiver. The novel feature of the model is that there is more than one type of biased sender. We show that the more equal the proportions of different biases in the sender population, the greater the credibility of the information transmitted. Somewhat surprisingly, however, we also find that the receiver does not benefit from this equality. We discuss our results in the context of political lobbying and show that institutions that increase transparency lower lobbyists' incentives for truthtelling, but unambiguously promote the policymaker's welfare.     

Industrial Policies and the Macroeconomic Effects of Taxation: some comments

Comments are made by Amable & Petit (1996), which examines industrial policies, and by Mair & Laramie (1996), which examines taxation policies. Agreement is found with both papers that modern Keynesian policy has much to offer in these two areas beyond what is generally presumed. Expectations formation is pointed to as one area that both these papers should more explicitly incorporate in their arguments. Similarly, regional considerations and ‘location competition’ are held to be important considerations. The role of finance is pointed to as a fundamental Keynesian consideration that needs to be addressed in effectively formulating industrial and taxation policies.     

Summits,Riots and Media Attention: The Political Economy of Information on Trade and Globalisation

Supply of information has increased rapidly through the growth of commercial media and technological innovations. Yet economists still blame anti‐globalists’ demonstrations and public opposition to trade liberalisation on poor information. This paper analyses how the structure of the media industry affects the distribution of information on trade policy and globalisation. We present an empirical analysis of Belgian media reporting on trade policy and globalisation over the 1999–2002 period, supports these hypotheses and finds strong negative bias in media coverage. Moreover, we find that media coverage of trade policy and globalisation is highly concentrated around summit meetings of political leaders. Media attention in the popular press is heavily influenced by riots and demonstrations at summits. The paper points at important implications for public information on trade policy and globalisation and for economists.     

Selecting representative case vignettes for clinical judgement studies: Examples from two heart failure studies

In the Clinical Judgement Analysis (CJA) tradition there are strong arguments in favour of using representative case vignettes. Due to methodological and practical constraints, however, it is often necessary to make compromises regarding representativity. In this article, we discuss our experiences in working with these problems in connection with two studies about general practitioners heart failure diagnoses. CJA is a method for investigating and describing decision-making in which both judges and judgement situations are taken into consideration. This means that when we want to study physicians diagnoses, both the participating physicians as well as the case vignettes should be sampled to be representative for the diagnostic situation. If representativity is interpreted in a strictly statistical sense, the case vignettes should reflect a well identified population of patients regarding values, distribution and intercorrelations of the relevant patient characteristics (variables). Creating a set of representative case vignettes meeting all theoretical requirements will often be difficult. Selecting a relevant population and relevant variables, deciding about the appropriate number of variables and case vignettes, and deciding whether authentic patients or constructed case vignettes should be used are some of the problems that must be dealt with.     

A Methodology for Assessing Organizational Core Values*

abstract The goal of this study is to offer a methodology for empirically assessing the core values of an organization. It uses means–end analysis in order to determine those values that organization members manifest in their daily behaviour, and which are not just espoused ‘truisms’. The method is based on the sense members of an organization make of what they do. Sensemaking follows a means–end pattern, through which individual actions converge into central values. The values most central in this means–end structure are the core values that effectively motivate organization members in their job. Our method works in two steps: first, exploratory interviews using the laddering‐technique establish the values potentially most central to the organization; then, a follow‐up survey assesses the complete pattern of means–end relations among the potential values. Validity tests show that the most central values derived from this survey data are the most important to organization members. These values are also the most stable over time. We make a comparison of this method with traditional value surveys and we discuss its implications for the study of organizational behaviour.     

Human capital, market imperfections, and labor reallocation in transition

In this paper, we investigate the effects of human capital and factor market imperfections on household decisions regarding labor use and reallocation in transition countries. We develop a model that accounts explicitly for heterogeneity in the supply of labor and analyze its impact on the allocation of labor. Furthermore, the effects of imperfections in the capital and labor markets on the reallocation process are modeled. Using a dataset based on a countrywide representative survey of Hungarian rural households, we estimate the effects empirically and find them to be important. Journal of Comparative Economics 32 (4) (2004) 745–774.