Ethical myopia: The case of “framing” by framing

The behavioural decision-theoretic concepts of mental accounting, framing and transaction utility have now been employed in marketing models and techniques. To date, however, there has not been any discussion of the ethical issues surrounding these significant developments. In this paper, an ethical evaluation is structured around three themes: (i) utilitarian justification (ii) the strategic exploitation of cognitive habits, and (iii) the claim of scientific status for the techniques. Some recommendations are made for ethical practices. Alan E. Singer is a senior lecturer in Strategic Management at the Department of Management, University of Canterbury. He has previously authored papers in the Journal of Business Ethics and in several other journals including Decision Sciences, Accountancy, International Journal of Forecasting and International Journal of Research in Marketing. Steven Lysonski is an Associate Professor at Marquette University, Milwaukee, Wisconsin. He is a former member of the marketing faculty at the University of Canterbury. He has published widely in such journals as the Journal of Marketing, The European Journal of Marketing, International Journal of Advertising and the Journal of Product Innovation Management. Ming Singer is a senior lecturer in Psychology at the University of Canterbury. Her research interests lie in the area of organisational and personnel psychology, particularly organisational justice. She has published numerous research articles including papers in Personnel Psychology, The British Journal of Psychology and the International Journal of Psychology.David Hayes is currently an East-West Center graduate student at the University of Hawaii, studying energy resources through the Geography Department. He is also a member of the Energy Program of the Resource Systems Institute, East-West Center. He has an Engineering and Commerce degree from Canterbury University.     

Transfer of technology in LDCs

The author discusses the controversial problems connected with the transfer of highly sophisticated technologies to LDCs. In his opinion this transfer and adaptation of technologies is necessary and advantageous, but depends on the development of a national technological capacity of a developing country as a prerequisite.     

Measure for Measure: Exact F Tests and the Mixed Models Controversy

We consider exact F tests for the hypothesis of null random factor effect in the presence of interaction under the two factor mixed models involved in the mixed models controversy. We show that under the constrained parameter ( CP ) model, even in unbalanced data situations, MSB/MSE (in the usual ANOVA notation) follows an exact F distribution when the null hypothesis holds. We also obtain an exact F test for what is generally (and erroneously) assumed to be an equivalent hypothesis under the unconstrained parameter ( UP ) model. For unbalanced data, such a corresponding test statistic does not coincide with MSB/MSAB (the test statistic advocated for balanced data cases). We compute the power of the exact test under different imbalance patterns and show that although the loss of power increases with the degree of imbalance, it still remains reasonable from a practical point of view.     

Nonlinear continuous time modeling approaches in panel research

Stochastic differential equations (SDE) are used as dynamical models for cross-sectional discrete time measurements (panel data). Thus causal effects are formulated on a fundamental infinitesimal time scale. Cumulated causal effects over the measurement interval can be expressed in terms of fundamental effects which are independent of the chosen sampling intervals (e.g. weekly, monthly, annually). The nonlinear continuous–discrete filter is the key tool in deriving a recursive sequence of time and measurement updates. Several approximation methods including the extended Kalman filter (EKF), higher order nonlinear filters (HNF), the local linearization filter (LLF), the unscented Kalman filter (UKF), the Gauss–Hermite filter (GHF) and generalizations (GGHF), as well as simulated filters (functional integral filter FIF) are compared.     

What the Pension Benefit Guaranty Corporation can learn from the Federal Savings and Loan Insurance Corporation

This article attempts to draw attention to some important lessons that the Pension Benefit Guaranty Corporation (PBGC) can learn from the experience of the Federal Savings and Loan Insurance Corporation (FSLIC). FSLIC was the government agency that insured deposits at savings and loan associations until it was replaced in 1989, leaving a massive deficit to be financed by taxpayers. Like FSLIC, the PBGC is a government agency that guarantees a form of private corporate debt. As guarantor of the pension benefits promised by private plan sponsors, the PBGC bears the risk of a shortfall between the value of insured benefits and the assets securing those benefits. There has been a significant change in the attitude and behavior of senior public officials and legislators as a result of the S&L debacle. Directors of the PBGC and the Secretaries of Labor to whom they report have pointed out the weaknesses of some of the pension funds that the PBGC insures and have pursued an active legislative agenda designed to reduce the PBGC's vulnerability to those weaknesses. Those efforts have resulted in a series of laws and amendments to laws that have significantly improved the U.S. pension guarantee system. But the magnitude of the PBGC's exposure to shortfall risk depends on three factors: (1) the financial strength of plan sponsors, (2) the degree of underfunding of insured benefits, and (3) the mismatch between the market-risk exposure of insured benefits (a form of long-term corporate debt) and the market-risk exposure of the assets securing that debt. Only the first two of these have been addressed by past legislative reforms. The third factor appears not to be well understood. It is apparently a widespread belief among policymakers that a well-diversified pension portfolio of equity securities provides an effective long-run hedge against liabilities of defined-benefit pension plans, so that there is no mismatch problem. This belief is mistaken. Equities are not a hedge against fixed-income liabilities even in the long run. Thus, even if the PBGC achieves the goal of full funding at one point in time, the mismatch between the market-risk exposure of the pension benefits that it insures and the pension assets backing them creates the potential for large shortfall losses in the future as the economy and capital market rates change in unpredictable ways. Therein lies an uncomfortable parallel with the S&L debacle.     

North-South multipliers

This paper describes multiplier (magnifier) effects in the impact of growthof industrial countries on growth, exports and terms of trade of developing countries. The data are mainly derived from World Bank projections for the 1980s. This is supplemented by historical data on the effects of the slow-down in 1973–1980 compared with previous years, provided by the IMF. The overall multiplier effect on LDC growth has been prevented by compensatory action (mainly rapid expansion of commercial bank lending) but only at the cost of rapidly increasing debt burdens - a postponement rather than a solution of the problem.     

Vertical Foreclosure in Broadband Access?

The merger of AOL and Time Warner involved a vertical combination of the largest Internet content provider and aggregator and a large cable system operator which offers a conduit through which broadband customers can access Internet content at high speeds. We consider the economic incentives of such a firm to engage in two distinct vertical foreclosure strategies: (1) conduit discrimination—insulating its own conduit from competition by limiting rival platform distribution of its affiliated content and services, and (2) content discrimination—insulating its own affiliated content from competition by blocking or degrading the quality of outside content.     

Money stock revisions and unanticipated money growth

An important ‘empirical regularity’ is the strong positive effect of money shocks on output and employment. One strand of business cycle theory relates this finding to temporary confusions between absolute and relative price changes. These models predict positive output effects of unperceived monetary movements, but the quantitative importance of unperceived shifts in nominal aggregates is subject to question. Another strand of theory, based on long-term nominal contracts and analogous price-setting institutions, generates output effects from unanticipated, but not necessarily contemporaneously unperceived, money shocks. However, the real effects of unpredicted, but contemporaneously understood, monetary changes are not obviously consistent with efficient institutional arrangements. The present paper provides some empirical evidence on the two types of theories by analyzing the output effects associated with revisions in the money stock data, where the revisions are interpreted as components of unperceived monetary movements. The revisions turn out to have no significant explanatory power for output. Previous findings that innovations from an estimated money growth equation have a significant output effect remain intact when the revisions are included as separate explanatory variables. Overall, the study provides a small amount of evidence against the special role of unperceived, as opposed to unanticipated, money movements as a determinant of business fluctuations.