Migration decisions under ambiguity: Migration distance effects revisited

There is ample evidence that distance has a strong negative effect on migration. Despite its significance in migration decisions, scholars rarely explore the migration distance effect deeper than the first level of interpretation derived from the simple neoclassical theory of migration. This study revisits the migration distance effect in the spirit of Knightian distinction between risk and uncertainty. To this end, this study attempts to construct estimates of the risk premium migrants are willing to pay to avoid the risk associated with migration distance. The results show that the magnitude of the distance effect is not rationalized by risk aversion in the Arrow–Pratt sense (Arrow, 1965, The theory of risk aversion, Yrjo Jahnssonin Saatio, Helsinki, Finland, 90; Pratt, 1964, Econometrica, 32, 122). In particular, the risk premium demanded by distant rural residents is unjustifiably higher compared with that of those living closer to urban areas in their migration decisions. The results suggest that the migration distance effect is analogous to the equity home bias puzzle and the Ellsberg paradox in that the assumption of subjective expected utility can lead to seemingly irrational human behaviors. Some of the findings in this study shed light on the role of subjective aspects such as perception, confidence, and pessimism in migration decisions, which have been neglected in the literature.     

Learning and the monetary policy strategy of the European Central Bank

This paper examines the welfare implications of alternative inflation targeting proposals for the monetary policy of the European Central Bank. We assume that policy makers have to “learn” the laws of motion of inflation in an economy characterized by “stickiness” in domestic price setting behavior and subjected to recurring shocks to productivity, exports and foreign price. We find that a switch from an “asymmetric” inflation targeting strategy to an “symmetric” makes little difference in welfare payoffs, but it comes at a cost of much higher interest-rate variability. We also find that there are practically no welfare gains from switching from an inflation-targeting strategy based on the Harmonized Index of Consumer Prices (HICP) to a strategy based on the domestic price component of the HICP.     

Early Retirement and Bridge Employment Intentions Among Older Workers in Singapore

This paper examined the relevance of 14 demographic, cognitive, and affective factors in individuals' intentions to voluntarily retire early and to secure bridge employment after retirement. Results based on a sample of 361 respondents aged between 40 and 59 suggested that marital status, perceived negative age-health relationship, gender psychological readiness for retirement, and family orientation were related to early retirement intentions. Work centrality, perceived organisational attitude towards older employees, and psychological readiness for early retirement were related to bridge employment intentions. Implications for research were discussed.     

Countries and their products: A cognitive structure perspective

This research reports on consumers’ cognitive structures for countries and their products. In-depth personal interviews identified respondents’ knowledge, beliefs, myths, and other relevant cognitions related to a diverse set of 11 countries and their products. Derived cognitive dimensions were analyzed via correspondence analysis, and the 11 countries were subsequently grouped into five sets, or cognitive categories. In addition to the empirical findings, the article introduces the concept of country equity as a new way of thinking about global brands and discusses managerial implications related thereto. He has published in theJournal of Consumer Research, Journal of Marketing Research, Journal of Marketing, and elsewhere. His articles have appeared in theJournal of Marketing, Journal of the Academy of Marketing Science, Journal of International Business Studies, California Management Review, and others. He is the coauthor of two marketing research textbooks and has published in leading marketing and social psychological journals.     

Pricing options using implied trees: Evidence from FTSE‐100 options

Previously, few, if any, comparative tests of performance of Jackwerth's ( 1997 ) generalized binomial tree (GBT) and Derman and Kani ( 1994 ) implied volatility tree (IVT) models were done. In this paper, we propose five different weight functions in GBT and test them empirically compared to both the Black‐Scholes model and IVT. We use the daily settlement prices of FTSE‐100 index options from January to November 1999. With both American and European options traded on the FTSE‐100 index, we construct both GBT and IVT from European options and examine their performance in both the hedging of European option and the pricing of its American counterpart. IVT is found to produce least hedging errors and best results for American call options with earlier maturity than the maturity span of the implied trees. GBT appears to produce better results for American ATM put pricing for any maturity, and better in‐sample fit for options with maturity equal to the maturity span of the implied trees. Deltas calculated from IVT are consistently lower (higher) than Black‐Scholes deltas for both European and American calls (puts) in absolute term. The reverse holds true for GBT deltas. These empirical findings about the relative performance of GBT, IVT, and Standard Black‐Scholes models are important to practitioners as they indicate that different methods should be used for different applications, and some cautions should be exercised. © 2002 Wiley Periodicals, Inc. Jrl Fut Mark 22:601–626, 2002