Aging, Asset Markets, and Asset Returns: A View From Europe to Asia

The extent of the demographic changes is dramatic especially in some Asian and European countries. This paper investigates the effect of aging on global asset markets and asset returns, focusing on markets for productive capital, and especially on interactions between European and Asian economic development. Aging has complex effects on the markets for real capital. If elderly people save less than younger people, interest rates will increase. At the same time, however, the younger generation becomes smaller, which reduces the demand for new investment. The equilibrium effect is thus uncertain. Our multicountry computational equilibrium model delivers a subtle picture: there will be some decline in the return from productive capital, but it is relatively small. We find noticeable interaction effects between labor market and pension reforms in Europe on the one hand, and the demographic and economic developments in Asia, especially India and China, on the other hand.     

An Investigation of Decision‐Making Styles of Consumers in China

This study investigates Chinese consumers' decision‐making styles. The Consumer Style Inventory (CSI) is administered to 387 adult consumers in China. Both an exploratory factor analysis and a confirmatory factor analysis are adopted to validate the CSI inventory. This results in an eighteen‐item and seven‐factor solution. Findings indicate that five decision‐making styles are valid and reliable in Chinese culture: perfectionistic, novelty‐fashion conscious, recreational, price conscious, and confused by overchoice. Cluster analysis is employed to identify prominent market segments. Based on the findings, three segments are formed: trendy and perfectionistic consumer, traditional and pragmatic consumer, as well as confused by overchoice consumer. Marketing and management implications are discussed.     

TWO‐SIDED MARKETS WITH PECUNIARY AND PARTICIPATION EXTERNALITIES*

The existing literature on two‐sided markets addresses participation externalities, but it has neglected pecuniary externalities between platforms. In this paper we build a model that incorporates both externalities. In our set‐up, differentiated platforms compete in advertising levels and offer consumers a service free of charge that is financed through advertising. We show that advertising can exhibit the properties of a strategic substitute or complement. Surprisingly, we find that platform profits can increase with market entry and that there are cases in which the level of advertising rises with entry. We also consider endogenous entry and provide a welfare analysis.