The index futures markets: Is screen trading more efficient?

This article uses a nonparametric test based on the arc‐sine law (see, e.g., Feller, 1965 ), which involves comparing the theoretical distribution implied by an intraday random walk with the empirical frequency distribution of the daily high/low times, in order to address the question of whether the abandonment of pit trading has been associated with greater market efficiency. If market inefficiencies result from flaws in the market microstructure of pit trading, they ought to have been eliminated by the introduction of screen trading. If, on the other hand, the inefficiencies are a reflection of investor psychology, they are likely to have survived, unaffected by the changeover. We focus here on four cases. Both the FTSE‐100 and CAC‐40 index futures contracts were originally traded by open outcry and have moved over to electronic trading in recent years, so that we are able to compare pricing behavior before and after the changeover. The equivalent contracts in Germany and Korea, on the other hand, have been traded electronically ever since their inception. Our results overwhelmingly reject the random‐walk hypothesis both for open‐outcry and electronic‐trading data sets, suggesting there has been no increase in efficiency as a result of the introduction of screen trading. One possible explanation consistent with our results would be that the index futures market is characterized by intraday overreaction. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:337–357, 2004     

Why Do We Care What Others Pay? The Effect of Other Consumers’ Prices on Inferences of Seller (Dis)Respect and Perceptions of Deservingness Violation

Comparisons to other consumers have been identified as particularly meaningful in shaping price fairness judgments, but why they should be so is not clear. The current work argues that fairness judgments reflect both the extent to which consumers receive what they believe they deserve and inferences about seller respect. We suggest that comparisons to consumers paying lower prices are a particularly potent source of unfairness because they highlight the violation of deservingness and readily communicate information about sellers’ opinions of consumers. Three experiments investigate these ideas. Implications for fairness theory and marketing are discussed.     

Spontaneous fires in insulation

Combustible liquids may self-heat in porous insulation yielding smoldering or flaming combustion. In Part I the problem is reviewed and practical measures discussed. Using two-inch cubes of insulation and a standardized procedure, Spontaneous Ignition Temperatures (SITs) ranging from 55-184 C are reported for a series of combustible liquids. The application of a self-heating parameter Z = (AIT)/(AIT-FP), where AIT is autoignition temperature and FP is closed cup flash-point (both in Celsius), is examined. The “Z” parameter gives some indication of materials that will self-heat and those that will evaporate. For Z > 1.61 ignition occurred for all the liquids tested. Evaporation usually occurred for materials with Z < 1.35. It was found that some water-reactive or peroxide-forming materials can ignite where only evaporation would be predicted from Z value considerations. An important example of a water-reactive material is ethylene oxide (EO); the importance of EO insulation fires is that under certain conditions explosive decomposition of EO contained in the equipment can be initiated. It was previously determined that ethylene oxide reacts in porous, refractory insulations forming low molecular weight polyethylene glycols. The formation rate depends on temperature and the type and condition (particularly water content) of the insulation. Unlike EO the glycols have low volatility and may accumulate over time to several times the mass of some insulations. Under certain conditions the glycols can ignite spontaneously. In Part II experiments carried out to examine this phenomenon are discussed. Where process temperatures are above the SIT (but below the AIT), cellular glass insulation will minimize the risk of insulation fires. One disadvantage, especially for thermally unstable materials such as EO, is that cellular glass has poor fire endurance properties. The use of a realistic fire endurance test to specify insulation thickness and additional measures such as stainless steel jackets are described. Alternatives to the use of cellular glass are discussed. When selecting an insulation system, it should be determined whether an insulation fire might occur and the loss potential from such an event should be evaluated.     

The Essential Role of Sense of Community in a Youth Sport Program

This multiphased study identifies the salient benefits that parents seek for their families from a youth sport program. Phase 1, a preseason focus group study of parents of swimmers in three clubs (N = 15), indicated parents seek a sense of community for their children and themselves, and sense of community is linked to their desire for children to learn sport and life skills. Phase 2, a postseason survey of parents in the same three clubs (N = 129), tested the relationships among coaching quality, friendships, organizational communication, sport and life skills, sense of community, parents' satisfaction, and their repeat purchase intention. Using path analysis, sense of community was identified as the key driver of satisfaction and repeat purchase intention, with swimming improvement also having a significant effect on satisfaction. These findings highlight the central role sense of community plays for participants and their families in youth sport contexts.     

Reciprocity in Ranked Relationships: Does Social Structure Influence Social Reasoning?

Many economic and evolutionary theories have modeled cooperation as the evolutionary outcome of decisions made by autonomous, self-interested agents operating in a social vacuum. In this paper we consider the implications for cooperative interactions when prior social structures and corresponding social norms exist. In particular we investigate the influence of social rank/status on perceptions of fairness and tolerance of cheating. We review evidence from a series of experiments employing the Wason selection task (a test of conditional reasoning) and the ledger task (a decision making task) suggesting that people cued to adopt a perspective of high social rank are more tolerant of cheating and simultaneously believe that they have been more fairly treated (even when cheated) than people cued to adopt a perspective of low social rank. However, the evidence also suggests interesting cross-cultural differences in perceptions of fairness and tolerance of cheating in ranked relationships. This revised version was published online in August 2006 with corrections to the Cover Date.     

Real Estate Returns: A Comparison with Other Investments

Real estate returns, measured unleveraged, have been between those of stocks and bonds over 1960–1982. Due to appraisal smoothing and imperfect marketability, one must be careful about directly comparing measured real estate returns with those on other assets. It is likely, however, that low correlations with stocks and bonds make real estate a diversification opportunity for traditional portfolio managers. In addition, the issue of how various assets are priced is addressed. While stocks are priced primarily on market or beta risk, and bonds are priced primarily on interest rate and default risk, the real estate pricing mechanism includes residual risk and non-risk factors such as taxes, marketability costs and information costs.     

Capital Structures in Developing Countries

This study uses a new data set to assess whether capital structure theory is portable across countries with different institutional structures. We analyze capital structure choices of firms in 10 developing countries, and provide evidence that these decisions are affected by the same variables as in developed countries. However, there are persistent differences across countries, indicating that specific country factors are at work. Our findings suggest that although some of the insights from modern finance theory are portable across countries, much remains to be done to understand the impact of different institutional features on capital structure choices.