Herd on the Street: Informational Inefficiencies in a Market with Short-Term Speculation

Standard models of informed speculation suggest that traders try to learn information that others do not have. This result implicitly relies on the assumption that speculators have long horizons, i.e., can hold the asset forever. By contrast, we show that if speculators have short horizons, they may herd on the same information, trying to learn what other informed traders also know. There can be multiple herding equilibria, and herding speculators may even choose to study information that is completely unrelated to fundamentals.     

The Fed,the Bond Market,and Gradualism in Monetary Policy

We develop a model of monetary policy with two key features: the central bank has private information about its long‐run target rate and is averse to bond market volatility. In this setting, the central bank gradually impounds changes in its target into the policy rate. Such gradualism represents an attempt to not spook the bond market. However, this effort is partially undone in equilibrium, as markets rationally react more to a given move when the central bank moves more gradually. This time‐consistency problem means that society would be better off if the central bank cared less about the bond market.     

A Conceptual Stress‐Coping Model of Factors Influencing Marketplace Engagement of Visually Impaired Consumers

Visually impaired consumers often suffer one of the worst marketplace stresses when processing product information. Despite there being around 314 million blind or visually impaired people worldwide, today's marketplace does not yet adequately address these stresses. This study develops and tests a theoretical model of how visually impaired consumers cope in marketplace engagement and discusses how companies and policymakers can help to increase marketplace engagement.     

Concern with Immediate Consequences Magnifies the Impact of Compulsive Buying Tendencies on College Students' Credit Card Debt

This research examines whether temporal orientation moderates the impact of compulsive buying tendencies (CBT) on credit card debt. Participants completed the consideration of future consequences scale, a compulsive buying scale, and reported their credit card debt. Results revealed that CBT mediated the relationship between concern with immediate consequences and credit card debt, and high concern with immediate consequences magnified the impact of CBT on credit card debt. This suggests that compulsive buyers who focus on maximizing immediate consequences are at a much higher risk of building up significant amounts of credit card debt.     

The changing role of fairs in the long eighteenth century: evidence from the north midlands1

Despite the recent interest of historians in retailing and distribution, little attention has been paid to fairs. It has often been assumed that by 1800 they were mainly occasions for entertainment. Using a range of sources and focusing mainly on the north midlands, this article argues that many fairs remained significant during the eighteenth century for agricultural marketing, some business and financial transactions, and retailing. By the early nineteenth century, rapidly changing economic conditions, coupled with changed attitudes, threatened these traditional roles and fairs had to adapt or face inevitable decline.     

Payday Loan Choices and Consequences

High‐cost consumer credit has proliferated in the past two decades, raising regulatory scrutiny. We match administrative data from a payday lender with nationally representative credit bureau files to examine the choices of payday loan applicants and assess whether payday loans help or harm borrowers. We find consumers apply for payday loans when they have limited access to mainstream credit. In addition, the weakness of payday applicants’ credit histories is severe and longstanding. Based on regression discontinuity estimates, we show that the effects of payday borrowing on credit scores and other measures of financial well‐being are close to zero. We test the robustness of these null effects to many factors, including features of the local market structure.     

The Effects of Uncertainty and Disclosure on Auditors' Fair Value Materiality Decisions

Financial accounting standards increasingly require fair value measurements. I experimentally examine how uncertainty affects auditors’ adjustment decisions when evaluating fair values. I manipulate two types of uncertainty, input subjectivity and outcome imprecision, and one reporting choice, supplemental disclosure. I find that auditors are most likely to require adjustments when fair values contain both more input subjectivity and more outcome imprecision, but that this likelihood diminishes when clients supplement recognized fair values with additional disclosure. Thus, consistent with moral licensing, I find that auditors tolerate greater potential misstatement in the financial statements when clients provide disclosure, suggesting that the SEC's preference for supplemental disclosure may have the unintended consequence of affecting fair values recognized in the body of the financial statements. I also provide evidence that auditors determine adjustment size by comparing recorded fair value to the nearest bound, rather than the midpoint, of the auditors’ own range estimate, consistent with strict application of auditing standards.     

Does Calculating Retirement Needs Boost Retirement Savings?

Calculating retirement savings needs is often viewed as an essential first step in retirement planning. Yet, little empirical evidence exists to support the value of this activity. This case study examines the connection between calculating retirement savings needs and retirement savings through analysis of an online survey of benefits‐eligible employees at a large Mountain West university. Controlling for a variety of possible covariates, and using an instrumental variable approach, the case study shows that having estimated a retirement savings target increases self‐reported retirement savings. The results provide support for financial educators and planners in their efforts to encourage people to estimate their retirement needs early in the retirement planning process.     

THE DEADWEIGHT LOSS OF COUPON REMEDIES FOR PRICE OVERCHARGES*

Consumers injured by price overcharges often are awarded coupons that can be used for a limited period of time to purchase the good at a price below that which prevails after the overcharge has been eliminated. Coupon remedies cause a deadweight loss by inducing excessive consumption by consumers with relatively low demand during the remedy period. The magnitude of the loss can be comparable to that caused by the price overcharge. As demand variability goes to zero, the deadweight loss from coupon remedies goes to zero. Eliminating the expiration date for the use of coupons does not eliminate the loss.