To trust or not to trust smart consumer products: a literature review of trust-building factors

Management Review Quarterly - Numerous “smart” consumer products are already available on the market, and the diversity of such smart products is expected to increase considerably in...     

Freie (grenzüberschreitende) Radikale in Münster Siegfried J. Schmidt: 60

Ohne Zusammenfassung     

Auswirkungen einer Lohnsteuerzerlegung nach Arbeitsort im Länderfinanzausgleich

In Germany the payroll tax revenue owed to the federal states is distributed exclusively according to the taxpayer’s residence. Many finance experts have long called for this revenue to be distributed at least partially based on the location where the work was done. Model calculations to estimate the financial consequences of such a redesign of the payroll tax distribution should be a useful contribution to the current negotiations on the reorganisation of federal-state financial relations in Germany.     

Jörg Tropp

Ohne Zusammenfassung     

Optimal investments in volatility

Volatility has evolved as an attractive new asset class of its own. The most common instruments for trading volatility are variance swaps. Mean returns of DAX and ESX variance swaps over the time period of 1995 to 2004 are strongly negative, and only part of the negative premium can be explained by the negative correlation of variance swap returns with stock market indices. We analyze the implications of this observation for optimal portfolio composition. Mean-variance efficient portfolios are characterized by sizable short positions in variance swaps. Typically, the stock index is also sold short to achieve a better portfolio diversification. To capture heterogeneous preferences for higher moments, we use a variant of the polynomial goal programming method. We assume that investors strive for a high Sharpe ratio, high skewness, and low kurtosis. Our analysis reveals that it is often not possible to achieve a balanced tradeoff between Sharpe ratio and skewness. Investors are advised to hold the extreme portfolios (Sharpe ratio driven, skewness driven, or kurtosis driven) and avoid the middle ground. This “all-or-nothing” characteristic is reflected in jumps of asset weights when certain thresholds of preference parameters are crossed. These empirical findings can explain why many investors are so reluctant to implement option-based short-selling strategies.

The effects of commercial advertising on children

This paper examines recent published research into the effects of advertising on children in the light of public concern. It states a series of hypotheses on which much public criticism appears to be based and demonstrates that they are not supported by the evidence of researchers into child psychology and advertising. It argues that undesirable and anti-social behaviour by children is not the result of some simple stimulus-response mechanism. Up till now, no serious study has been able to prove a direct and exclusive link between advertising and juvenile purchasing or other forms of behaviour. However, a number of studies have shown that the most important influences on a wide range of children's attitudes and behaviour are parental, family, peer-group and other social factors. This paper first appeared in Commercial Communications, January 1999, and we are grateful to the author for permission to reprint.     

An examination of market efficiency around hurricanes

Hurricane Andrew produced more than $21.5 billion in property damage in Florida and Louisiana. Hurricane Hugo caused about $7 billion in damage in North and South Carolina. Although both hurricanes were large, the magnitudes of their destruction and the geographic concentrations of their paths were markedly different. This study finds that Hugo and Andrew produced substantially different market reactions on property and casualty (P&C) firms. The industry was generally unaffected by Hugo, regardless of whether or not firms had exposure in the Carolinas. Andrew, on the other hand, generated a significant negative impact on firms with exposure in Florida or Louisiana. Other firms were not effected by Andrew. These observations indicate that the market demonstrated an ability to discriminate by the magnitude of hurricane and by P&C firms based on their degree of loss exposure.