Investigation of the Effects of Disclosure Statements in Rental Car Advertisements

State attorneys general recently proposed mandatory disclosures for rental car advertising. This study investigates the effects of alternate disclosure statements on consumers' beliefs. The results suggest that a shorter disclosure statement may be as effective as the one proposed.     

Price Dynamics in Repeat-Purchase Markets*

A retail market in which customers repeat purchase is modelled. When customer movement between firms is sluggish, price overshooting characterizes firms' optimal response to demand or cost shocks. Thus retail prices would be predicted to be more variable than wholesale prices, a prediction at variance with empirical evidence. Uncertainty in demand and customer imperfect information are introduced into the model to attempt to reconcile this inconsistency between theory and evidence. The introduction of demand uncertainty actually increases the magnitude of price overshooting. By contrast, the introduction of imperfect customer information reduces the variability in retail prices.     

Using the Murphy Model to Provide Short-run Macroeconomic Closure for ORANI

A macro model incorporating rational expectations in financial markets (the Murphy Model–MM) is used to endogenize the macroeconomic environment for a comprehensive general equilibrium model (ORANI). The interface exploits the existence of variables which are endogenous to both models, calibrating on a shock to government spending. Prospective benefits include: (1) to the numerous policy oriented users of ORANI, a facility allowing the macroeconomic environment to be determined by a macrodynamic model such as MM; (2) to these users, reassurance that ORANI's short-run translates in calendar time to about two years; (3) to the clientele of a macro model, the possibility of much more detailed projections.     

Demanding ‘credible commitment’: public reactions to the failures of the early financial revolution1

North and Weingast's notion of ‘credible commitment’ arguably offers a reasonable understanding of the factors that allowed the development of a trusting relationship between the state and its potential creditors over the long term. Yet, they failed to recognize the difficulties that were encountered along the way. This article highlights some of those difficulties and shows that at times when credible commitment was in doubt, supporters of the financial revolution held the government to account through the published media and by direct action. This is important for two reasons. First, the contemporary debate regarding the financial revolution, as it is presented by some historians, may lead us to presume that there would have been little public outcry had the government reneged on its debt. Indeed, we might argue that hostility towards financiers had always made default popular with many segments of the population. Yet, clearly opinion was not quite so one‐sided and the reaction against potential default was considerable. Second, the fact that the public creditors were willing to act to protect themselves shows that credible commitment was not just created from above by the Glorious Revolution and the subsequent development of the institutions of government; it was demanded from below by the people who invested in the financial revolution.     

ENDING RESTRICTIONS TO MIGRATION FROM THE NEW EU MEMBER COUNTRIES: SECTORAL TRADE AND REAL WAGE EFFECTS

Most EU-15 countries have kept restrictions to migration from the new member countries but committed to removing them within seven years from the 2004 enlargement. This article predicts the sectoral trade and real wage impact on high-income, mid-income, and low-income members of removing those restrictions, given two extreme scenarios: either all migrants are skilled or all are unskilled. The main effect of skilled migration is the relocation of high-scale economy, skill-intensive industries from mid-income into high-income countries. The main effect of unskilled migration is the relocation of low-scale economy, low skill-intensive industries from low-income into mid-income countries. Both high-income and low-income members would be better off with skilled migration, but those with mid-income would benefit from unskilled migration. ( JEL F1, F15, F22, J31, L6)     

DIVERSIFICATION STRATEGY,ENTRY MODE,AND PERFORMANCE: EVIDENCE OF CHOICE AND CONSTRAINTS

Despite theoretical arguments matching type of diversification strategy with mode of entry, the exact form of relationships between strategy, mode of entry, and performance remains enigmatic. Our analysis, based on two samples, demonstrates that matches between strategy and mode did improve performance in one time period, but not a second. In addition, the results show that exclusive reliance on a single mode (internal development or acquisition) can restrict performance. © 1997 by John Wiley & Sons, Ltd.