Please select from the titles below:
- A Collective Tournament under (un)limited Liability
- Measuring Customer Value Gaps: An Empirical Study in the Mexican Retail Market
- Hyperbolic Policymakers and Economic Growth
- Are Devaluations Contractionary? Evidence from Panel Cointegration
- Investment and Non-fundamental Movements in Asset Prices: is there a role for monetary policy?
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Collective Tournament under (un)limited Liability (p.1)
by O Gürtler In the principal-agent literature, a collective tournament, i.e. a tournament between teams, has been proposed as a solution to the free-rider problem. Competition between the teams is said to foster within-team cooperation and, hence, to mitigate free-riding. In this paper, we analyse the impact of an agent's liability on the tournament outcome. In the more realistic case of limited liability, a collective tournament is found to perform very poorly. Free-riding is, in this case, even intensified when applying a collective tournament.
Measuring Customer Value Gaps: An Empirical Study in the Mexican Retail Market (p.19)
by Rajagopal
The role of customer value has been recognized by firms over time as an instrument that can stimulate market share and profit optimization. Customer values for a new product of firms in competitive markets are shaped more by habits, reinforcement effects and situational influences than strongly-held attitudes. A basic premise of the paper is that the focus should be on maximizing total customer value and customer satisfaction, factors which are inter-dependent in the decision making process towards buying new products. The framework of analysis is a proposed model which integrates all aspects so as to maximize the potential of the organization and all its subsystems to create and sustain satisfied customers. The discussion in the paper focuses on customer value gaps in the process of marketing new products and explores the possible situations that may lead to lower customer value. The model discussed in the study has been subject to empirical testing through analysis of data collected from 369 respondents to a study conducted in 11 retail auto (or self-) service stores located in Mexico City.
Hyperbolic Policymakers and Economic Growth (p.41)
D NocettiIn this note I explore how a non-constant rate of time preference on the part of policymakers affects economic growth. In a simple dynamic general equilibrium model I show that if the incumbent government has a rate of time preference in the form of a quasi-hyperbolic discounting function, tax rates can be substantially higher and economic growth considerably lower than the standard case of exponential discounting.
In the hardcopy version of the journal, this paper contains a diagram which was incorrectly printed. Click here for a correct version in .pdf format.
Are Devaluations Contractionary? Evidence from Panel Cointegration
(p.49)
by M Bahmani-Oskooee and I Miteza Earlier studies that investigated the relation between exchange rate and domestic output employed panel data. In this paper we improve upon the traditional approaches of the existing econometric literature on contractionary devaluation or depreciation by applying panel unit root and panel cointegration techniques to annual data from 42 countries (18 OECD and 24 non-OECD). After confirming the existence of unit roots in all variables of the model as well as cointegration among all variables, results from different specifications of the model revealed that in the long-run, devaluations are contractionary in non-OECD countries regardless of model specification. However, for OECD countries the results were sensitive to model specification.
Investment and Non-fundamental Movements in Asset prices: is there a role for monetary policy?
(p.65)
by Fernando Alexandre and Pedro Bação The role of monetary policy during periods of asset price volatility has been the subject of discussion among economists and policymakers at least since the 1920s and the Great Depression that followed. Some economists have been arguing that the performance of inflation-targeting central banks can be improved by reacting to misalignments in asset prices, because these may result in distortions in consumption and investment decisions. Using a sticky price model with endogenous investment driven by non-fundamental movements in asset prices, we discuss the potential benefits, in terms of output and inflation stabilisation, of monetary policy reacting to asset prices over and above the deviation of the inflation forecast from the target. We show that identifying the source of asset price movements is crucial to welfare gains.In the hardcopy version of the journal, this paper contains diagrams which were incorrectly printed. Click here for a correct version in .pdf format.
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