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When size doesn't matter: the impact of unexpected surcharges on consumer reactions
Get PDFService firms increasingly use surcharges on complimentary items, yet little is known about how consumers respond to these charges. Across five studies in the restaurant context, we show that even nominal surcharges elicit negative consumer responses. Specifically, adding surcharges to complimentary items lowers engagement with advertisements. Furthermore, even a one-cent surcharge reduces perceived fairness and revisit intention. These effects arise because such surcharges violate communal norms, a type of relationship norm emphasizing genuine concern for others and acts of goodwill. By contrast, the negative effect disappears when exchange norms are activated, while it persists under communal norm activation. Together, these findings advance research on consumer responses to small surcharges on complimentary items and offer practical guidance on how service firms can communicate surcharges to mitigate negative reactions
Testing for co-explosive behavior between mortgages loans and house prices in the Spanish economy
Get PDFPurpose The aim of this paper is to apply the methodology developed by Evripidou et al. (2022) to assess the co-explosivity between housing credit and housing prices in the Spanish economy from 1971 to 2024. Design/methodology/approach First, the authors use recursive unit root tests for explosiveness, proposed by Phillips et al. (2011) and Phillips et al. (2015a), to investigate whether nominal house prices (NHP) and housing credit exhibit bubble-like behavior at any point in the time series. Second, they apply the methodology of Evripidou et al. (2022) to assess co-explosiveness between housing credit and house prices. Thus, this study not only analyzes the univariate explosiveness of these series but also explores their interdependence. A (stable) asynchronous coexplosiveness would permit the construction of early warning indicators for upcoming explosiveness in housing markets. Findings First, to examine explosiveness in individual series, they use recursive unit root tests proposed by Phillips et al. (2011) and Phillips et al. (2015a) to assess whether NHP and housing credit exhibit bubble-like behavior. These tests identify periods of exuberance in 1988–1991 and 1992–1993 (coinciding with economic expansion before the 1992 Barcelona Olympics and Seville Universal Exposition) and 2001–2008 (preceding the subprime mortgage crisis and the “Spanish housing boom”). Second, regarding co-explosivity, the KPSS test for co-explosivity reveals no co-explosivity when house prices lead housing credit, as the null hypothesis of stationarity is rejected across all lags (−5 to +5 years). However, a significant co-explosivity pattern emerges when housing credit leads house prices, with a stable bubble relationship observed for leads of 2–5 years. The strongest relationship occurs at a 4-year lead, indicating that credit dynamics precede and drive housing price bubbles. This finding is central to their analysis, highlighting the critical role of credit in triggering housing price bubbles. It underscores the importance of addressing the leading effect of credit, which is essential for effective policy and market interventions aimed at mitigating real estate bubbles. The empirical evidence, particularly at the 4-year lead, reveals a feedback mechanism in which credit growth drives subsequent price increases. Given that their econometric analysis identifies credit dynamics as a key driver of housing bubbles, policy interventions should encompass macroprudential and microprudential measures, alongside fiscal and structural policies. Originality/value This paper examines the interaction between housing prices and housing credit in Spain from 1971 to 2024, contributing to the empirical literature on the Spanish economy in two ways. First, they use recursive unit root tests for explosiveness, proposed by Phillips et al. (2011) and Phillips et al. (2015a), to investigate whether NHP and housing credit exhibit bubble-like behavior at any point in the time series. Second, they apply the methodology of Evripidou et al. (2022) to assess co-explosiveness between housing credit and house prices. Thus, this study not only analyzes the univariate explosiveness of these series but also explores their interdependence. A (stable) asynchronous coexplosiveness would permit the construction of early warning indicators for upcoming explosiveness in housing markets
Lessons from financing green industrial policy under financial constraints in India
Get PDFThis policy brief sets out India’s approach to financing green industrial policy, and particularly the expansion of solar power, in the context of limited fiscal resources and India’s 2070 net zero goal. The brief describes the success of state-organised financing policies for solar power and lessons that can be applied to other emerging markets and developing economies (EMDEs)
Leaf-to-leaf paths and cycles in degree-critical graphs
Get PDFAn n-vertex graph is degree 3-critical if it has 2n-2 edges and no proper induced subgraph with minimum degree at least 3. In 1988, Erdős, Faudree, Gyárfás, and Schelp asked whether one can always find cycles of all short lengths in these graphs, which was disproven by Narins, Pokrovskiy, and Szabó through a construction based on leaf-to-leaf paths in trees whose vertices have degree either 1 or 3. They went on to suggest several weaker conjectures about cycle lengths in degree 3-critical graphs and leaf-to-leaf path lengths in these so-called 1-3 trees. We resolve three of their questions either fully or up to a constant factor. Our main results are the following:every n-vertex degree 3-critical graph has Ω(logn) distinct cycle lengths; every tree with maximum degree Δ≥3 and ℓ leaves has at least logΔ-1((Δ-2)ℓ) distinct leaf-to-leaf path lengths; for every integer N≥1, there exist arbitrarily large 1–3 trees which have O(N0.91) distinct leaf-to-leaf path lengths smaller than N, and, conversely, every 1–3 tree on at least 2N vertices has Ω(N2/3) distinct leaf-to-leaf path lengths smaller than N. Several of our proofs rely on purely combinatorial means, while others exploit a connection to an additive problem that might be of independent interest
Making progress in the Chicago police department, 1862-2024
No full textClaims to have made progress are a mainstay of organizational reputation management. However, confusing and contradictory performance expectations can make progress difficult to locate among a police department’s priorities. A case study of the Chicago Police Department’s front-facing pronouncements over more than a century and a half clarifies how a bureaucracy works, stretches, and repackages ‘progress’ to resolve those confusions and contradictions. We find that progress claims featured more prominently and fervently during moments when the department had reason to believe its legitimacy was threatened. Within that general pattern, we also find specific patterns in the form that progress claims took. We observe the stable reliance on two techniques to gesture toward progress the police either promised to enact or that it claimed it had already delivered: the police shifted goalposts by cycling through inconsistent measures of favorable performance from one year to the next, and they drummed crises to dramatize the obstacles that favorable performance required them to overcome. By showing how both techniques reinforced one another, we clarify how a police department ‘makes’ progress
Designing time series experiments in A/B testing with transformer reinforcement learning
Get PDFA/B testing has become a gold standard for modern technological companies to conduct policy evaluation. Yet, its application to time series experiments, where policies are sequentially assigned over time, remains challenging. Existing designs suffer from two limitations: (i) they do not fully leverage the entire history for treatment allocation; (ii) they rely on strong assumptions to approximate the objective function (e.g., the mean squared error of the estimated treatment effect) for optimizing the design. We first establish an impossibility theorem showing that failure to condition on the full history leads to suboptimal designs, due to the dynamic dependencies in time series experiments. To address both limitations simultaneously, we next propose a transformer reinforcement learning (RL) approach which leverages transformers to condition allocation on the entire history and employs RL to directly optimize the MSE without relying on restrictive assumptions. Empirical evaluations on synthetic data, a publicly available dispatch simulator, and a real-world ridesharing dat
Between nationalism and transnationalism: media and digital platform regulation in the post-public sphere
No full textNormative database of retinal nerve fiber layer thickness in a caucasian pediatric population
Get PDFPurpose: Here, we aimed to obtain normative data for the retinal nerve fiber layer thickness in the peripapillary area (p-RNFL) using the spectral domain optical coherence tomography (SD-OCT) in healthy Caucasian children using the OCT Spectralis instrument. Methods: Caucasian patients of our hospital 5–15 years with spherical equivalent refraction of ±2diopters, physiological ocular findings, delivered at gestational age ≥38 weeks, whose legal guardians volunteered with their participation in this cross-sectional study and signed informed consent were included. Exclusion criteria were a personal history of toxoplasmosis and other diseases that could potentially affect p-RNFL thickness. Results of 3.5 mm circular p-RNFL scans with automatic calculation of the retinal nerve fiber layer thickness were prospectively collected. Both eyes were measured in each participant and values for the global diameter (G) and average thickness in sixsectors (NS, N, NI, TI, T, TS) were determined and statistically evaluated. Results: 154 patients were included, with a mean age of 11.03 years. We have acquired data forp-RNFL in healthy Caucasian children aged 5–15 years and used them to create a normative database for improving the quality of the interpretation of the p-RNFL results in children. No significant differences between the left and right eyes in the same individuals were detected. However, a negative association between age and p-RNFL thickness, in particular in the NI sector, was revealed. Conclusions: We have created a high-quality normative database that will allow us to accurately interpret the results of p-RNFL measurements in the Caucasian pediatric population
Raising municipal revenue through air rights: a case study of São Paulo, Brazil
Get PDFLand value capture (LVC) can be a powerful tool for local governments to finance urban infrastructure and recover part of the unearned landvalue increases that result from public investments or regulations. This helps ensure that the benefits of urban development are reinvested in the city for the benefit of the wider population. São Paulo, the largest city in Latin America, has been a pioneer in implementing LVC. Over the last two decades, the Brazilian city has deployed multiple mechanisms to capture increases in land value. These include two air right tools: the Charges for Additional Building Rights (OODC) – applied throughout the city – and the Certificates of Additional Construction Potential (CEPACs) – tied to special planning zones called Urban Operations (UOs). Both instruments allow the sale of development rights beyond the basic zoning allowance, with the proceeds earmarked for public infrastructure investment. Between 2004 and 2022, these mechanisms generated more than USD 4.5 billion in revenue, equivalent on average to 8% of the city’s annual property tax revenue. Although both instruments aim to monetise “air rights”, their design and impact differ substantially. Drawing on descriptive analysis of administrative and survey data, as well as interviews with developers and policymakers, this case study examines how the two instruments work on the ground, including how they perform in terms of revenue generation, investment, and urban development outcomes. The discussion highlights key considerations and lessons for other cities contemplating the adoption of air rights