Abstract The proliferation of electronic limit order books operating without dealers raises questions regarding the need for intermediaries with affirmative obligations to maintain markets. We develop a simple model of dealer participation and test it using a sample of less liquid firms that trade on the Paris Bourse. The results indicate that firms with designated dealers exhibit better market quality, and that younger firms, smaller firms, and less volatile firms choose a designated dealer. Around the announcement of dealer introduction, stocks experience an average cumulative abnormal return of nearly 5% that is positively correlated with improvements in liquidity. Overall, these findings emphasize the potential benefits of designing better market structures, even within electronic limit order books, and suggest that purely endogenous liquidity provision may not be optimal for all securities.

This study uses unobtrusive measures of the narcissism of chief executive officers (CEOs)—the prominence of the CEO's photograph in annual reports, the CEO's prominence in press releases, the CEO's use of first-person singular pronouns in interviews, and compensation relative to the second-highest-paid firm executive—to examine the effect of CEO narcissism on a firm's strategy and performance. Results of an empirical study of 111 CEOs in the computer hardware and software industries in 1992–2004 show that narcissism in CEOs is positively related to strategic dynamism and grandiosity, as well as the number and size of acquisitions, and it engenders extreme and fluctuating organizational performance. The results suggest that narcissistic CEOs favor bold actions that attract attention, resulting in big wins or big losses, but that, in these industries, their firms' performance is generally no better or worse than firms with non-narcissistic CEOs.

Scholars of religion have long known that women are more religious than men, but they disagree about the reasons underlying this difference. Risk preference theory suggests that gender gaps in religiosity are a consequence of men's greater propensity to take risks, and that irreligiosity is analogous to other high-risk behaviors typically associated with young men. Yet, research using risk preference theory has not effectively distinguished those who perceive a risk to irreligiousness from those who do not. In this article, we evaluate risk preference theory. We differentiate those who believe in an afterlife, who perceive a risk to irreligiousness, from nonbelievers who perceive no risk associated with the judgment after death. Using General Social Survey and World Values Survey data, multivariate models test the effects of gender and belief on religiousness. In most religions and nations the gender gap is larger for those who do not believe in an afterlife than for those who do, contradicting the predictions of risk preference theory. The results clearly demonstrate that the risk preference thesis is not a compelling explanation of women's greater average religiosity.

This research demonstrates the strong influence of disgust in a consumer context. Specifically, it shows how consumer evaluations may change in response to physical contact with products that elicit only moderate levels of disgust. Using evidence from six studies, the authors develop a theory of product contagion, in which disgusting products are believed to transfer offensive properties through physical contact to other products they touch, thus influencing evaluations.

To study the effects of new information technologies (IT) on productivity, we have assembled a unique data set on plants in one narrowly defined industry—valve manufacturing—and analyze several plant-level mechanisms through which IT could promote productivity growth. The empirical analysis reveals three main results. First, plants that adopt new IT-enhanced equipment also shift their business strategies by producing more customized valve products. Second, new IT investments improve the efficiency of all stages of the production process by reducing setup times, run times, and inspection times. The reductions in setup times are theoretically important because they make it less costly to switch production from one product to another and support the change in business strategy to more customized production. Third, adoption of new IT-enhanced capital equipment coincides with increases in the skill requirements of machine operators, notably technical and problem-solving skills, and with the adoption of new human resource practices to support these skills.

Does attendance affect performance in college economics courses? David Romer (1993) found that attendance did contribute significantly to the academic performance of students in a large intermediate macroeconomics course that he taught in the fall of 1990. (See the Summer 1994, Journal of Economic Perspectives [vol. 8, no. 3, pp. 205-15] for numerous comments on Romer.) This conclusion held even after controlling for student motivation which, it may be argued, is the true factor determining performance and is only approximated by attendance. An earlier study by Kang Park and Peter Kerr (1990) found that attendance was a determinant of student performance in a money and banking course, but not as important as a student's GPA and the percentile rank on a college entrance exam. A study by Robert Schmidt (1983) reported that time spent attending lectures contributed positively to performance in a macroeconomic Principles course. On the other side of the ledger is evidence from Neil Browne et al. (1991) showing that students who did not attend a typically structured class with lectures did just as well on the Test of Understanding College Economics (TUCE) as those students who attended a standard microeconomic Principles course. They also reported, however, that those students who attended the lectures performed better on essay questions than those who did not. A similar study by Campbell McConnell and C. Lamphear (1969) found no significant difference in the performance of students with no classroom attendance vis-a-vis those attending class. Finally, Stephen Buckles and M. E. McMahon (1971) found attendance at lectures that simply explained material covered in reading assignments did not enhance students' understanding of economics. In this paper we present new evidence on the effects of class attendance on student performance. Our results pertain to the Principles of Economics course as it is taught in a two-semester sequence at a medium-size, comprehensive state university.

On theoretical grounds, monitoring of top executives by the (supervisory) board is expected to be value relevant. The empirical evidence is ambiguous and we analyze three non-competing explanations for this ambiguity: (i) The positive effect on firm value of board monitoring is hidden in stock price effects due to the simultaneous occurrence of the positive real effect of monitoring and the opposing information effect. (ii) The combination of board monitoring and monitoring by other parties prevents assessing the value relevance of board monitoring in isolation. (iii) The confounding effect of a simultaneous successor appointment typically generates an upward biased estimate. Based on an analysis of price effects and trading volumes at announcement, we conclude that monitoring by the supervisory board is valued by investors: Forced departures of executive directors, also without a successor appointment, are value relevant in the Netherlands where external control mechanisms and shareholder control were virtually absent in the period studied (1991–2000).

This study examines the competitive conditions in the banking industries of eleven Latin American countries for the period 1993–2000. For these countries, the time interval under examination corresponds to an era characterized by substantial reforms to restructure their banking systems, increased consolidation and foreign bank penetration. The banks in our sample are found to be earning their revenues as if operating under monopolistic competition, as in many other developed and emerging financial systems. The results indicate that, overall, market concentration is not significantly related with competitive conduct. At the country level, however, we do observe a decline in competition for Brazil, Chile, and Venezuela in late 1990s which may be attributable to increased consolidation. Further, we observe that deregulation and opening up of the financial markets for foreign participation serves as an important catalyst to increase the competitiveness of banking markets. Higher degree of competition in the sector, in return, is associated with reduced bank margins and profitability but improved cost efficiency.

How people understand the actions of animate agents has been vigorously debated. This debate has centered on two hypotheses focused on anatomically distinct neural substrates: The mirror-system hypothesis proposes that the understanding of others is achieved via action simulation, and the social-network hypothesis proposes that such understanding is achieved via the integration of critical biological properties (e.g., faces, affect). In this study, we assessed the areas of the brain that were engaged when people interpreted and imagined moving shapes as animate or inanimate. Although observing and imagining the moving shapes engaged the mirror system, only activation of the social network was modulated by animacy.