Confidence intervals for half-life deviations from purchasing power parity

Existing point estimates of half-life deviations from purchasing power parity (PPP), around 3-5 years, suggest that the speed of convergence is extremely slow. This article assesses the degree of uncertainty around these point estimates by using local-to-unity asymptotic theory to construct confidence intervals that are robust to high persistence in small samples. The empirical evidence suggests that the lower bound of the confidence interval is between four and eight quarters for most currencies, which is not inconsistent with traditional price-stickiness explanations. However, the upper bounds are infinity for all currencies, so we cannot provide conclusive evidence in favor of PPP either. © 2005 American Statistical Association.

Reference groups and product line decisions: An experimental investigation of limited editions and product proliferation

Some luxury goods manufacturers offer limited editions of their products, whereas some others market multiple product lines. Researchers have found that reference groups shape consumer evaluations of these product categories. Yet little empirical research has examined how reference groups affect the product line decisions of firms. Indeed, in a field setting it is quite a challenge to isolate reference group effects from contextual effects and correlated effects. In this paper, we propose a parsimonious model that allows us to study how reference groups influence firm behavior and that lends itself to experimental analysis. With the aid of the model we investigate the behavior of consumers in a laboratory setting where we can focus on the reference group effects after controlling for the contextual and correlated effects. The experimental results show that in the presence of strong reference group effects, limited editions and multiple products can help improve firms' profits. Furthermore, the trends in the purchase decisions of our participants point to the possibility that they are capable of introspecting close to two steps of thinking at the outset of the game and then learning through reinforcement mechanisms. © 2010 INFORMS.

Functional parcellation of attentional control regions of the brain.

Recently, a number of investigators have examined the neural loci of psychological processes enabling the control of visual spatial attention using cued-attention paradigms in combination with event-related functional magnetic resonance imaging. Findings from these studies have provided strong evidence for the involvement of a fronto-parietal network in attentional control. In the present study, we build upon this previous work to further investigate these attentional control systems. In particular, we employed additional controls for nonattentional sensory and interpretative aspects of cue processing to determine whether distinct regions in the fronto-parietal network are involved in different aspects of cue processing, such as cue-symbol interpretation and attentional orienting. In addition, we used shorter cue-target intervals that were closer to those used in the behavioral and event-related potential cueing literatures. Twenty participants performed a cued spatial attention task while brain activity was recorded with functional magnetic resonance imaging. We found functional specialization for different aspects of cue processing in the lateral and medial subregions of the frontal and parietal cortex. In particular, the medial subregions were more specific to the orienting of visual spatial attention, while the lateral subregions were associated with more general aspects of cue processing, such as cue-symbol interpretation. Additional cue-related effects included differential activations in midline frontal regions and pretarget enhancements in the thalamus and early visual cortical areas.