The Pricing Discount for Limited Liquidity: Evidence from SWX Swiss Exchange and the Nasdaq

We investigate the pricing discount for limited liquidity. Unlike previous studies that have examined the relation between histroical returns and liquidity, ours looks directly at current stock prices. This approach requires less data and yields up-to-date information about limited liquidity discounts. We analyze data from the Swiss exchange and the Nasdaq during 1995-2001, and find a statistically and economically significant price-liquidity relation in both markets. We test the robustness of that relation with a procedure that does not rely on specific distributional assumptions. Our findings are unaffected. Accordingly, the discount suffered by the least liquid securities is about 30%.

Reputation Formation and the Evolution of Cooperation in Anonymous Online Markets

Theoretical propositions stressing the importance of trust, reciprocity, and reputation for cooperation in social exchange relations are deeply rooted in classical sociological thought. Today’s online markets provide a unique opportunity to test these theories using unobtrusive data. Our study investigates the mechanisms promoting cooperation in an online-auction market where most transactions can be conceived as one-time-only exchanges. We first give a systematic account of the theoretical arguments explaining the process of cooperative transactions. Then, using a large dataset comprising 14,627 mobile phone auctions and 339,517 DVD auctions, we test key hypotheses about the effects of traders’ reputations on auction outcomes and traders’ motives for leaving feedback. Our statistical analyses show that sellers with better reputations have higher sales and obtain higher prices. Furthermore, we observe a high rate of participation in the feedback system, which is largely consistent with strong reciprocity—a predisposition to unconditionally reward (or punish) one’s interaction partner’s cooperation (or defection)—and altruism—a predisposition to increase one’s own utility by elevating an interaction partner’s utility. Our study demonstrates how strong reciprocity and altruism can mitigate the free-rider problem in the feedback system to create reputational incentives for mutually beneficial online trade.

Social networks, mobility, and exchange systems during the Neolithic and Bronze Age of the Swiss Plateau

Excavations of Neolithic (4000 – 3500 BC) and Late Bronze Age (1200 – 800 BC) wetland sites on the northern Alpine periphery have produced astonishing and detailed information about the life and human environment of prehistoric societies. It is even possible to reconstruct settlement histories and settlement dynamics, which suggest a high degree of mobility during the Neolithic. Archaeological finds—such as pottery—show local typological developments in addition to foreign influences. Furthermore, exogenous lithic forms indicate far reaching interaction. Many hundreds of bronze artefacts are recorded from the Late Bronze Age settlements, demonstrating that some wetland sites were centres of bronzework production. Exogenous forms of bronzework are relatively rare in the wetland settlements during the Late Bronze Age. However, the products produced in the lake-settlements can be found widely across central Europe, indicating their continued involvement in interregional exchange partnerships. Potential motivations and dynamics of the relationships between sites and other regions of Europe will be detailed using case studies focussing on the settlements Seedorf Lobsigensee (BE), Concise (VD), and Sutz-Lattrigen Hauptstation innen (BE), and an initial assessment of intra-site connectivity through Network Analysis of sites within the region of Lake Neuchâtel, Lake Biel, and Lake Murten.

Natural Hedging of Exchange Rate Risk: The Role of Imported Input Prices

In this paper, we estimate ERPT into imported input prices and export prices using disaggregated quarterly trade data for Switzerland over 2004–2011. We find evidence for high pass-through rates into imported input prices. This demonstrates the effectiveness of natural hedging. On the export side, ERPT exhibits substantial sectoral heterogeneity and changes in imported input costs are not transmitted to foreign consumers in most cases. This suggests the use of cheaper imported inputs to offset adverse effects of currency appreciation on export profit margins.