Does ‘better’ discounting lead to ‘worse’ outcomes in long-run decisions? The dilemma of hyperbolic discounting

The shortcomings of conventional discounting, especially in the context of long-run environmental problems, have been extensively discussed in the literature. Recently, hyperbolic discounting, i. e. discounting at declining instead of constant discount rates, has attracted a lot of interest among both scientists and politicians. Although there are compelling arguments for employing hyperbolic discounting, there are also pitfalls, which have to be pointed out. In this paper I show that the problem of time-inconsistency, an inherent characteristics of hyperbolic discounting, leads to a potential clash between economic efficiency and intergenerational equity. As an example, I refer to the weak progress in the controlling of greenhouse gas emissions under the Kyoto protocol. As the problem of time-inconsistency cannot be solved on economic grounds alone, there is a need for an intergenerational moral commitment.

Corporate dividencs and seasoned equity issues: an empirical investigation

This paper investigates whether managers rely on dividends to obtain a higher price in a stock offering and whether the stock price reaction to dividend and offering announcements justifies such a coordination. The evidence does not support either conjecture. Issuing firms are not more likely to pay or increase dividends than nonissuing forms. Moreover, there is little evidence that firms time stock offering announcements right after dividend declarations to befefit from the attendant information disclosure. The analysis of dividend and stock offering announcement effects suggests few if any benefits from linking divbidend and stock offering announcements.

The pricing of equity offerings

Examination of 1,600 seasoned equity offerings reveals little evidence that underwriters systematically set offer prices below the market price on the major exchanges, though they may do so for NASDAQ issues. Quick round-trip transactions in seasoned offerings are not profitable, but subscribing to an offering and holding the stock for 30 days seems to be very profitable, especially in the NASDAQ market. In addition to seasoned offerings, we analyze 250 issues of new classes of preferred stock. These issues are not underpriced.

Social inequality and smoking in young Swiss men: intergenerational transmission of cultural capital and health orientation

OBJECTIVES Smoking is related to income and education and contributes to social inequality in morbidity and mortality. Socialisation theories focus on one's family of origin as regards acquisition of norms, attitudes and behaviours. Aim of this study is to assess associations of daily smoking with health orientation and academic track in young Swiss men. Further, to assess associations of health orientation and academic track with family healthy lifestyle, parents' cultural capital, and parents' economic capital. METHODS Cross-sectional data were collected during recruitment for compulsory military service in Switzerland during 2010 and 2011. A structural equation model was fitted to a sample of 18- to 25-year-old Swiss men (N = 10,546). RESULTS Smoking in young adults was negatively associated with academic track and health orientation. Smoking was negatively associated with parents' cultural capital through academic track. Smoking was negatively associated with health orientation which in turn was positively associated with a healthy lifestyle in the family of origin. CONCLUSIONS Results suggest two different mechanisms of intergenerational transmissions: first, the family transmission path of health-related dispositions, and secondly, the structural transmission path of educational inequality.