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The effect of customers’ forward-looking behavior on firms’ profit has been highlighted by many researchers and practitioners. This study aims to develop a mathematical model for new generation products to analyze the optimal pricing and advertising policies in the presence of homogeneous forward-looking customers. A firm that produces and sells a new generation product was considered. This firm aimed to determine the optimal pricing and advertising expenditure by maximizing the total profit.

The demand was presented as a diffusion model inspired by the Bass diffusion model. This paper used Pontryagin’s maximum principle to analyze the proposed model. The presented model was implemented in some numerical examples by proposing a heuristic solution method. Numerical examples confirmed the theoretical results.

This paper found a threshold on the optimal advertising policy depends on customers’ forward-looking behavior, advertising coefficient (both direct and word-of-mouth advertising) and discount rate. The funding showed that the optimal pricing path of the first generation was monotonically decreasing or increasing and, then, decreasing. Results revealed that, by increasing the customers’ forward-looking behavior, the firm should reduce the price and advertising expenditure. Also, the price was shown to be negatively affected by the discount rate and word-of-mouth advertising. The profitability will improve if the firm spends more budget on advertising by increasing the discount rate and advertising effectiveness. Further, when the word-of-mouth advertising effect is high, the firm should increase the advertising expenditure first and, then, decrease it.

Nowadays, forward-looking customers’ anticipation for releasing a new generation can harm the firms’ profit. In this regard, this research analyzed optimal pricing and advertising policies for a new generation product in a market populated by homogeneous forward-looking customers. To the best of the knowledge, this is the first study that investigated these two marketing policies jointly in the presence of forward-looking customers.

This paper aims to investigate the optimal price and service rate decisions in a customer-intensive service, where customers’ perceived service quality decreases in the service speed. Customers are assumed to be forward-looking in purchase decision-making and heterogeneous in their reservation utilities. The purpose of this paper is to study the impact of customers’ forward-looking behavior and the heterogeneity on the operational decisions in a customer-intensive context.

The service is delivered through an M/M/1 queue system with unobservable queues. Customers are forward-looking in queue joining decisions, where the purchase decisions are made when the expected utility is greater than the reservation utility. The optimal price and service rate decisions are analyzed with both homogeneous and heterogeneous customers, where homogenous customers have the same reservation utility in purchase decision-making, while heterogeneous customers have different reservation utilities, which are captured by a random variable.

The optimal price and service rate decisions with forward-looking customers depend on the customer intensity, potential market size and customers’ reservation utility distribution. The results suggest that customers’ heterogeneity in terms of their reservation utilities affects the optimal decisions, market coverage and the expected revenue. Service providers need to take customers’ heterogeneity and the forward-looking behavior into operational decision-making.

This paper extends previous studies in customer-intensive service and contribute to the service operations management area by explicitly incorporating customers’ forward-looking behavior and heterogeneity in purchase decision-making. Assuming customers are forward-looking and heterogeneous is more realistic and practical. The results highlight that knowing customers’ behavioral characteristics can better improve decision-making in service operations, which is critical for enhancing customers’ satisfaction and loyalty, thus critical to a firm’s success in the market with intensive competition.

We examine a two-period, homogeneous product duopoly model. Consumers choose the supplier that demands the lowest two-part tariff payment. When per unit rates are given, firms’ competition in fixed fees leads to an endogenous segmentation of the market, with positive profit for both firms and consumers self-selecting according to their usage levels. Consumers’ usage levels vary between periods but switching suppliers is costly. Examining various possibilities (including price discrimination between old and new customers) reveals that switching affects the two suppliers asymmetrically, as the average usage level of a firm’s clientele changes.

It is argued that addicts, as people in general, are forward-looking and that they try to make the best of what they have got. However, this does not imply that they are fully rational. Cognitive defects, instabilities in preferences, and irrationalities in the form of wishful thinking and dynamical inconsistency play an important role in addictive behaviours. These “imperfections” in people's rationality may not have very large consequences in the case of ordinary goods, but their effect can be dramatic in relation to addictive goods. In the first part of the paper, the rational addiction theory and the empirical evidence that have been presented in support of the theory is reviewed. Regarding the conventional tests of the theory by econometric methods, it is argued that the tests are misguided, both theoretically and methodologically. Furthermore, it is claimed that the definition of addiction implicit in the rational addiction theory is unrealistic, and that the theory makes unrealistic assumptions about human nature. Some empirical evidence for these claims is reviewed. It is concluded that although the theory has its virtues, it faces serious problems and must be rejected in its original form. Secondly, the socio-cultural embeddedness of addictive behaviours, and the social roots of individual preferences, are discussed. These issues are more or less ignored in rational addiction theory. It is argued that we cannot expect to obtain a proper understanding of many addictive phenomena, unless they are seen in their proper socio-cultural context.

This paper aims to investigate the attributes and information content of risk reporting in two different institutional and regulatory, namely, Canadian and German, settings during the period surrounding the financial crisis of 2008.

For a matched sample of manufacturing firms in the period 2006–2010, this study conducts a detailed content analysis of annual reports to assess and compare the volume and patterns of risk disclosures. Panel regressions are used to explore how risk disclosures related to corporate risk proxies and performance indicators.

Over the sample period, Canadian and German firms increase the volume but largely maintain the patterns of risk disclosures. Risk disclosures relate to corporate risk proxies but are not incrementally informative to assess firm performance.

The paper contributes to research on risk reporting by providing detailed cross-country evidence for a period particularly shaped by significant risk. The findings have implications for the regulation and usefulness of risk reporting.

This paper provides an objective approach based on available market information capable of reducing subjectivity, inherently present in the process of expected loss provisioning under the IFRS 9.

This paper develops the two-step methodology. Calibrating the Credit Default Swap (CDS)-implied default probabilities to the through-the-cycle default frequencies provides average weights of default component in the spread for each forward term. Then, the impairment provisions are calculated for a sample of investment grade and high yield obligors by distilling their pure default-risk term-structures from the respective term-structures of spreads. This research demonstrates how to estimate credit impairment allowances compliant with IFRS 9 framework.

This study finds that for both investment grade and high yield exposures, the weights of default component in the credit spreads always remain inferior to 33%. The research's outcomes contrast with several previous results stating that the default risk premium accounts at least for 40% of CDS spreads. The proposed methodology is applied to calculate IFRS 9 compliant provisions for a sample of investment grade and high yield obligors.

Many issuers are not covered by individual Bloomberg valuation curves. However, the way to overcome this limitation is proposed.

The proposed approach offers a clue for a better alignment of accounting practices, financial regulation and credit risk management, using expected loss metrics across diverse silos inside organizations. It encourages adopting the proposed methodology, illustrating its application to a set of bond exposures.

No previous research addresses impairment provisioning employing Bloomberg valuation curves. The study fills this gap.

The purpose of this study is to examine the impact of firm financial and operational characteristics on the level of forward-looking information disclosure (FLID) by Egyptian-listed non-financial companies. The present research also aims to investigate the moderating role of gender diversity on the board of directors.

The sample incorporates the non-financial companies included in the EGX 100 of the Egyptian Stock Exchange (ESE), whose reports were available during the study period from 2013 to 2018. The final sample comprises 49 companies with 294 observations. Statistical analysis is performed using multiple regression analysis.

This study found a significant positive impact of return on assets, leverage, company size and age on the level FLID, while external audit firm type and industry were found to impact the level of FLID negatively. Further, the board gender diversity (BGD) is found to have a moderating impact as it strengthens the effect of financial and operational characteristics on the level of FLID.

The present study has some implications for Egyptian companies, investors in the Egyptian market and regulators in emerging economies, which include paying more attention to BGD when selecting the board members by companies as well as following up the female representation in all the listed companies by regulators.

To the best of the authors’ knowledge, this is the first study to investigate the moderating role of BGD and its impact on the level of FLID in emerging markets. This extends the disclosure literature as the present study brings new evidence from an emerging market regarding BGD moderating role as early research concentrated on the direct impact of BGD on the level of FLID.

The purposes of this paper are: firstly, to assess the disclosure related to climate change (CC) by major European banks to understand if the banks have grasped the most substantive aspects of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and secondly, to evaluate the contribution of a non-traditional committee (i.e. corporate social responsibility (CSR) committee) to TCFD-compliant disclosure.

Using content analysis and ordinary least squares regressions on a sample of 101 European banks, this study sought to investigate completeness, tone and forward-looking orientation of CC disclosure and explore the relationships between CSR committee and previous disclosure aspects.

This study shows that European banks have been able to reach an intermediate level of adequacy of compliance in terms of completeness of information but forward-looking orientation seems to be the aspect that needs the most improvement. The existence of a CSR committee dedicated to sustainability issues seems to constitute the difference between the banks in terms of disclosure. The results highlight vulnerabilities in disclosure and board characteristics relevant for improving CC disclosure.

Firms interested in strengthening stakeholder engagement and capturing strategic opportunities involved in CC should be encouraged to establish a CSR committee and appoint female directors in financial companies. This paper should be of interest to policymakers, governance bodies and boards of directors considering the initiative of corporate sustainable governance complementary to Directive 2014/95/EU on non-financial reporting by the European Commission.

To the best of the authors’ knowledge, no prior study has investigated the relationship between the CSR committee and the application of the TCFD’s recommendations in the European banking industry.

Expectations play a crucial role in finance, macroeconomics, monetary economics, and fiscal policy. In the last decade a rapidly increasing number of laboratory experiments have been performed to study individual expectation formation, the interactions of individual forecasting rules, and the aggregate macro behavior they co-create. The aim of this article is to provide a comprehensive literature survey on laboratory experiments on expectations in macroeconomics and finance. In particular, we discuss the extent to which expectations are rational or may be described by simple forecasting heuristics, at the individual as well as the aggregate level.