HEC Paris

About: HEC Paris is a education organization based out in Jouy-en-Josas, France. It is known for research contribution in the topics: Investment (macroeconomics) & Market liquidity. The organization has 584 authors who have published 2756 publications receiving 104467 citations. The organization is also known as: Ecole des Hautes Etudes Commerciales & HEC School of Management Paris.

Impact of Average Rating on Social Media Endorsement: The Moderating Role of Rating Dispersion and Discount Threshold

Abstract: This paper examines how a restaurant’s online review ratings affect consumers to endorse deal vouchers sold by the restaurant via social media before they redeem the vouchers. While the effect of the average of review ratings is straightforward, we focus on examining how the effect is moderated by the dispersion of review ratings and the discount threshold set for the group-buying deals. A comprehensive literature review suggests that a large rating dispersion can deliver two different messages to consumers (uncertainty in product quality and uniqueness of product taste) and thus may either positively or negatively moderate the effect of average rating on social media endorsement. Discount threshold may serve as a quality signal, reinforcing the effect of average rating. The empirical results show that the effect of average rating is greater when review ratings are more dispersed and the discount threshold is relatively large. The findings generate important managerial and research implications. The onlin...

Stochastic equity volatility and the capital structure of the firm

Abstract: This paper develops a general model for equity volatility when the firm is financed by equity, debt and any other financial instruments like warrants and convertible bonds. The stochastic nature of equity volatility is endogenous and comes from the impact of a change in the value of the firm’s assets on the financial leverage. We first present the basic model to value corporate securities, which is an extension of the Black-Scholes model. Then, we are able to propose an analytic approximation for equity volatility, which is shown to be extremely precise. Finally, we study the behaviour of equity volatility when the firm is financed by equity and debt.

New Experimental Evidence on Expectations Formation

Abstract: In this paper, we measure belief formation in an experimental setting where agents are incentivized to provide accurate forecasts of a random variable, drawn from a stable and simple statistical process. Using these data, we estimate an empirical model that builds on the recent literature on expectation dynamics: It nests rational expectations, but also allows for extrapolation and under-reaction. Our findings are threefold. First, the rational expectation hypothesis is strongly rejected in our setting. Second, both extrapolation and underreaction patterns are statistically discernible in the data, but extrapolation quantitatively dominates. Third, our model coefficients are very robust to changes in experimental setting: They do not depend on process parameters, individual characteristics or framing. These large and stable deviations from rationality occur even though the forecasting exercise is simple and transparent.

Using Biomass to Achieve European Union Energy Targets—A Review of Biomass Status, Potential, and Supporting Policies

Abstract: In an effort to monitor its ambitious energy targets toward a “green Europe,” the European Commission has set up a project to enhance the availability, completeness, and quality of data regarding Green Energy Technologies. The Scientific Reference System (SRS) established in the framework of this project intends to support better-informed decisions. In this paper, we discuss the information gathered regarding energy from biomass by using the SRS methodology. First, the SRS approach is summarized and following that we present the findings of the research conducted by analyzing the data regarding biomass, with focus on energy policy frameworks.