REGULATION VIA THREATS: POLITICS, MEDIA COVERAGE, AND OIL PRICING DECISIONS

Using the oil crisis of the late 1970s as a case study, we examine,the intertwined influences of public opinion and media attentionon the credibility of regulatory threats. We focus on threefactors: the intensity of public demands for regulatory intervention,the extent to which there are other competing demands on legislativeattention, and the availability of scapegoats external to theindustry. We use television news coverage of various topicsto measure these three factors. We hypothesize that firms threatenedwith potential regulation restrained price increases, with thelargest and most publicly visible firms exercising the greatestrestraint. We find that large, visible oil firms restrainedprice increases for the most important decontrolled prodicts(diesel fuel oil) when media coverage of the oil industry wasextensive. These firms exercised less restraint when the governmentwas busy with other issues or when political instability inthe Middle East offered an external rationale for oil priceincreases.     

Other Voices

This column is devoted to informing VGQ readers of important articles in other journals. All articles are published by the American Personnel and Guidance Association unless otherwise noted. Single copies of back issues may be ordered from APGA Publication Sales, Two Skyline Place, Suite 400, 5203 Leesburg Pike, Falls Church, Va. 22041.     

The Contard Affair: Private Power,State Control,and Paternal Authority in Fin‐de‐Siècle France

This paper examines how the suicide of a teenager illuminated a longstanding ideological divide in fin‐de‐siècle France. Five days after his arrival at the Maison Paternelle, an internationally renowned, privately‐operated establishment for bourgeois boys, Gaston Contard committed suicide. The suicide was quickly sensationalized in the press and resulted in a wide‐ranging investigation by public prosecutors who charged the institution's director with illegal imprisonment. Although acquitted, this was a pyrrhic victory as the event marked a critical turning point in the relationship between private power, state control and paternal authority as it pertained to the incarceration and socialization of troubled youths.     

STRUCTURAL EFFECTS AND INDIVIDUAL ATTITUDES: RACIAL PREJUDICE IN ENGLISH CITIES

Responses to a questionnaire concerning attitudes of Englishcitizens toward "colored immigrants" provided the data for thefollowing analysis of the differential impact of social contexton individual opinion.     

Effects of Media, Communicator,and Message Position onAttitude Change

This study examines the effects of medium, communicator, andmessage content on the persuasiveness of a communication. Subjectsreceived either a television, radio, or written presentationwhich either agreed or disagreed with their initial position.The communicator was either a political candidate, a representative,a former representative, or a newscaster. The results indicatedthat the newscaster and former representative were consideredmost trustworthy, the representative next most trustworthy,and the candidate least trustworthy. Although there was no maineffect for medium, the medium did interact with the source variable.Overall, television was the most effective medium for the newscasterand former representative but the least effective for the candidate.     

Reading the Tea Leaves—Did Citigroup Risk Their Reputation During 2004–2005?Presented at ICAA's Second International Conference Globalization – The Good Corporation June 26–28, 2007 Baruch College,New York City

In this paper, we challenge the conventional wisdom that high‐quality news reports of questionable corporate business practices will stimulate various marketplace negative responses, which in turn, will pressure management to undertake actions designed to protect the organization's reputation. Analysis is confined to a relatively brief period of bad news relating to Citigroup, Inc. We conclude that while none of the expected negative marketplace responses are evident in widely available news sources, the CEO did exhibit significant concern and instituted a targeted reputation risk management program. In the absence of a concerned CEO, analysts should not, we suggest, expect a management team to respond with reputation‐enhancing corrective action solely as a reaction to negative publicity regarding questionable business practices.     

SPECULATIVE INTENSITY AND SPOT AND FUTURES PRICE VARIABILITY

This paper develops a simultaneous stochastic rational-expectations model of futures- and spot-price determination. Using the model, we find that increases in what we term speculative intensity increase spot-price variability arising from storage-cost shocks, but decrease spot-price variability arising from demand shocks. In contrast, increases in speculative intensity unambiguously decrease futures-price variability, regardless of the underlying source of disturbances. We are able to develop these comparative-static results because the model has a unique equilibrium.