A game theoretic approach to optimize multi-stakeholder utilities for land acquisition negotiations with informality

To combat the critical stresses of rising urbanization, the government acquires land from private owners using the power of eminent domain. This land assembly causes negative externalities such as increasing social tension and injustice that may impose a long-term threat to stability and sustainable development. Therefore, there is a need to make the land acquisition process more transparent and just. Considering the unique Indian context where informality has a strong presence, we propose an approach based on game theory that models the bargain through a three-stage Nash equilibrium game. Four agents – the government, the private developer, the landowner, and the free rider – are considered. We provide conditional solutions for the generalizable Case and proceed to model different stakeholder behavior patterns through two utility functional forms – linear and exponential. In the linear case, we find that the free rider obtains half of the revenue of the project, whereas the landowner gains between one-fourth and one-half of the revenue. Thus, we highlight the undeniably crucial role free riders play in land acquisition negotiations. However, closed form solutions cannot be obtained for the exponential form, due to which we use simulations to demonstrate a solution procedure. We conclude by stating that the proposed model can be useful in formulating future land policies in a sustainable and inclusive manner, with optimal utility derivations for all concerned stakeholders. Our model can also be extended to other spatial contexts where informality features heavily in the land market, especially in the Global South.     

Staring at the Abyss: a neurocognitive grounded agent-based model of collective-risk social dilemma under the threat of environmental disaster

Increasingly visible climate change consequences challenge carbon-based economies worldwide. While expert knowledge on climate change percolates through political initiatives and public awareness, its translation into large-scale policy actions appears limited. Climate change consequences unequally target regions, countries and social classes, a vital issue for social cooperation. When facing an imminent ecological collapse, in which conditions can self-interested agents gain environmental awareness and settle on a sustainable path of actions when their knowledge of the imminent collapse is bounded? This cooperation emerges from the interaction between individuals and the interaction of various cognitive processes within individuals. This article develops an agent-based model for this emergence of cooperation enriched with the Agent Zero neurocognitive grounded cognitive architecture. We investigate when agents endowed with deliberative, affective and social modules can settle on actions that safeguard their environment through numerical simulations. Our results show that cooperation on sustainable actions is the strongest when the system is at the edge of collapse. Policy measures that increase the environment’s resilience become internalized by the agents and undermine awareness of the ecological catastrophe. Depending on the cognitive channels activated, agent behaviors and reactions to specific interventions significantly vary. Our analysis suggests that taking different cognitive channels, deliberative, affective, social, and others into account, significantly impact results. The complexity of agent cognition deserves more attention to assess parameter sensitivity in social simulation models.

     

The Dark Side of Deeply Meaningful Work: Work‐Relationship Turmoil and the Moderating Role of Occupational Value Homophily

How are close personal relationships experienced by people in deeply meaningful work? Drawing upon in‐depth interview data with 82 international aid workers, I offer three distinct contributions. First, I find that people who experience their work as deeply meaningful have high work devotion. I identify boundary inhibition as a mechanism to explain why they participate more willingly in overwork and erratic work, despite giving rise to time‐ and trust‐based conflict in their relationships. Second, I find that people with high work devotion often also experience emotional distance in their personal relationships when their close others don’t value their work – a context I call occupational value heterophily. This disconnection‐based conflict compounds the time‐ and trust‐based conflict and engenders an emotionally agonizing situation, which I call work‐relationship turmoil. Third, when close others do value their partner’s work – a context I call occupational value homophily – it fosters an emotional connection and offers an avenue for work‐relationship enrichment. These findings draw upon deeply meaningful work to detail the multi‐faceted work‐relationship experience among those with high work devotion.     

“When Should Manufacturers Want Fair Trade?”: New Insights from Asymmetric Information when Supply Chains Compete

We study a model of competing manufacturer/retailer pairs where adverse selection and moral hazard are coupled with promotional externalities at the downstream level. In contrast to earlier models mainly focusing on a bilateral monopoly setting, we show that with competing brands a ‘laissez‐faire’ approach towards vertical price control might not always promote productive efficiency. Giving manufacturers freedom to control retail prices is more likely to harm consumers when retailers impose positive promotional externalities on each other, and the converse is true otherwise. Our simple model also suggests that, with competing supply chains, consumers and manufacturers might prefer different contractual modes if promotional externalities have substantial effects on demands.     

Why demotion of older workers is a no-go area for managers

Abstract

Demotion – the reduction of an employee’s rank and salary – is often mentioned by managers and policy-makers as a means of increasing the employability of older workers in an ageing labour force. However, so far in practice demotion is rarely applied. This paper is the first empirical investigation of how managers perceive demotion as an instrument of human resource management. By means of a survey and a vignette study among managers in the Netherlands (N = 355), we examine whether managers consider demotion of poorly performing older workers a fair solution. Three contributions stand out. First, based on attribution theory we find support for the hypothesis that managers judge demotion to be fair in those cases where deterioration in task performance is caused by controllable factors (such as work motivation) and unfair when the causes are uncontrollable (such as age). Second, the expectations of managers about the organization-wide consequences of introducing demotion as a human resource policy play a significant role in considering demotion. Most managers perceive negative organizational externalities (e.g. decrease in loyalty and motivation of staff) to arise when introducing demotion and are reluctant to apply demotion in practice. And a third contribution: positive (negative) beliefs of managers about the hard skills – e.g. creativity, willingness to learn, flexibility – of older workers make demotion less (respectively more) likely.     

Organizational scandal on social media: Workers whistleblowing on YouTube and Facebook

The paper explores the emergence of organizational scandals on social media, and how the communicative dynamics of such scandals evolve as a social drama. I propose that when whistleblowers utilize information technologies to expose evidence of organizational misconduct, they, and their audiences, engage in meta- organizational discourse: The reflexive – immediate and durational – interactions through which organizational stakeholders instigate organizational scandals on social media, negotiate the normative boundaries of whistleblowing, and (de)legitimize the act of disclosing managerial transgressions online. I examine an organizational scandal embedded in the recent wave of workers’ unionization struggles in Israel in which whistleblowers performed the role of investigative journalists by posting a video on YouTube exposing a senior manager trying to dissuade workers from joining the union. Following that, on workers’ unionization Facebook pages, union supporters and opponents vigorously deliberated the intentions and consequences of publicly shaming their manager and damaging the reputation of their company. Analyzing workers’ discourse suggests that participants from both sides experienced the scandal as something that affected all company employees. They acknowledged the high visibility of their social drama and recognized the potential impact of whistleblowing online across organizational spatial and temporal boundaries.     

Under-connected and over-connected networks: the role of externalities in strategic network formation

Since the seminal contribution of Jackson and Wolinsky (J Econ Theory 71(1):44–74, 1996) it has been widely acknowledged that the formation of social networks exhibits a general conflict between individual strategic behavior and collective outcome. What has not been studied systematically are the sources of inefficiency. We approach this omission by analyzing the role of positive and negative externalities of link formation. This yields general results that relate situations of positive externalities with stable networks that cannot be “too dense” in a well-defined sense, while situations with negative externalities tend to induce “too dense” networks. Those results are neither restricted to specific assumptions on the agents’ preferences (e.g. homogeneity), nor to a specific notion of stability or efficiency.     

Swap-flexibility in the assignment of houses

A house allocation rule should be flexible in its response to changes in agents’ preferences. We propose a specific notion of this flexibility. An agent is said to be swap-sovereign over a pair of houses at a profile of preferences if the rule assigns her one of the houses at that profile and assigns her the other house when she instead reports preferences that simply swap the positions of the two houses. A pair of agents is said to be mutually swap-sovereign over their assignments at a profile if the rule exchanges their assignments when they together report such ‘swap preferences’. An allocation rule is individually swap-flexible if any pair of houses has a swap-sovereign agent, and is mutually swap-flexible if any pair of houses has either a swap-sovereign agent or mutually swap-sovereign agents. We show for housing markets that the top-trading-cycles rule is the unique strategy-proof, individually rational and mutually swap-flexible rule. In house allocation problems, we show that queue-based priority rules are uniquely strategy-proof, individually swap-flexible and envy non-bossy. Varying the strength of non-bossiness, we characterise the important subclasses of sequential priority rules (additionally non-bossy) and serial priority rules (additionally pair-non-bossy and pair-sovereign).     

The Bribery Paradox in Transition Economies and the Enactment of ‘New Normal’ Business Environments

We develop a novel, sense-making perspective on corruption in transition economies. Prior research has focused on understanding why some entrepreneurs are more likely to pay bribes than others. It typically assumes that paying bribes will lead to an intended – albeit unfair – competitive advantage. We challenge this assumption and uncover a bribery paradox: drawing upon sense-making logic, we argue that beyond gaining an immediate benefit from bribing, entrepreneurs who frequently pay bribes may in the longer run be enacting a ‘new normal’ business environment perceived as high in obstacles, especially in transition countries. As sense making is grounded in identity construction and one’s social context, we argue that owners of family firms will be especially vulnerable to the dangers of perceiving greater obstacles over time and enacting an obstacle-ridden ‘new normal’ business environment. We find empirical support for our framework on a sample of 310 privately held small and medium-sized enterprises (SMEs) from 22 transition economies.     

Fair division of a measurable space

A given total product is said to be divided up fairly among N agents, if this division is Pareto optimal and equitable (i.e., every agent subjectively feels himself to be better off than any one of the others). Describing tastes of agents as measures on a measurable space, standing for total product, it is proved that fair divisions exist.     

Do social enterprises attract workers who are more pro-socially motivated than their counterparts in for-profit organizations to perform low-skilled jobs?

Abstract

The literature highlights that social enterprises (SEs) attract workers who are motivated to help others and to meet the social aims in which they believe. However, this assumption is challenged in the case of low-skilled jobs. Therefore, we have performed an empirical study in the quasi-market of service vouchers in Belgium to know if SEs attract workers who have a different motivational profile than their counterparts in for-profit organizations (FPOs) to perform low skilled jobs (N = 217). No significant differences were found. Next, we have compared FPOs with two types of social enterprises, Home Care Services Organizations (HCSOs) and Work Integration Social enterprises (WISEs), and again no significant differences were found for the whole sample. However, it seems that a selection effect exists in WISEs when the sample is reduced to people who were not previously unemployed. In others words, when WISEs deviate from their initial mission of ‘hiring the most vulnerable people on the labor market’, it is only to hire workers whose are highly motivated to achieve the organization’s mission and who fit with the values defended by the organization.     

WHICH AGGLOMERATION EXTERNALITIES MATTER MOST AND WHY?

This paper revisits the ongoing discussion on the importance of agglomeration externalities – specifically specialization, diversity and competition effects – that may contribute to innovation, productivity and urban employment growth. Previous meta‐analyses suggested that the evidence on agglomeration externalities is strongly context‐specific. Expanding an earlier analysis of 31 articles, we seek to draw in this paper more robust conclusions by means of the statistical evidence for agglomeration externalities presented in 73 scientific articles, all building on the seminal work of Glaeser et al. (1992). Our results confirm that the heterogeneity among studies is huge and can only be partially accounted for by means of an ordered probit analysis. Additionally, some evidence of publication bias is found. We conclude that the conventional lines of inquiry in this literature may now have reached strongly diminishing returns. New lines of inquiry, using rich micro‐level data on firms and workers, dynamic general equilibrium models at the macro level, more attention for spatial and temporal variation in the impacts of agglomeration, and further investigations into the spatial scope of externalities are promising avenues for further research that can enhance our understanding of how agglomeration externalities continue to fuel our increasingly urbanized world.     

A Bayesian analysis of suicide data

The identification of change points in a sequence of suicide rates is one of the fundamental aspects of Durkheim’s theory. The specification of a statistical standard suitable for this purpose is the main condition for making inferences about the causes of suicide with distinctive trends of persistency and variability just as Durkheim theorized. At present, the statistical ‘strategy’ employed by the French social scientist is too ‘rudimentary’. A hundred years later, I take the opportunity to test Durkheim’s theory through modern methodological instruments, specifically the Bayesian change-point analysis. First of all, I analyzed the same suicide data which Durkheim took into consideration. Change-point analysis corroborates the Durkheimian analysis revealing the same change-points identified by the author. Secondly, I analyzed Italian suicide rates from 1864 to 2005. The change-point analysis was very useful. Durkheim’s theory ‘works’ until 1961: suicides rates increased as industrial development increased. However, after 1961 and the economic boom, they declined, and when they began increasing again, after 1984, they did not reach the same level as before. This finding obliges us to ‘adjust’ the Durkheim’s theory giving space to Halbwach’s convergence law. Therefore, as high economic and social development levels are attained, suicide rates tend to level-off: People adapt to the stress of modernization associated to low social integration levels. Although we are more ‘egoist’, individualism does not destroy identity and the sense of life as Durkheim had maintained.     

Antibody tests: They are more important than we thought

Antibody testing is a non-pharmaceutical intervention – not recognized so far in the literature – to prevent COVID-19 contagion. I show this in a simple economic model of an epidemic in which agents choose social activity under health state uncertainty. In the model, susceptible and asymptomatic agents are more socially active when they think they might be immune. And this increased activity escalates infections, deaths, and welfare losses. Antibody testing, however, prevents this escalation by revealing that those agents are not immune. Through this mechanism, I find that antibody testing prevents about 12% of COVID-19 related deaths within 12 months.     

Human resource management and organizational strategies in German- and US-owned companies

The development of the international economy over the past twenty years has bred considerable diversity in the form and substance of employment relations (labour-management relations, human resource management practices) throughout the world. Cases of ‘social partnership’ are today found in the ‘free market’ United States economy; some companies operating in Germany's ‘social’ market economy are rejecting traditional forms of social partnership in the name of more unilateral strategies.

This paper examines (a) the extent to which ‘strategic diversity’ – variation in human resource strategies and policies – is possible within the heavily institutionalized, co-operative and codeterminative German economy, and (b) how managers perceive the effects of different kinds of HR approaches on organizational change and industrial adjustment. It is based on empirical evidence drawn from seven large chemicals companies operating in Germany – three of them US-owned firms and four German-owned.

The main conclusions are that considerable strategic diversity is possible within the German context, and that managers perceive distinct costs and benefits to specific aspects of the typically American ‘unilateral’ style and the more German ‘negotiated’ approach to structuring the relationship with human resources. The paper concludes with a discussion of the implications of these trade-offs for the transferability of HR strategies across international borders, giving special attention to policies to avoid some of these potential costs.     

Collaborator or competitor: assessing the evidence supporting the role of social enterprise in health and social care

In many countries, social enterprise has been introduced into a competitive market-oriented environment as a substitute for publicly owned services, particularly in healthcare. In the United Kingdom, evidence for this move seems to derive from case studies where social enterprise operates in collaboration – as opposed to competition – with publicly owned services. Our systematic review demonstrates that there is no evidence to support the role of social enterprise as a substitute for publicly owned services. However, there is evidence to show that where social enterprise operates in a collaborative environment, enhanced outcomes can be achieved, such as connectedness, well-being and self-confidence.     

Social network influence and market instability

Models of social networks depict individuals’ dependency. They offer a systematic way to capture the connectedness and opinion formations in the complex web of interpersonal influences. This paper studies price stability of a capital market, where the dynamics of participants’ opinion formations is formalized using social network models. Stability condition is derived. It is also identified how network structures are important in communications and in determining market stability. It is found that factors of highly-connected networks and balanced weight allocation on information sources can in fact be stabilizing. In applications, this study supports the view that the key to reduce the volatility behaviour of emerging-market securities lies in the development of an efficient investor base. It is suggested that one way to achieve this is by broadening and diversifying both the international and domestic investor categories for the underlying market.     

Causality in social theory via linguistic fuzzy logic

I present a new approach to the study of causality in social theory using linguistic fuzzy logic as a framework. This approach differs from conventional analysis of causality on two fronts. First, all variables are considered to possess two degrees of freedom (or variation): a linguistic nuance value, which corresponds to what we conventionally refer to as interval or categorical value, and a linguistic truth value, which measures our confidence level in this nuance value. Second, combining this double fuzzification of variables with linguistic fuzzy logic I propose new tools for studying fuzzy causality. The linguistic fuzzy logic approach is illustrated through a re-examination of Skocpol’s (1979, States and social revolutions: a comparative analysis of France, Russia, and China. Cambridge University Press, Cambridge) theory of social revolution.     

Survival of entrepreneurial firms: the role of agglomeration externalities

This paper analyzes the role of various types of agglomeration externalities on the survival rate of entrepreneurial firms. In particular, we trace the population cohort of newly-established and self-employed Swedish firms in the Knowledge-Intensive Business Service sector in 1997 up to 2012 and investigate the role of Marshallian and Jacobian externalities on the survival of these firms. We find that only Jacobian externalities (diversity) is positively associated with the survival of entrepreneurial firms. Not all Jacobian externalities matter though. Only the higher the ‘related variety’ of the region in which an entrepreneurial firm is founded, the higher will be the survival chance of the firm, while ‘unrelated variety’ barely has any significant correlation. The result is robust after controlling for extensive firm characteristics and individual characteristics of the founders. The main message here is: for a newly-established entrepreneurial firm, not only it matters who you are, but also where you are.     

Should banks diversify or focus? Know thyself: The role of abilities

The paper investigates whether diversification/focus across assets, industries and borrowers affects bank performance when banks’ abilities (screening and monitoring) are considered. The initial results show that diversification (focus) at the asset, industry and borrower levels is expected to decrease (increase) returns. However, once banks’ screening and monitoring abilities are controlled for, the effect of diversification/focus either gets weaker or disappears. Further, in some cases, these abilities enhance banks’ long-run performance, but in others they prove to be costly, at least, in the short run. Thus, the level of monitoring and screening abilities should be taken into consideration in understanding, planning and implementing diversification/focus strategies.