Admissibility of generalized Bayes estimators in an one parameter nonregular family

Consider an estimation problem under squared error loss in an one parameter nonregular family of distributions with the lower endpoint of the support depending on an unknown parameter. Using Karlin's ([3]) method, sufficient conditions are given for generalized Bayes estimators to be admissible for estimating an arbitrary nonnegative, differentiable, monotone parametric function. The results are then applied to the case when both endpoints of the support of the distribution depend on the parameter . Finally, some examples are subsequently given.Research supported by a grant from Hanyang University, 1989.     

Across the threshold: Role of performance and compatibility in innovative new products' market penetration

Both academicians and practitioners agree that there exists a critical threshold to cross for an innovative new product to be able to achieve ultimate market penetration. In this article, the authors characterize the threshold as depending upon innovation characteristics: performance and compatibility, in particular. Based on the insights from evolutionary games, several numerical simulations are conducted to investigate how the critical threshold changes as each parameter representing the innovation characteristics undergoes a change. The analysis results confirm that relative advantage and compatibility are of critical influence in impacting the threshold and thus the successful market entry. Moreover, the effect size was different depending on the size of the firm's proprietary customer base. Based on the findings, discussion on new product design strategies for companies having different market positions (i.e., new start-up firms, established firms, and incumbent market leaders) is provided.     

Power dependence,diversification strategy,and performance in keiretsu member firms

Conceptualizing the keiretsu as a power‐dependence system, we propose that benefits accruing from keiretsu affiliation differ across member firms, depending on their power in (or dependence on) the keiretsu. By integrating power with governance and internal market perspectives on group affiliation, we develop and find general support for the hypotheses that powerful keiretsu member firms are able to place more emphasis on growth in pursuing product and international diversification, whereas less powerful keiretsu member firms are subject to strong monitoring and emphasize profitability. These findings provide support to the study's proposition that power‐dependence relationships in a keiretsu influence member firms' appropriation of group affiliation benefits in pursuing diversification strategies. Copyright © 2004 John Wiley & Sons, Ltd.     

Empowering leadership: leading people to be present through affective organizational commitment?*

Abstract

This study tested a mediation model in which empowering leadership was negatively related to three withdrawal behaviors: lateness, absenteeism, and turnover intention, with affective organizational commitment as a mediator. With 294 full‐time US employees, results from structural equation modeling indicated that empowering leader behaviors at one time were positively related to estimates of affective organizational commitment at a second time, which in turn was negatively related to absenteeism and turnover intention at a final time. Additionally, no significant direct effect was found between empowering leadership and withdrawal behaviors, further supporting the mediation model. However, neither empowering leadership nor affective commitment influenced followers' lateness. Empowering leadership, which provides employees with autonomy and developmental support, may have a favorable effect on employees' decisions to attend and stay in the organization, as well as their affective reaction to the organization in the form of psychological commitment. This study extended prior research models by examining a full range of withdrawal behaviors in relation to empowering leadership and showed that commitment may explain why empowering leader behaviors can affect employees' retention decisions.     

LIFO adoption and dividend payout

Adoption of the LIFO inventory costing method tends to decrease reported earnings but increases cash flows to adopting firms. This study examines the change in dividend payout ratios (cash dividends divided by earnings) accompanying LIFO adoption. The question addressed is whether adopting firms likely paid out incremental cash flows or retained them to the benefit of management. The evidence suggests that managers and directors adjusted payout ratios to partially offset the negative earnings effect of LIFO. The adjustments made were not sufficient in magnitude to achieve a neutral LIFO effect on dividend payout, and the net result was the retention of incremental cash flows generated by LIFO adoption.     

CEO compensation, shareholder rights, and corporate governance: An empirical investigation

We investigate whether CEO compensation is influenced by the strength of shareholder rights. Our evidence reveals that CEOs of firms where shareholder rights are weak obtain more favorable compensation. It is also found that higher CEO pay is associated with a higher degree of potential managerial entrenchment. Additionally, CEOs of firms with governance provisions that offer them protection from takeovers enjoy more generous pay. We also examine the change in CEO compensation relative to the change in shareholders' wealth. The evidence shows that when there is an increase in shareholders' wealth, the CEO is able to obtain higher incremental compensation when shareholder rights are weak. On the contrary, when shareholders' wealth falls, there is no corresponding decline in CEO compensation when shareholder rights are weak. Given the empirical evidence, we argue that CEO compensation practices reflect rent expropriation rather than optimal contracting.     

Time-consistent policies

In many cases the optimal open-loop policy to influence agents who solve dynamic problems is time inconsistent. We show how to construct a time-consistent open-loop policy rule. We also consider an additional restriction under which the time-consistent open-loop policy is stationary. We use examples to illustrate the properties of these tax rules.     

Signal Jamming in Pretrial Negotiation with Multiple Defendants

This article analyzes the pretrial settlement process among an uninformed plaintiff and multiple defendants who share information about the winning chances of their cases. We show that when the chances are negatively correlated, cross-type subsidization occurs to circumvent the possibility of signal jamming, that is, the settlement offer of a strong defendant (a weak defendant) is distorted upward (downward), as far as the no-distortion equilibrium is not viable. In this equilibrium, the plaintiff settles with defendants with probability one.     

Macroeconomic News and the Euro/Dollar Exchange Rate

This paper investigates to what extent daily movements in the euro/dollar rate were driven by news about the macroeconomic situation in the USA and the euro area during the first two years of EMU. We examine whether market participants reacted to news in different ways depending on whether the news came from the USA or from the euro area, and whether the news was good or bad. Furthermore, we investigate whether traders' reaction to news has changed over time. We find that macroeconomic news has a statistically significant correlation with daily movements of the euro against the dollar. However, this relationship exhibits considerable time variation. There are indications of asymmetric response, but to different extents at different times. Our results also provide evidence that the market seemed to ignore good news and remain fixated on bad news from the euro area, as often claimed in market commentaries, but only for some time. Finally, we find evidence that the impact of macroeconomic news on the euro/dollar rate was stronger when news switches from good to bad or vice versa.
(J.E.L.: F31).     

Dynamics of Business Cycles in Asia: Differences and Similarities

The paper documents the extent of similarities and differences of business cycle characteristics of the Asian countries and compares the cyclical regularities in this region with those of the G‐7 countries. The Asian economies are generally more volatile than the G‐7 countries, but the amplitude of economic fluctuations in the Asian countries tends to decrease over time. Comovement and persistence properties of business cycles in the Asian countries are very similar to those of the G‐7 economies. The authors find that while the patterns of business cycle fluctuations in the main macroeconomic aggregates display important similarities, the behavior of fiscal and monetary policy variables exhibits significant differences across the Asian countries. Moreover, there is a high degree of comovement between the individual country business cycles and different measures of the Asian business cycle, indicating that there is a regional business cycle specific to the Asian countries.