Asymmetric Information in Simple Bargaining Games: An Experimental Study

Bilateral bargaining situations are often characterized by informational asymmetries concerning the size of what is at stake: in some cases, the proposer is better informed, in others, it is the responder. We analyze the effects of both types of asymmetric information on proposer behavior in two different situations which allow for a variation of responder veto power: the ultimatum and the dictator game. We find that the extent to which proposers demand less in the ultimatum as compared to the dictator game is (marginally) smaller when the proposer is in the superior information position. Further we find informed proposers to exploit their informational advantage by offering an amount that does not reveal the true size of the pie, with proposers in the ultimatum game exhibiting this behavioral pattern to a larger extent than those in the dictator game. Uninformed proposers risk imposed rejection when they ask for more than potentially is at stake, and ask for a risk premium in dictator games. We concentrate on proposers, but also explore responder behavior: We find uninformed responders to enable proposers’ hiding behavior, and we find proposer intentionality not to play an important role for informed responders when they decide whether to accept or reject an offer by an (uninformed) proposer.     

Import-push or export-pull? An industry-level analysis of the impact of trade on firm exit

Does the selection effect of trade work solely through competition from imports, or does the export market further contribute to firm selection? This paper provides a re-interpretation of the different mechanisms in terms of selection on profitability—rather than productivity—and derives novel predictions regarding the export market and the role of product differentiation. Empirical results for a sample of Danish manufacturing industries confirm the import-“push” hypothesis as well as the export-“pull” hypothesis, but also reveal differences across industries. The selection effect of trade is mainly driven by the “import-push” if product differentiation is high, whereas it is driven by the “export-pull” if goods are homogeneous.     

Intertemporal risk-return trade-off in foreign exchange rates

We investigate the intertemporal risk-return trade-off of foreign exchange (FX) rates for ten currencies quoted against the USD. For each currency, we use three risk measures simultaneously that pertain to that currency; its realized volatility, its realized skewness, and its value-at-risk. We apply monthly FX excess returns and risk measures calculated from daily observations. We find that there is a significant contemporaneous risk-return trade-off for the currencies under investigation. There is no evidence of noncontemporaneous risk-return trade-off. We pay special attention to the risk-return trade-off during the recent financial crisis.     

Work versus windfall: An exploration of saving on subsequent purchase

Previous research has examined the effects of discounts and promotions on the future performance of a brand or store. However, no attempts have been made to explore how a consumer psychologically accounts for the way a savings is obtained or how that accounting process affects subsequent purchase decisions. This research employs an experimental approach to test the hypothesis that buyers will spend more (save less) of a savings that they obtain from a windfall gain than an equivalent amount obtained from a worked-for savings. Results are generally supportive of the hypothesis, revealing that consumers do treat savings differently depending on how they are obtained. This finding appears to hold over a wide range of saving magnitudes.     

Sustainable consumption in Vietnam: an explorative study among the urban middle class

The middle class of Vietnam is growing and so is their consumption, especially in urban areas. This is due to the effects of rapid economic growth, industrialization and increasing wealth in combination with a young, growing population. This paper aims to understand current consumption patterns and consumption categories that can provide a start for sustainable lifestyles among the Vietnamese middle class. Data was collected in the capital Hanoi, in the north of Vietnam. The current level of awareness, knowledge and attitude was explored on five specific consumption topics: energy, transport, water, waste, and food. A combination of quantitative and qualitative data was collected: 5 focus groups, 5 in‐depth interviews and a survey among 158 Vietnamese urban middle class consumers. The results are discussed according to the MOA model that explains behaviour as a function of three components: Motivation, Opportunity and Ability. The research concludes that awareness and knowledge of the urban middle class in Vietnam on sustainable consumption is generally low. However, the motivation to live healthy lifestyles and protect the planet for their future generations is rather high. In order to support more sustainable lifestyles, the awareness of environmental issues needs to be increased; knowledge needs to be made available and accessible (ability); and role models need to set an example for the urban middle class of Vietnam. Furthermore, health in combination with food is the most important reason for people to pursue a sustainable lifestyle (motivation) and the need to change was expressed. However, a general distrust towards business and governmental actors was also found. Therefore, opportunities for bottom‐up initiatives for sustainable food consumption must be explored in the future. This could support in engaging the middle class of Vietnam in sustainable lifestyles.     

Household Transport Demand in a CGE-framework

The main objective of this study is to improve the modelling of household demand for transport services in a Computable General Equilibrium (CGE) model. The new extended model is then used for numerical calculations to test how the Swedish economy reacts to a carbon target. Special attention will be given to distributional effects and the connection between labour supply and work journeys in a sparsely populated country like Sweden. A differentiation between trip purposes and trip length, a complementary relationship between work journeys and labour supply, and a subdivision of households by density of population and income influence the numerical results. Our main conclusions from the analysis of a carbon target are that if the carbon tax revenue is recycled by decreasing the employers’ social contribution fee, welfare costs are lower than with lump-sum replacements of tax revenue to households. The welfare cost may be reduced even further if work journeys are not additionally taxed as compared to the base year. However, the lower total welfare cost is obtained at the expense of making society more unequal, since both labour tax recycling (cuts in employers’ social contributions) and exempting tax on work journeys will make low income groups carry a higher burden. An increased carbon dioxide tax is also shown to increase welfare differences between sparsely populated areas and city regions in Sweden.      

Organizational Ethics: Perceptions of Employees by Gender

As more women enter the work force and assume management positions in corporations, increasing attention is being given to employment diversity. In addition, studies suggest that females have more propensity for ethics than males. However, these results may be debatable and limited data are available to substantiate these claims or assess gender differences among employees. Ethics codes can aid in supporting policies and enhancing corporate diversity. To assist one company in the development of an ethics code, a survey of 4005 employees in one U.S. corporation was conducted to ascertain their opinions of the ethical environment of the company. The survey used the Ethics Environment Questionnaire (EEQ), consisting of twenty items on a 5-point Likert-type scale; reliability on Cronbach's alpha was 0.94. Response rate was 50%, with the sample paralleling the population in proportion of males and females. Respondents reported a profile of 3.18 out of the high of 5.0, but with several significant differences between the male and female employees, including differences on education and position. Males were more in agreement than females that the firm had an ethical environment. On some items, however, males and females were in strong agreement. Comparisons to prior studies were drawn, including suggestions for ways corporations could use an ethics survey to tailor in-service training, enhance diversity in the work force, and support the development of an ethics code.     

Unravelling the ethical decision-making process: Clues from an empirical study comparingFortune 1 000 executives and MBA students

Using a nationwide survey, this study compared the ethical values and decision processes ofFortune executives and MBA students. Statistically significant differences in ethical values were found by class of respondent, gender, and professed decision approach. MBAs were also found to process ethical decisions differently than business professionals.James R. Harris is Associate Professor of Marketing at Auburn University. He has published in theJournal of Business Ethics, Journal of Marketing Research, Journal of Retailing, Business and Professional Ethics Journal, and elsewhere. He has taught the Legal and Social Environment course at the graduate level for a number of years.Charlotte D. Sutton is Assistant Dean for Graduate Programs at the College of Business, Auburn University. Her research on such topics as women in management, stress and interpersonal communication has been cited in such places as ABC News, Good Morning America,Wall Street Journal, Newsweek, andBusiness Week.     

Too hot to handle? Trust and human resource practitioners' implementation of anti‐bullying policy

In this article, we examine the dynamics of trust in the triadic relationship between HR, employees and managers when dealing with allegations of workplace bullying. Previous research has shown employees to be dissatisfied with HR practitioners' responses to complaints of workplace bullying, and we explore the novel angle of the HR practitioners' perspective through semistructured interviews. Paralleling extant employee accounts, the findings suggest that HR practitioners rarely judge situations as bullying where a manager is accused. Trust between employee, manager and HR practitioner is essential for the successful resolution of bullying claims, yet this study suggests multiple directions of distrust. By virtue of their role alignment and previous experiences of handling bullying, HR practitioners were found to prioritise their relationships with managers, automatically distrusting employees' bullying claims. Despite also distrusting managers to effectively deliver HRM practices, it appears that bullying complaints are ‘too hot to handle’ for HR practitioners given the risks to their relationships with managers.     

Macro-econometric modelling for the Nigerian economy: A growth–poverty gap analysis

This study develops comprehensive full-sector macro-econometric models for the Nigerian economy with the aim of explaining and providing a long-term solution for the persistent growth–poverty divergence experienced by the country. The models are applied to test the hypothesis of existing structural supply-side constraints versus demand-side constraints impeding the economic growth and development of the country. A review of the historical performance of the Nigerian economy reveals significant socio–economic constraints as the predominant impediments to high and sticky levels of poverty in the economy. Thus, a model which is suitable for policy analyses of the Nigerian economy needs to capture the long-run supply-side characteristics of the economy. A price block is incorporated to specify the price adjustment between the production or supply-side sector and real aggregate demand sector. The institutional characteristics with associated policy behaviour are incorporated through a public and monetary sector, whereas the interaction with the rest of the world is represented by a foreign sector, with specific attention being given to the oil sector. The models are estimated with time-series data from 1970 to 2006 using the Engle–Granger two-step co-integration technique, capturing both the long-run and short-run dynamic properties of the economy. The full-sector models are subjected to a series of policy scenarios to evaluate various options for government to improve the productive capacity of the economy, thereby achieving sustained accelerated growth and a reduction in poverty in the Nigerian economy.