Estimating matching functions when recruiting intensity matters

The article estimates matching functions – the relationships between new hires, job vacancies and unemployment – using monthly time series data for Sweden. The data contain rich information on types of job vacancies which provides information on firms’ recruiting efforts. The analysis shows that the aggregate flow of new hires is well explained by an augmented version of a standard matching function that incorporates data on firms’ recruiting intensity.     

“One of these days,things are going to change!” How do you make sense of market disruption?

The significance of mindsets is apparent in everyday business life. As today’s managers and companies face uncertainty and disruptive change in the business environment and markets, there is a growing need to understand and strategically address such change. This becomes challenging when disruptive market forces confront the institutional logic or rules of the game based on collectively acquired experience of doing business in the given field. In overcoming such challenges, managers’ hidden reasoning remains an untapped potential while their existing mindset influences what they attend to and what they decide to do. This article elaborates a diagnostic framework, accompanied by a tool to help managers make sense of disruptive markets and reflect individually and collectively on possible courses of action. The framework has two principal dimensions—strategic scope and focus—that are further divided into three business elements of strategic market-oriented management: offering, customer, and market. The tool offers a practical means of profiling individuals’ mindsets. In increasingly dynamic business environments, reflection capabilities represent a new source of competitive advantage.     

Fairness is intuitive

In this paper we provide new evidence showing that fair behavior is intuitive to most people. We find a strong association between a short response time and fair behavior in the dictator game. This association is robust to controls that take account of the fact that response time might be affected by the decision-maker’s cognitive ability and swiftness. The experiment was conducted with a large and heterogeneous sample recruited from the general population in Denmark. We find a striking similarity in the association between response time and fair behavior across groups in the society, which suggests that the predisposition to act fairly is a general human trait.     

Resolving distributional conflicts between generations

Summary. We describe a new approach to the problem of resolving distributional conflicts between an infinite and countable number of generations. We impose conditions on the social preferences that capture the following idea: If preference (or indifference) holds between truncated paths for infinitely many truncating times, then preference (or indifference) holds also between the untruncated infinite paths. In this framework we use such conditions to (1) characterize different versions of leximin and utilitarianism by means of equity conditions well-known from the finite setting, and (2) illustrate the problem of combining Strong Pareto and impartiality in an intergenerational setting.Received: 8 May 2002, Revised: 12 June 2003, JEL Classification Numbers: D63, Q01.Correspondence to: Geir B. AsheimWe thank Kaushik Basu, Marc Fleurbaey, David Miller, Tapan Mitra, Lars-Gunnar Svensson, and an anonymous referee for helpful comments. Asheim gratefully acknowledges the hospitality of the Stanford University research initiative on the Environment, the Economy and Sustainable Welfare, and financial support from the Hewlett Foundation through this research initiative.     

Labor Taxation in Search Equilibrium with Home Production

Conventional models of equilibrium unemployment typically imply that proportional taxes on labor earnings are neutral with respect to unemployment as long as the tax does not affect the replacement rate provided by unemployment insurance, i.e. unemployment benefits relative to after–tax earnings. When home production is an option, the conventional results may no longer hold. This paper uses a search equilibrium model with home production to examine the employment and welfare implications of labor taxes. The employment effect of a rise in a proportional tax is found to be negative for sufficiently low replacement rates, whereas it is ambiguous for moderate and high replacement rates. Numerical calibrations of the model indicate that employment generally falls when labor taxes are raised.     

Models for the Valuation of International Convertible Bonds

This paper presents a family of three models for the valuation of international convertible bonds which are denominated in a currency different from that of the country of the issuing corporation. The first model is two-state, with the value of the underlying stock and the value of the currency of the parent country as state variables. The second model is one-state. It is derived from the first one, with the two state variables collapsed into one, listed share price times exchange rate. The third model is an extension of the second one, in that it includes the risk of devaluation of the currency of the country of the issuing corporation. One specific Euroconvertible bond, issued by the Swedish corporation SCA, is used as illustration throughout.     

Disintermediation in Business-to-Business Service Channels: Mechanisms and Challenges

Purpose: The aim of this article is to delineate a number of different disintermediation mechanisms within the context of business-to-business (B2B) service channels and to identify the specific challenges associated with adopting these mechanisms.

Methodology: The research was conducted in accordance with abductive reasoning, moving continuously between the empirical world of 4 industrial (B2B) firms and the model world.

Findings: This article delineates a choice of 6 disintermediation mechanisms and their attendant challenges within the context of industrial service channels.

Contribution: The article provides an original conceptualization of disintermediation, which is detached from the traditional understanding of the concept. As such, it constitutes a useful starting point for the development of a formal theory of disintermediation.

Implications for Practice: This article should be useful for practitioners, because it presents various disintermediation options available to industrial firms faced by undesired intermediaries in their industrial service channels.