‘HAVE YOU FELT ANGRY LATELY?’: A NOTE ON UNFAIR WAGE PERCEPTIONS AND THE NEGATIVE EMOTION OF ANGER

The author analyses the nexus between unfair wage perceptions of workers and the frequency of the negative emotion of anger. For this purpose, German household panel data for the years 2007, 2009, 2011 and 2013 are used. Angry feelings in the last four weeks have occurred significantly more frequently for workers who perceive their wage as unfair, whereas the own absolute hourly wage is not significantly correlated with the frequency of having felt angry. The results further indicate that workers have felt more often angry if working hours are larger; but the economic significance seems rather small compared to unfair wage perceptions.     

Optimal constrained investment in the Cramer-Lundberg model

We consider an insurance company whose surplus is represented by the classical Cramer-Lundberg process. The company can invest its surplus in a risk-free asset and in a risky asset, governed by the Black-Scholes equation. There is a constraint that the insurance company can only invest in the risky asset at a limited leveraging level; more precisely, when purchasing, the ratio of the investment amount in the risky asset to the surplus level is no more than a; and when short-selling, the proportion of the proceeds from the short-selling to the surplus level is no more than b. The objective is to find an optimal investment policy that minimizes the probability of ruin. The minimal ruin probability as a function of the initial surplus is characterized by a classical solution to the corresponding Hamilton-Jacobi-Bellman (HJB) equation. We study the optimal control policy and its properties. The interrelation between the parameters of the model plays a crucial role in the qualitative behavior of the optimal policy. For example, for some ratios between a and b, quite unusual and at first ostensibly counterintuitive policies may appear, like short-selling a stock with a higher rate of return to earn lower interest, or borrowing at a higher rate to invest in a stock with lower rate of return. This is in sharp contrast with the unrestricted case, first studied in Hipp and Plum, or with the case of no short-selling and no borrowing studied in Azcue and Muler.     

Ownership unbundling of natural gas transmission networks: empirical evidence

The European Commission has intensively examined the mandatory separation of natural gas transmission from production and services. However, economic theory is ambiguous on the price effects of vertical separation. In this paper, we empirically analyze the effect of ownership unbundling of gas transmission networks, considered to be the strongest form of vertical separation, on the level of end-user prices. Therefore, we apply different dynamic estimators such as system GMM and the bias-corrected least-squares dummy variable estimator to an unbalanced panel consisting of 18 EU countries over 19 years, allowing us to avoid the endogeneity problem and to estimate the long-run effects of regulation. We introduce a set of regulatory indicators as market entry regulation, ownership structure, vertical separation and market structure, as well as account for structural and economic country specifics. Among the different estimators, we consistently find that ownership unbundling has no impact on natural gas end-user prices, while the more modest legal unbundling reduces them significantly. Furthermore, third-party access, market structure and privatization show significant influence, with the latter leading to higher prices.     

Firm-hosted online brand communities and new product success

Many firms use online brand communities to support the launch of their new products. This study proposes a typology of firm-hosted online brand communities and examines whether such a classification system can improve predictions of new product success. A cross-industry analysis of 81 firm-hosted online brand communities shows that these communities reflect three archetypes. A subsequent survey of 170 community-hosting firms in the consumer durable goods industry reveals that the three types of communities are not equally important for new product success. Moreover, one archetype generally underperforms the other two as a new product support mechanism. Overall, the results demonstrate that firm-hosted online brand communities can be a predictor of new product success.     

Disequilibrium,Reproduction and Money: a Classical Approach

We consider a bisector reproduction model in which money is introduced as a pure means of exchange issued by a bank at the producers' requests. Each capitalist aims at maximizing accumulation in his own sector. Their plans are based on available quantities and expected prices. Effective prices are determined by a market mechanism. Temporary disequilibria occur in both physical and monetary terms. The settlement of the monetary balances is operated by means of a transfer of capital goods. Final allocations and effective productions are thus determined. The dynamics of the economy are those of a sequence of temporary disequilibria and let appear several possibilities (local or global stability, cycles) depending on the values of the parameters.     

Do unfair perceived own pay and top managers’ pay erode satisfaction with democracy?

Many people are relatively unsatisfied with the democratic system as it currently exists. In this empirical research note, the authors present evidence that German workers, who perceive their own pay or top managers’ pay as unfair, are on average significantly less happy with the democracy in Germany. Thus, fairness perceptions in the labour market and of income inequality seem to have spillover effects on the overall satisfaction with the democratic system.     

Trade and the Environment: The Role of Firm Heterogeneity

In this paper, we derive a new effect of trade liberalization on the quality of the environment. We show that in the presence of heterogeneous firms, the aggregate volume of emissions is influenced by a reallocation effect resulting from an increase in the relative size of more productive firms. The relative importance of this reallocation effect and the scale effect well‐known from the literature is affected by the emission intensity at the firm level. Domestic emissions decrease as a result of a unilateral tariff reduction if and only if firm‐specific emission intensity decreases strongly with increasing firm productivity. As a result of the induced change in foreign emissions, domestic pollution can increase even if domestic emissions decrease.