Revenue implication of auction value in <Emphasis Type="Italic">k</Emphasis>-price sealed-bid auctions: An experimental study

In this paper, we show that in a heterogeneous bidding community with predominantly risk-seeking bidders, third-price sealed-bid auctions yield higher revenue for the seller than first-price sealed-bid auctions when the auction value is low. Conversely, when the value of the auction is high, first-price sealed-bid auctions yield higher revenue for the seller than third-price sealed-bid auctions. Existing theoretical findings for a homogeneous group of risk-seeking individuals imply that third-price sealed-bid auctions should generate higher revenues for the seller than first-price sealed-bid auctions. Our results for low-value auctions agree but our results for high-value auctions do not agree with the existing findings. We discuss the implications of this discrepancy as a function of the shift in goal orientation from a win-focus to a value-focus as the value of the auction increases.

Classification of ownership patterns in Korean conglomerates

This study classifies the ownership structure of conglomerates considering the conglomerates' choices of pyramidal vs. horizontal structures and the magnitude of equity held by the controlling shareholders, namely the owner family. It proposes four patterns of ownership structure: (1) horizontal ownership with a high family stake, (2) horizontal ownership with a low family stake, (3) pyramidal ownership with a high family stake, and (4) pyramidal ownership with low family stake. Further, an attempt has been made to identify the series of economic variables contributing to the varying patterns of ownership structure in the 30 largest Korean conglomerates.     

ROBUST ASSET ALLOCATION WITH BENCHMARKED OBJECTIVES

In this paper, we introduce a new approach for finding robust portfolios when there is model uncertainty. It differs from the usual worst‐case approach in that a (dynamic) portfolio is evaluated not only by its performance when there is an adversarial opponent (“nature”), but also by its performance relative to a stochastic benchmark. The benchmark corresponds to the wealth of a fictitious benchmark investor who invests optimally given knowledge of the model chosen by nature, so in this regard, our objective has the flavor of min–max regret. This relative performance approach has several important properties: (i) optimal portfolios seek to perform well over the entire range of models and not just the worst case, and hence are less pessimistic than those obtained from the usual worst‐case approach; (ii) the dynamic problem reduces to a convex static optimization problem under reasonable choices of the benchmark portfolio for important classes of models including ambiguous jump‐diffusions; and (iii) this static problem is dual to a Bayesian version of a single period asset allocation problem where the prior on the unknown parameters (for the dual problem) correspond to the Lagrange multipliers in this duality relationship. This dual static problem can be interpreted as a less pessimistic alternative to the single period worst‐case Markowitz problem. More generally, this duality suggests that learning and robustness are closely related when benchmarked objectives are used.     

Tendency to Infer Bribery and Corrupt Intent in Social and Business Situations: Comparing Chinese and Singaporean Employees

The present paper investigates the differences in ethicalperceptions between Chinese and Singaporean employees. Twocontrasting predictions based on socialization theory are testedusing 142 Chinese and 141 Singaporean employees as subjects. Results show that Chinese employees tend to infer a greaterdegree of unethical (bribery and corrupt) intent than Singaporeanemployees in 17 of the 25 ethical vignettes. The converse isfound in only two and no significant differences are found in therest of the vignettes. Implications for international managersand assignees and researchers in international business workingon or in China are discussed.     

Bad News Travels Slowly: Size, Analyst Coverage, and the Profitability of Momentum Strategies

Various theories have been proposed to explain momentum in stock returns. We test the gradual-information-diffusion model of Hong and Stein (1999) and establish three key results. First, once one moves past the very smallest stocks, the profitability of momentum strategies declines sharply with firm size. Second, holding size fixed, momentum strategies work better among stocks with low analyst coverage. Finally, the effect of analyst coverage is greater for stocks that are past losers than for past winners. These findings are consistent with the hypothesis that firm-specific information, especially negative information, diffuses only gradually across the investing public.     

The influence of relative values of outside director stock options on firm strategic risk from a multiagent perspective

Prior work has examined the effects of absolute levels of outside director stock option grants on risk behavior without recognizing that relative stock option values could differentially affect risk taking. Drawing from the house money effect perspective, we extend this literature by examining how positive deviation from prior outside director option grants values influences firm strategic risk. Additionally we draw from the behavioral agency model and the power literature to develop a multiagent contingency framework suggesting the effect of positive director pay deviation depends on the incentives and power of CEOs reflected in CEO stock ownership and CEO duality, respectively. Our empirical results indicate positive pay deviation has a positive effect on firm risk taking while high ownership and duality independently and jointly weaken this base relationship. Copyright © 2013 John Wiley & Sons, Ltd.     

Forecasting Employment Growth in Indonesia

This note discusses the dangers of using the employment-output elasticity to forecast employment creation in Indonesia. It demonstrates the unreliability of employment-output elasticity estimates for Indonesia obtained using various methods, and argues, that, in addition to the estimation problems, the elasticity method has inherent weaknesses that should preclude its use to forecast employment growth in a dynamic world.     

State Power and Private Profit: the political economy of corruption in Southeast Asia

This article reviews the extensive political and economic literature since 1990 on corruption in Indonesia, Philippines, Thailand, Malaysia and Singapore. After considering each country's individual recent history of corruption, the article comparatively analyses the relationship of corruption in these countries with, respectively, the roles of the state, the private sector and external actors, democratisation and decentralisation, and the impact of corruption on economic growth and inequality. Our conclusion is that while economic liberalisation, democratisation and centralisation of state power influence the forms of corruption and its impact on national economic performance, they are neither necessary nor sufficient for its decline.