UNEMPLOYMENT,HUMAN CAPITAL DEPRECIATION,AND UNEMPLOYMENT INSURANCE POLICY

This paper presents a structural estimation of a life cycle model with unemployment risk. The model allows for human capital depreciation during unemployment. It is estimated using German and US household‐level data. The data suggest that the adverse impact of unemployment on individual productivity is important in both countries, but quantitatively more relevant in Germany. Moreover, simulations show that the combination of skill depreciation with the generous unemployment insurance system that was in place in Germany until recently is a key factor in explaining the differences in labour market performance between these countries. Copyright © 2012 John Wiley & Sons, Ltd.     

Incumbents’ defense strategies: a comparison of deterrence and shakeout strategy based on evolutionary game theory

This paper addresses the question of how an established firm can successfully defend its market against current and future competitors. Previous studies on this issue are surprisingly scarce and typically concentrate on only a single generic defense strategy. Thus, little is known about the degree and the manner in which different generic defense strategies, such as a deterrence strategy (pursued before competitor market entry) and a shakeout strategy (pursued after competitor market entry), differ in effectiveness and efficiency and about the corresponding role of product and market conditions. As these strategies tend to be costly, an established firm must decide which of these strategies to focus its scarce resources on. Drawing on evolutionary game theory and an empirical calibration and validation study, this paper seeks to fill these research gaps. While both strategies turn out to be viable options for market defense, the authors find that in general, a shakeout strategy tends to be superior to a deterrence strategy. However, the authors also identify product and market conditions under which an established firm is better off focusing on a deterrence strategy. In methodological respects, the paper contributes to the marketing discipline by introducing evolutionary game theory, which has not been used previously for analyzing marketing issues, as well as an evolutionary approach to research on market defense.     

Is local bias a cross-border phenomenon? Evidence from individual investors’ international asset allocation

Extant literature consistently documents that investors tilt their domestic equity portfolios towards regionally close stocks (local bias). We hypothesize that individual investors’ local bias is not limited to the domestic sphere but instead also determines their international investment decisions. Our results confirm the presence of a cross-border local bias. Specifically, we show (i) that the stockholdings of individual investors living within regional proximity to a foreign country display a significantly lower foreign investment bias towards investment opportunities in that country and (ii) that this drop in foreign investment bias levels is disproportionately driven by investments in regionally close neighbor-country companies. The impact of cross-border local bias on investors’ bilateral foreign equity investments is economically significant and holds even after controlling for previously identified explanations of international asset allocation.     

Gestaltung von Verrechnungspreisen unter Beachtung von Anreiz-und Steuerungseffekten

Ohne Zusammenfassung Prof. Dr. Wolfgang Schultze ist Inhaber des Lehrstuhls für Rechnungslegung und Controlling Dipl.-Math. oec. Andreas Weiler ist wissenschaftlicher Mitarbeiter und Doktorand am Lehrstuhl für Rechnungslegung und Controlling     

Rationally mispriced assets in equilibrium

We present a simple model of trading in a financial market where agents are asymmetrically informed and information is transmitted through the price system. We characterize the equilibrium for this economy and show that ‘rational mispricing’ of assets occurs if the price system fails to reveal the insider information accurately. It is argued that the communication of wrong information through equilibrium prices is compatible with full rationality on the part of the investors and may explain deviations from the efficient markets hypothesis.     

Agentenbasierte Simulation zur Analyse und Lösung betriebswirtschaftlicher Entscheidungsprobleme

Complex systems frequently reveal decision problems which cannot be addressed by classical analytical or optimization methods. Markets consisting of players that interact with heterogeneous goals or enterprises with multi-faceted intertwined processes are typical examples of such systems within the global economy. During recent years, the agent-based simulation (ABS) has spread as a technology that helps to simulate such systems and better understand their inner causes and effects. In this work, we present the potential of ABS with respect to business applications and review a broad set of case studies from academia as well as from corporate practice. To conclude, we analyze the application process for the utilization of an ABS, spanning from the conception and modeling to implementation and the processing of the simulation.     

‘Blame it on marketing’: consumers' views on unsustainable consumption

This paper addresses consumers' attitudes towards consumption, the extent to which excessive consumption is perceived as an environmental problem and what consumers perceive as their personal responsibility vs. that of marketing for this consumption. Findings from a focus group and a survey administered to lecturers of a university in Portugal are reported. A critical reflection upon the findings reveals that participants view consumption as excessive and mostly due to marketing, but do not associate high levels of consumption with environmental damage. The consumers surveyed did not accept personal responsibility for excessive consumption, and many of them do not perceive their actions to have a significant impact on the environment. The high educational level of our sample makes these findings of particular concern. This paper feeds the debate on sustainable marketing and expresses the need to address consumers', as well as marketing's, place in sustainability. Implications of this study are drawn and directions for future research are suggested.