Regulating,joint bargaining,and the demise of precedent

Recent decades have seen a fundamental shift in the nature of economic regulation in the United States. Unauthorized by congress, and largely unnoted in legal and academic circles, regulatory agencies such as the Federal Communications Commission have changed the regulatory process by linking otherwise unrelated regulatory issues. Examples include tying merger approval to firm commitments to engage in conceptually unrelated build‐outs and other projects of political importance. This linking of issues has several effects, the most prominent being (a) tying regulatory issues changes the outcomes obtained, plausibly in predictable ways; (b) tying in some circumstances allows regulators to extend their authority to issues for which they have little or no legal authority; and (c) tied regulatory bargaining fails to produce valid legal precedent for firm decision making. We provide an analysis of these conclusions by examining the increasing use of consent decrees, voluntary merger commitments, and merger conditions by the Federal Communications Commission, referencing our discussion with a simple model of joint bargaining applicable to regulatory practice.     

General Editor’s Note: Antitrust and Regulatory Update

Review of Industrial Organization -     

Doing Good While Behaving Badly: Checkout Charity Process Mechanisms

Journal of Business Ethics - Companies are increasingly using cause-related marketing campaigns to engage consumers during the purchase process and highlight their own corporate social...     

To push performance,check the leader’s power motive

The power motive, defined as the desire to impact the behavior and emotions of another person, has long been controversial. On one side, the exercise of power has been put forth as a fundamental human need greater in strength than the need to survive. On the other, it has been vilified for its potentially devastating consequences. We argue the latter view is distorted, and, by relying too heavily on it, we have come to misunderstand the essential nature of power and its use by leaders charged with driving performance. It is not the power motive that leads to corruption and tyranny, but rather how the power motive is channeled into behavior by other personality factors. Consequently, those charged with leader selection should place greater emphasis on how individuals with strong power motives differ in how they channel power. Doing so will support the selection of executives best equipped to deliver organizational performance.     

High‐Frequency Trading and the New Stock Market: Sense And Nonsense

The stock market has been transformed during the last 25 years. Human suppliers of liquidity like the NASDAQ dealers and NYSE specialists have been replaced by algorithmic market making; stocks that once traded on a single venue now trade across twelve exchanges and a multitude of alternative trading systems. New venues like dark pools, and new participants like high‐frequency traders, have emerged to take on prominent roles. This new market has had more than its share of controversy and regulatory scrutiny, particularly in the wake of Michael Lewis’s bestseller Flash Boys. In this article, the authors analyze five of the most controversial new market practices, including various high‐frequency trading strategies and dark pool activities. They set out a simple conceptual framework based on adverse selection and agency problems, and apply that framework to assess the welfare effects of each of the five practices. While much that is criticized is indeed objectionable, other controversial practices are much more complex than popularly imagined and may in fact be socially desirable. They conclude by evaluating a range of potential reforms to equity market structure.     

Chinese economy in the new era

The “new era”, a term introduced by President Xi Jinping, may also be identified as the Xi era, during which China will be transformed from a moderately well‐off to a strong and wealthy nation. In the new era, the Chinese Government will deepen economic reform, widen economic opening and enhance the quality of economic growth. / Our projections show that by 2020, Chinese real GDP per capita, in 2017 prices, will exceed US$10,000, an economic development milestone. By 2031, Chinese real GDP will surpass US real GDP (US$29.4 trillion vs US$29.3 trillion), making China the largest economy in the world. However, Chinese real GDP per capita will still lag behind the US significantly, amounting to only one‐quarter of that of the United States. By 2050, Chinese real GDP will reach US$82.6 trillion, compared to US$51.4 trillion for the United States. However, in terms of real GDP per capita, China will still lag significantly behind, at US$53,000, slightly less than the current level of US real GDP per capita, compared to US$134,000 for the United States.     

Global M&A: Still the chocolate industry sweetspot?

Like a dividing cell under the microscope, the American snack food market has split apart into two distinct cells, each with its own unique consumer DNA. The two market segments can best be defined as legacy consumers and next‐generation consumers. This tectonic shift in the confectionery industry may make global industry‐giant mergers more a battle between dinosaurs, lit by meteor light.     

When it pays to have a friend on the inside: contingent effects of buyer advocacy on B2B suppliers

As organizational buying systems grow more complex and sophisticated, suppliers increasingly rely on buyer advocacy: an individual buyer’s efforts to influence his/her colleagues such that the supplier’s standing is improved. Drawing from cognitive response theory, the authors hypothesize an inverted U-shaped relationship between a buyer’s advocacy for a supplier and the customer’s purchases from that supplier. They theorize that this effect is moderated by the advocate’s industry experience and customer–supplier relationship characteristics. An analysis of multisource data from a B2B service provider (Study 1) supports the predicted inverted U-shaped relationship, while a unique dataset from a large industrial supplier (Study 2) provides broad support for the hypothesized moderators. Finally, a randomized experiment (Study 3) replicates key findings and corroborates the theorized cognitive response mechanisms. Findings contribute to the limited literature on buyer advocacy within the organizational buying domain and offer practical implications for suppliers and buyers.

     

An evaluation of the red-light camera programme in the city of Dammam,the Kingdom of Saudi Arabia

This study evaluated the effectiveness of red-light cameras in Dammam, the Kingdom of Saudi Arabia. Two methods were used to assess changes in crash risk at the intersections at which the red-light camera programme had been operating. Geospatial analysis was used to visualize trends in road crash density over the geographical region of Dammam and a pre--post-camera crash analysis was undertaken. The distribution of injury crashes was greater than that of crashes which included property damage, the latter of which was concentrated around central Dammam. The five red-light cameras installed in 2012 were located outside areas of high-crash and injury density, and the total number of crashes reported in the three-month periods after installation was double that before the cameras were installed. This increase in the number of crashes also occurred at the five comparison sites (without red-light cameras), indicating a null effect. The findings from this study are contrary to previous evaluations of speed management programmes associated with red-light cameras. The study highlights the challenges in obtaining data for such research and illustrates that a reliance on overt, fixed camera's to manage speed is unlikely to deliver significant reductions in road trauma.     

Higher skilled working tourists and their leisure lifestyles: a qualitative study of guest language instructors in South Korea

Using interviews conducted with 24 higher skilled working tourists employed as guest language instructors in the Republic of Korea, this paper explores how working tourists could secure an optimal leisure lifestyle in their host countries. Three key findings emerged. First, the respondents were seeking casual, touristic, amateur, hobby and volunteer leisure with their colleagues and with their host community members. But, the rewards and episodic aspects of their leisure, including formal and informal language development, suggested that it incorporated variations in project-based leisure as a core characteristic. Second, these respondents were taking part in guest, host and leisure speech communities that were each offering leisure choices. However, their leisure lifestyle was best when leisure, second language development and acculturation coincided in a leisure speech community. Third, that in a leisure speech community, respondents’ acculturation and friendships improved more so than in either guest or host speech communities. Also, that these respondents’ formal and informal second language learning within their leisure speech communities was essential for an optimal leisure lifestyle. The paper determines that leisure speech communities, occurring along a continuum of monetary, educational and interpersonal resources, could affect the linguistic mobility of higher skilled working tourists. It recommends that future research could examine if a sociolinguistics of leisure could assist in exploring and mapping the leisure lifestyles appearing among mobile populations in a globalising world.