Organizational Design,Competition, and Financial Exchanges

We investigate the incentives for vertical and horizontal integration in the financial securities service industry. In a model with two exchanges and two central securities depositories (CSDs), we find that decentralized decisions might lead to privately and socially inferior industry equilibria with vertical integration of both CSDs with their respective exchanges. Allowing for horizontal integration of CSDs avoids privately inferior industry equilibria. However, we observe too little horizontal integration from the social perspective. We link our results to recent regulatory and institutional developments such as the emergence of multilateral trading facilities, over-the-counter regulation, and financial harmonization.     

CEOs' Passion for Inventing and Radical Innovations in SMEs: The Moderating Effect of Shared Vision

Based on a sample of 388 small and medium‐sized enterprises (SMEs), we investigate how a CEO's passion for inventing is associated with radical innovations in SMEs. Furthermore, we examine whether this relationship is moderated by a shared vision. Our results demonstrate that CEOs who are passionate about inventing play a significant role with regard to radical innovation and that the degree to which a firm's members share its vision is positively correlated with this relationship. Our findings enrich upper echelons theory by incorporating insights into how deep‐level psychological traits are related to firm outcomes. In addition, we enhance our understanding of how passion can actually predict firm‐level outcomes.     

Competition versus cooperation: How technology-facilitated social interdependence initiates the self-improvement chain

Consumers are increasingly using technologies such as wearables or mobile apps to achieve their self-improvement goals. Such technologies often contain features that enable social interdependence (competition or cooperation) among users to support them in improving their engagement, performance, and well-being (life satisfaction and personal growth). However, the critical question remains: does competition or cooperation best serve users in attaining these self-improvement goals? Evidence from an online experiment and a field study reveals that competition is more effective in driving performance and personal growth, while cooperation is superior in terms of behavioral engagement and life satisfaction. Furthermore, the results indicate that the effects are mediated by strive for success and fear of failure, two counteracting psychological processes. While competition is the stronger trigger for both pathways, downstream effects vary depending on the self-improvement goal considered. This research thus provides insights into whether and how users can best realize their self-improvement goals using technologies that include social features.     

On the cultural basis of gender differences in negotiation

We study how culture and social structure influence bargaining behavior across gender, by exploring the negotiation culture in matrilineal and patriarchal societies using data from a laboratory experiment and a natural field experiment. One interesting result is that in both the actual marketplace and in the laboratory bargaining game, women in the matrilineal society earn more than men, at odds with years of evidence observed in the western world. We find that this result is critically driven by which side of the market the person is occupying: female (male) sellers in the matrilineal (patriarchal) society extract more of the bargaining surplus than male (female) sellers. In the buyer role, however, we observe no significant differences across societies.     

Cost-effectiveness analysis of secukinumab in ankylosing spondylitis from the Canadian perspective

Aim: To assess the cost-effectiveness of interleukin (IL)-17A inhibitor secukinumab vs the currently licensed biologic therapies in ankylosing spondylitis (AS) patients from a Canadian healthcare system perspective.

Methods: A decision analytic model (semi-Markov) evaluated the cost-effectiveness of secukinumab 150?mg compared to certolizumab pegol, adalimumab, golimumab, etanercept and etanercept biosimilar, and infliximab and infliximab biosimilar in a biologic-naïve population, over 60 years of time horizon (lifetime). The Bath Ankylosing Spondylitis Disease Activity Index (BASDAI 50) response rate was used to assess treatment response at week 12. Non-responders or patients discontinuing initial-line of biologic therapy were allowed to switch to subsequent-line biologics. Model input parameters (short-term and long-term changes in BASDAI and Bath Ankylosing Spondylitis Functional Index [BASFI], withdrawal rates, adverse events, costs, resource use, utilities, and disutilities) were obtained from clinical trials, published literature, and other Canadian sources. Benefits were expressed as quality-adjusted life years (QALYs). Cost and benefits were discounted with an annual discount rate of 1.5% for all treatments.

Results: In the biologic-naïve population, secukinumab 150?mg dominated all comparators, as patients treated with secukinumab 150?mg achieved the highest QALYs (16.46) at the lowest cost (CAD 533,010) over a lifetime horizon vs comparators. In the deterministic sensitivity analysis, results were most sensitive to changes in baseline BASFI non-responders, BASDAI 50 at 3 months and discount rates. Probabilistic sensitivity analysis showed that secukinumab 150?mg demonstrated higher probability of achieving maximum net monetary benefit vs all comparators at various cost thresholds.

Conclusions: This analysis demonstrates that secukinumab 150?mg is the most cost-effective treatment option for biologic-naïve AS patients compared to certolizumab pegol, adalimumab, golimumab, etanercept and etanercept biosimilar, and infliximab and infliximab biosimilar for a lifetime horizon in Canada. Treatment with secukinumab translates into substantial benefits for patients and the healthcare system.     

Corruption and the public display of wealth

We study an agent–client model of corruption, in which potential corruptors are uncertain about the probability with which officials are subjected to an audit, either high or low. We characterize a signaling equilibrium, in which officials who are less likely to be audited engage in public conspicuous consumption, whereas those who are more likely to be audited do not. In this equilibrium, officials are better off than in the equilibria without conspicuous consumption. The signaling equilibrium exists if the officials' bargaining power vis‐à‐vis potential corruptors is sufficiently high, which implies that corruption can be curbed by creating competition among officials.     

New Evidence on Housing Wealth and Consumption Channels

The Journal of Real Estate Finance and Economics - This paper provides new evidence on the effect of housing wealth on consumption by focusing on the impact of home-equity extraction. We develop a...     

Argumente gegen die Reform des Stabilitätsgesetzes wenig überzeugend — eine Replik

In their reply, Dullien and van Treeck criticise the argument of Michaelis, Elstner and Schmidt that the German Stability and Growth law (StabG) from the 1960s must not be reformed. They claim that Michaelis et al. neglect that the concept of sustainability has changed over the past 50 years and that nowadays issues such as social and ecological sustainability should be included. Moreover, the claim by Michaelis et al. that the StabG provides important tools for business cycle management is hardly convincing, given that these tools have not been used since the 1970s and stimulus packages have been passed on other legal grounds. / In their response Michaelis et al. stress that economic policy has to consider equally aspects of economic, social and ecological sustainability. The StabG, however, is a completely inappropriate basis for attempts to address aspects of social and ecological sustainability. The main use of the StabG consists in the possibility to quickly implement fiscal measures that could mitigate the consequences of severe economic downturns. Proposals of Dullien and van Treeck that various dimensions of sustainability are controllable by a predetermined set of instruments neglect the complexity of the social market economy.     

Das leere Versprechen der aktiven Konjunktursteuerung

Since the financial crisis and the ensuing sluggish recovery, a growing number of voices have called for a more active role for fiscal policy to stimulate the economy. We reject this call and argue that in normal times, monetary policy and automatic stabilisers are sufficient to smooth the business cycle. The effectiveness of active fiscal policy is too uncertain and the requirements for a sensible adjustment are too high. Moreover, determining the state of the business cycle is almost impossible in real time. The benefits of active fiscal policy therefore do not outweigh its costs. Only in exceptional situations should policy makers consider active fiscal policy measures as an option.