ECONOMIC PROGRESS AND CLIMATE CHANGE ISSUES: A DISSENTING VIEWPOINT

The attached text formed the basis for my opening contribution, and also some later remarks, at the discussion that followed the 2008 Clare Distinguished Lecture in Economics and Public Policy, given in Cambridge, England, on 14 May 2008. The lecturer was Professor Mohan Munasinghe, a Vice‐Chair of the Intergovernmental Panel on Climate Change, and his subject was ‘A Policy Framework for Climate Change and Sustainable Development: Economic Analysis and Beyond’. I have made a few small changes to take account of some more recent developments.     

REPETITION AND FINANCIAL INCENTIVES IN ECONOMICS EXPERIMENTS

Abstract While experimental methods have been an effective tool for economic research, there have been controversies on the methodological aspects. The reason why we need to care about it is clear: if the method in an experiment is not valid, the results from that experiment cannot be valid too. Among other things, the methodological issues of financial incentives and repetition, which are norms in experimental economics, have been at the centre of many debates. While there are previous reviews that investigate financial incentives and repetition separately, our view is that the effects of these two factors are interdependent rather than independent. Thus, our review here is more specific and more conditional, that is, we are interested in the answer to the question, ‘Do we need to use financial incentives conditional on the use of repetition?’ After we discuss the relationship between financial incentives and repetition, we argue, from a review of 44 experimental studies, that using financial incentives would be more necessary to improve the validity of experimental results if an experimenter needs to use repetition.     

CAREER CONCERNS: INCENTIVES AND ENDOGENOUS LEARNING IN LABOUR MARKETS

Abstract. Models of career concerns provide a framework for analysing the actions that may be taken by a manager in an attempt to influence performance signals that the market uses to update its beliefs on her productivity, and the incentive problem that arises if such actions do not coincide with those that maximise the financial return to a firm's owner. This survey provides a formal introduction to the main types of models of career concerns (hidden action and hidden information), and discusses some extensions of these models. Applications of the career concerns framework to explain aspects of managerial behaviour and the form of labour market institutions are emphasised.     

The method of leader's overthrow in networks based on Shapley value

Quantitative methods for leaders' detection and overthrow are useful tools for decision-making in many real-life social networks. In the given research, we present algorithms that detect and overthrow the most influential node to the weaker leadership positions following the greedy method in terms of structural modifications. We employ the concept of Shapley value from the area of cooperative game theory to measure a node's leadership and to develop the leader's overthrow algorithms. Specifically, we introduce a quantitative approach to analyze prospective structural modifications in social networks to make the initially identified network leader less influential. The resulting mechanism is based on the symbiosis of game-theoretic and algorithmic concepts. It presents a useful tool for the technical analysis of the primary structural data in the initial steps of multifaceted quantitative network analysis where the raw data (i.e., linkages) is frequently the only knowledge about interrelations in social networks.     

MATHEMATICAL FORMALISM IN ECONOMICS: CONSEQUENCES AND ALTERNATIVES1

The blinkered insistence upon formalistic modelling has prevented economics from developing in a way that helps us understand the world in which we live. There are alternative approaches to the study of economics that do not use the formal, often closed‐form, models that contemporary mainstream academic economists rely upon. These provide a more promising avenue for future teaching and research.     

CLIMATE CHANGE ISSUES: A DISSENTING VOICE

(The text which follows formed the basis for a brief presentation to a conference held on 22 April 2009 at the Said Business School, Oxford University. The subject of the conference was 'Beyond Kyoto – Green Innovation and Enterprise in the 21st Century'.)
Governments across the world are mishandling climate change issues. The content, the orientation, and in particular the basis and rationale of current policies to curb emissions of (so-called) 'greenhouse gases', are all open to serious question.     

PROBLEMS OF PUBLIC HIGHER EDUCATION IN THE USA: CAUSES AND CONSEQUENCES

High costs and low graduation rates characteristic of 21^st‐century US public higher education stem from the bout of rent‐seeking attributable to the post‐Sputnik explosion in research spending and the consequent crusade to enrol new students, with diminishing concern for academic aptitude. New policies that tighten admission standards, encourage earlier graduation and enhance financial aid for the truly needy would constructively address these problems, as would incentives for faculty members to curtail outside consulting.     

GAME THEORY AND PORT ECONOMICS: A SURVEY OF RECENT RESEARCH

The last decade has seen a significant upsurge of studies seeking to examine the impacts of port agents’ strategic decisions. The outcome has been a wide range of results and conclusions. The aim of this work is to provide a review of this recent research in the port industry that uses strategic interaction approaches from industrial organization and game theory. The paper concentrates on five topics: ownership, relationship between ports and their hinterlands, port authorities and port operators’ relations, capacity investment decisions, and port specialization. We present the objectives, methodologies and results of the papers reviewed, with special emphasis on how models are developed. The results are not always consistent between the works analyzed. On the one hand, this could be due to the complexity of the port industry and the high number of agents that intervene. Researchers need to simplify reality to build their models by imposing restrictive assumptions. On the other hand, results could be very sensitive to the techniques used or to the differences on the port environment of the countries of study. However, some conclusions can be extracted and they present a good starting point to develop more sophisticated models. Finally, we also propose avenues for future research.     

MARKET-DRIVEN CHANGE IN PROFESSIONAL SERVICES: PROBLEMS AND PROCESSES*

This article analyses the processes of market-driven change in two professional service sectors, Research and Development (R&D) and the National Health Service. Building on these sectors’common experiences, the article proposes a general model of market-driven change in professional services, highlighting the complex and multi-level nature of the process. It is argued that, while market-driven change is an increasingly practised and observed phenomenon, its complexity has been widely underestimated. For managers, the problem is one of synchrony between different levels in the change process, with the top strategic level particularly liable to lag changes at other levels. For academic observers of new market forms of control, the risk is of repeating the simplifications of early ‘labour process’analyses of hierarchical control.     

Informing national security policy by modeling adversarial inducement and its governance

The distinction between peace and conflict in contemporary international relations is no longer well-defined. Leveraging modern technology, hostile action below the threshold of war has become increasingly effective. The objective of such aggression is often the influence of opinions, emotions, and, ultimately, the decisions of a nation's citizenry. This work presents two new game theoretic frameworks, denoted as prospect games and regulated prospect games, to inform defensive policy against these threats. These frameworks respectively model (a) the interactions of competing entities influencing a populace and (b) the preemptive actions of a regulating agent to alter such a framework. Prospect games and regulated prospect games are designed to be adaptable, depending on the assumed nature of persuaders' interactions and their rationality. The contributions herein are a modeling framework for competitive influence operations under a common set of assumptions, model variants that respectively correspond to scenario-specific modifications of selected assumptions, the illustration of practical solution methods for the suite of models, and a demonstration on a representative scenario with the ultimate goal of providing a quantifiable, tractable, and rigorous framework upon which national policies defending against competitive influence can be identified.     

INCENTIVES AND SOCIAL NORMS: A MOTIVATION‐BASED ECONOMIC ANALYSIS OF SOCIAL NORMS

Abstract It is now commonplace to regard social norms as a subject of growing interest in the economic literature (e.g. game theoretical approaches based on ‘other‐regarding’ individual preferences, the analysis of the impact of rewards or punishment on individuals’ behaviour through experimental economics as well as field experiments, the revival of the institutionalist tradition spurred on by the influential work of Douglas North and followed by many others and the growing influence of neuroeconomics). In this paper, we focus on the relationship between incentives and social norms and survey the literature that could constitute the foundations of a motivation‐based economic analysis of social norms. Our main findings are that (1) the interaction between incentives and social norms is far from obvious since taking social norms into account involves the introduction of supplementary motives, in addition to self‐interest, into the economic analytical framework; (2) the analysis of the interaction between incentives and social norms resists an approach exclusively in terms of crowding‐in and ‐out effects because it is sensitive to whether it concerns behaviours driven by honour or by social stigma; (3) as a result, it is difficult to precisely evaluate the policy implication of the interactions between incentives and social norms.     

REASONS FOR DELISTING AND CONSEQUENCES: A LITERATURE REVIEW AND RESEARCH AGENDA

This paper discusses the literature on delisting, drawing on USA and international evidence. Given the great heterogeneity in delisting operations, we first consider the standard existing typology based on the initiator of the delisting (the stock market authorities, or the firm itself). Second, while managers often cite high compliance costs (especially due to Sarbanes–Oxley Act implementation) as the official reason for the voluntary delisting of their firm, we highlight that firms face different trade-offs in their delisting decision. We also examine the reasons for involuntary delisting, especially the delisting dilemma faced by stock market authorities when the firm violates the listing requirements. Next, we review the economic consequences of delisting in terms of value creation or value destruction for shareholders. Finally, noting gaps in the literature and other contrasting results, we propose suggestions for future research.     

EVOLUTION AND REVOLUTION: A QUANTUM VIEW OF STRUCTURAL CHANGE IN ORGANIZATIONS

There may be hidden costs in making prompt incremental and piecemeal changes to organizational structure to cope with a new strategy or environment. We shall argue that changeless stable intervals punctuated by infrequent but revolutionary periods of ‘quantum’or multifaceted structural change may sometimes be the most economical strategy. Incremental structural changes may create severe and costly disharmonies as they destroy an integral structural configuration. These costs might outweigh the benefits of adapting structure to changes in strategy and environment. Because such costs may be high it might be necessary to delay changing until they can be justified. Such delays can require subsequent revolutionary structural changes. The applicability of this view of change for different contexts will be discussed.     

信息不对称条件下有效的公共决策模式探析

根据信息经济学的不对称理论和博弈论,公共决策实质上就是非同质性决策参与者的多重利益博弈过程。公共决策模式包括精英决断型、冲突斡旋型、专家建议型、代表协商型和全民公决型五种类型。公共决策产出实质上就是通过这五种模式做出的关系调整与利益平衡。     

STRUCTURAL CHANGE AND GROWTH IN CHINA UNDER ECONOMIC REFORMS: PATTERNS,CAUSES AND IMPLICATIONS

This paper investigates the patterns, causes, and implications of China's structural change and its contribution to China's regional growth. Among many other findings, our regression results show that conditional convergence exists across different regions in China. Regional structural change has a convergence effect and regional openness facilitates regional structural change. Structural shocks and structural transformation had the opposite effect on China's interregional convergence during the 1990s, though the combined effect of overall structural change is a convergence effect. We also find that Chinese regions rely more heavily on structural change for labor productivity growth as the economy evolves. In summary, the results of our empirical analysis support the hypothesis underlying the theoretical model of this paper.     

THE ECONOMIC SCIENCE FICTION OF CLIMATE CHANGE: A FREE‐MARKET PERSPECTIVE ON THE STERN REVIEW AND THE IPCC

The Stern Review and the IPCC believe that anthropogenic climate change is a serious global threat and demands an urgent response. Examining the IPCC's projections of future climate change and Stern's estimates of its costs from a free‐market perspective shows that they are based on flawed methodological assumptions and reflect an excessively optimistic approach to knowledge of the future. The foundations of reliable knowledge for a sound policy framework have not been put in place.     

LINKING CHANGES IN REVEALED CAUSAL MAPS AND ENVIRONMENTAL CHANGE: AN EMPIRICAL STUDY

This article explores the cognitive maps of the dominant coalition of one firm over time. It begins with an overview of the cognitive mapping literature and discusses ‘revealed cognitive maps’ as one strategy for measuring managerial cognitive structures. Next, the revealed cognitive maps from one company over a 20-year period are analysed for their fit with the company's environmental context. The data suggest that the fit between cognitive structures and the environment was less than perfect, and that decision-makers both under-identified and over-identified certain environmental factors. These and other data are discussed within the context of a cognitive approach to managerial thinking.     

Review of Scandinavian leadership development programs: Open and closed customization

Leadership development programs (LDPs) have proliferated and diversified but still usually share the ambition of involving the participants’ on-the-job experiences. Yet, the dominant view hereof is crude, not acknowledging the variety of ways used to accomplish it. The Scandinavian context is illustrative for reviewing what we term ‘customization devices’ because of its tradition for LDPs with collective reflection, practice orientation, and broad participation. This review curates and synthesizes 31 studies evaluating empirical experiences with customization devices in Scandinavian university-based LDPs from no earlier than 2010. Such devices fall within three key categories, namely theories, cases, and relationships, and have three key effects: distancing from practice, dedicating to the program, and devising future action. Based on our findings, we challenge the dominant view that open enrollment programs cannot adequately mobilize participants’ experiences by theorizing the distinction between open and closed customization. The review further serves as a resource for LDP designers and instructors to carefully choose and mix customization devices that are complementary in their effects.     

INNOVATION AND COMPETITION IN GENERATION AND RETAIL POWER MARKETS

There has been considerable merger activity in EU energy markets in recent years. It could be argued that competition authorities should be required to take into account potential innovation effects of mergers. In the UK, regulators are now trying to achieve multiple objectives within the current framework. There is a danger that if markets are expected to deliver mutually incompatible objectives they will be unable to achieve any of them.