Fair,Efficient and Envy-Free Bargaining: An Experimental Test of the Brams-Taylor Adjusted Winner Mechanism

The Adjusted Winner mechanism for two-player bargaining has been theoretically shown to produce “fair” (efficient and envy-free) outcomes (Brams and Taylor 1996). We study this claim experimentally in a bilateral bargaining game of incomplete information for two divisible goods using three information conditions. Results indicate that the Adjusted Winner mechanism can be quite effective in achieving both efficient, equitable and envy-free outcomes in an experimental setting but results vary greatly depending on the knowledge that each party has of the preferences of their bargaining partner. Under conditions of common knowledge, when players have competing preferences, their bilateral decisions converge toward efficient outcomes, yet only one-third can be classified as “envy-free.” In an environment where there is more uncertainty about preferences, pronounced strategic bidding emerges yet the result is twice as many envy-fee outcomes with increased levels of efficiency. Despite the fact that players dramatically misrepresent their true valuation for objects when ordinal preferences are commonly known to be complementary, both efficiency and envy-freeness approach maximum levels.     

中国本土文化环境下的商务"关系":一项探索性研究

Recently, guanxi has become one of the hottest topics in domestic academia. Although relationship and guanxi are the same in Chinese characters, significant differences exist between the “relationship” in the western academic context and what Chinese people are familiar with, the Chinese “guanxi”. The indiscriminate imitation of the western relationship marketing in China neglecting the Chinese native culture context is detrimental to a true and thorough understanding of the Chinese relationship marketing practice. Therefore, it is of great significance to conduct research on guanxi in the Chinese native commercial context. Based on domestic and foreign literature review, this paper uses a qualitative research method including content analysis and focus group to get a thorough understanding of guanxi both from the academia and from the practitioners, followed by quantitative analysis methods including questionnaire investigation and factor analysis to develop a native commercial guanxi concept scale. After comparison of the qualitative and quantitative research results, an integrated guanxi concept system is built, which lays foundation for the future guanxi research. __________ Translated and revised from Yingxiao kexue xuebao 营销科学学报 (Journal of Marketing Science), 2006, 9(1): 1–14     

An evaluation of corporate governance evaluation, governance index (CGI NK ) and performance: Evidence from Chinese listed companies in 2003

In the present paper, based on samples of 2003, empirical analyses of Corporate Governance Index (CGI ^NK ) and its six dimensions of listed companies in China, the index of controlling shareholders’ behaviors, board governance index, top management governance index, information disclosure index, stakeholders’ governance index, and supervisors committee governance index, are carried out and the results show that CGI ^NK is positively associated with the return on assets (ROA), net assets per share (NAPS), earnings per share (EPS), operating cash flow per share (OCFPS), total assets turnover (TAV), rate of total assets growth (ITA) and Z-score. These indicate that good corporate governance mechanisms improve profitability, stock expansion ability, operating efficiency, growth and development potential, as well as financial flexibility and safety of listed companies. Corporate governance mechanisms of controlling shareholders, board of directors, top management, information disclosure, stakeholders and supervisors committee are largely responsible for decision-making and decision-execution mechanisms, and furthermore, they have direct and profound effects on the performance and value of listed companies. Translated from Zhongguo Gongye Jingji 中国工业经济 (China Industrial Economy), 2006, (4): 98–107     

Out of the Mouths of Babes: Business Ethics and Youths in Asia

A model of corporate ethics and social responsibility (CESR) was developed and empirically tested among Chinese business undergraduates in Hong Kong and Singapore. As predicted, it was found that CESR beliefs were negatively related to Machiavellianism and two Confucian concepts, guanxi (interpersonal connections) and mianzi (face). CESR beliefs were also lower among Hong Kong than Singaporean youths. The negative effects of guanxi, mianzi, and Machiavellianism were more pronounced for the Hong Kong than Singapore sample. Implications of these findings are discussed and directions for future research suggested.     

Whistle-Blowing for Profit: An Ethical Analysis of the Federal False Claims Act

This paper focuses on the 1986 Amendments to the False Claims Act of 1863, which offers whistle-blowers financial rewards for disclosing fraud committed against the U.S. government. This law provides an opportunity to examine underlying assumptions about the morality of whistle-blowing and to consider the merits of increased reliance on whistle-blowing to protect the public interest. The law seems open to a number of moral objections, most notably that it exerts a morally corrupting influence on whistle-blowers. We answer these objections and argue that the law is not objectionable on these grounds. Since there are no compelling moral objections to the law, it is appropriate and acceptable to judge the law in terms of its economic costs and benefits. We assess the most salient of these and conclude that the benefits outweigh the costs. We suggest that a mechanism similar to the Act should be considered for protecting stockholders’ interests in the private sector. We conclude by making several proposals for improving the existing legislation. The authors' names are listed in alphabetical order. An earlier version of this paper was presented to the Society for Business Ethics August 2004.     

Measuring the part worth of the mode of transport in a trip package: An extended Bradley–Terry model for paired-comparison conjoint data

This study measures the travelers' perceived change in utility by accepting one of the modes of transport air, rail, or bus as one component of a packaged city trip. The part-worth values for the trip product elements are expected to depend on a number of traveler characteristics. The predictors hypothesized are city travel experience, general modal preference, socio-economic status, and car ownership. In the survey, the combinations of trip attributes differed between the two subgroups of leisure and business travelers. The leisure travelers rated three levels of mode, length of stay, and price, but only one level of the hotel category. The business travelers were shown four mode alternatives and only two levels for each of the other trip product elements. The conjoint measurements were elaborated by fitting an Extended Bradley–Terry Model. Demonstrating the application of the EBTM is the main purpose of the paper. The EBTM offers several advantages over the more popular versions of conjoint analysis. It correctly treats ties and allows for simultaneous estimation of the trip package (‘object’) parameters, object covariates (trip attributes), subject covariates (traveler characteristics) and their interactions. For both the business and the leisure travelers, the mode of transport dominated the assessment of a city trip package. For leisure tourists, e.g., switching from train 2nd class to an economy flight boosted the trip package more than twice as much as replacing train for bus. A variation of the package price was much more important for the leisure than for the business travelers. The socio-economic status proved to be an important factor and was particularly influential among the business travelers. In the leisure tourists' sub-sample age was not only important for valuing the mode of transport, but had a preferential impact for all trip components. Finally, the limitations of this demonstration study that discourage extrapolation to city travelers in general are emphasized.     

Ethics and Disclosure: A Study of the Financial Performance of Firms in the Seasoned Equity Offerings Market

In this article, we examine the association between ethics and disclosure and the impact of this association on the long-term, post-issue performance of seasoned equity offerings (SEOs). We argue that firms with extensive disclosure are less likely to face information problems, and more likely to lead to an active shareholder monitoring, and therefore, engage in fewer unethical activities, such as aggressive earnings manipulation, and have better long-term, post-issue performance. Consistent with these predictions, this study presents evidence that disclosure is negatively related to unethical earnings manipulation and positively associated with long-term, post-issue performance. In particular, we find that long-term, post-issue SEO underperformance is significantly less for firms with extensive disclosure and conservative earnings management than firms with less disclosure and aggressive earnings management. We interpret this evidence to mean that over the long run, the capital market values ethical financial reporting and corporate efforts to incorporate social responsibility into their decision-making processes, for example, by enhancing information transparency through voluntary disclosure.      

Interest rates and the recent weakness in M2: An extension to the P model of inflation

A model of changes in the deflator for nondurables and services consumption expenditures is estimated simultaneously with the error-correction model of M2 growth described in Koenig (1996). The inflation forecasts generated by the joint model have marginal predictive power for changes in the GDP deflator and exhibit none of the systematic bias which has plagued the original formulation in recent years. Output-market slack is of little use in predicting changes in the consumption deflator, but there is evidence of a speed effect.