Interdependence and spillovers: is firm performance affected by others’ innovation activities?

The creation of new knowledge is a case in which agents' behaviour can affect the performance of other actors positively, given that new knowledge creates positive externalities in the market. In this context, we investigate the existence of performance spillovers associated with innovation activities by quantifying the innovation produced in surrounding firms and controlling for the fact that a firm is itself an innovation producer. We use data from the Third Community Innovation Survey (CIS III) that measures innovation in a broad way, not reducing it to R&D and patents, which departs from previous literature on spillovers. Furthermore, to tackle the endogeneity of the innovation variables on the firm production decision, we resort to the firm intellectual property protection methods as an instrument. We found a positive spillover of innovation on firm value added. The results also show that process innovation spillovers are more prevalent than product innovation spillovers.     

Why are some favourite-longshot biases positive and others negative?

Most studies of both pari-mutuel and fixed-odds betting markets have shown a systematic tendency for the expected return to bets at lower odds to exceed those at higher odds. Some work, however, has revealed in certain markets the absence or even reversal of this bias. We present a model which distinguishes two separate types of bettor, and use this to demonstrate how transactions costs, the extent of public information, and consumption benefits of betting can explain the disparities. Our empirical evidence, taken from a fixed-odds market, lends support to our theoretical conclusions.     

Why some product innovations are licensed and others are not?

We study in a Stackelberg industry the licensing of a product that embodies an innovation (quality-improving product) whose owner may be the firm that plays as a leader or a follower in setting output in the the product market. We find that the innovation is transferred (and social welfare is reduced) if its owner is the market-leader firm. However, if the innovation is in the hands of the market-follower firm, it is not licensed, even though licensing would be welfare enhancing. Thus, subsidizing R&D with the mandatory licensing of the resulting innovation may be a socially desirable policy.     

Plays nice with others? Multiple ecosystems,various roles and divergent engagement models

In strategic management, the term meta-organisation is discussed as a network of firms and individuals in which members coexist, collaborate and evolve through a set of relationships and together form a larger organism. We focus on the meta-organisation form of an ecosystem in the IT industry, which often is based around a technical architecture or platform. Studies often discuss one network and selected members in such a network, but few mention that firms can work in multiple ecosystems and need to apply divergent engagement models. We study how firms engage in multiple ecosystems through three qualitative case studies. The article contributes with the following: (1) firms often operate in multiple ecosystems for which they need to dynamically adapt their engagement strategy. (2) Firms are striving to balance between strategic divergences: power versus symbiosis and a collaborative approach versus a competitive approach.     

Can privatization be a catalyst for environmental R&D and result in a cleaner environment?

In this paper we explore whether privatization helps to catalyze a firm's environmental research and development (ER&D) and improve environmental quality. By defining ER&D as the effort undertaken by a firm to reduce its pollution per unit of output, we find in a duopoly framework that privatization cannot catalyze both public and private firms’ ER&D efforts simultaneously; it can increase one but decrease the other firm's investment, or it may even lower both firms’ ER&D investments. Moreover, when production causes severe environmental damage, or the imposition of environmental taxes poorly internalize the pollution externality, privatization may result in a poorer environment. For the sake of having a cleaner environment, policy-makers can impose higher environmental taxes on a highly polluting industry when it is being privatized.     

Who trusts others more? A cross-European study

Using the European Social Survey, the paper documents the endowments and the individual determinants of trust across Europe. Self-declared trust is higher in northern countries, in particular Scandinavia; it is lower in southern countries, in particular Italy, Portugal and Greece. At the EU-15 level, we find that a number of factors, such as schooling, family background, labor market status, and a recent history of traumatic experiences, are associated with trust. We also find evidence of heterogeneity for some of the determinants across European countries.     

By chance or by choice? Biased attribution of others’ outcomes when social preferences matter

Experimental Economics - Decision makers in positions of power often make unobserved choices under risk and uncertainty. In many cases, they face a trade-off between maximizing their own payoff and...     

Putting a price tag on others’ perceptions of us

Standard economic theories assume that people are self-interested and their wellbeing solely dependent on their own material gains or losses. Unless they have an impact on monetary payoffs, the perceptions of anonymous individuals are irrelevant to people’s decision making. However, a large body of research in sociology and social psychology demonstrates that self-identity is developed through one’s understanding of how one is perceived by others. Using (Cooley’s, Human nature and the social order, 1964) concept of the “looking-glass self” as a framework, we evaluate experimentally whether or not people care about the imputed judgment of anonymous others arising from their imagination of their perceptions. We implemented variants of the Becker–DeGroot–Marschak mechanism to elicit the monetary value attached to the perceptions by participants. In one variant, only nonnegative bids were allowed, while in another, negative bids were allowed. We show that in an environment in which the perceptions of others are only conveyed to participants anonymously and privately, self-interested individuals exhibited strong negative perception avoidance even though the perceptions have no impact on their monetary payoff. The participants were willing to spend a significant amount in order to avoid confirming the supposedly negative perception. Thus, for them, ignorance was truly bliss. We also show that, in the absence of the audience effect, the fair-minded participants adopted a neutral attitude towards the perception of them as fair.     

Macroeconomic expectations and consumer sentiment during the COVID-19 pandemic: The role of others’ beliefs

This paper investigates the effect of information about cross-country ratings of the government’s and the public’s reaction to the COVID-19 pandemic on consumers’ macroeconomic expectations and sentiment. We conduct consumer surveys with randomized control trials (RCTs) in two waves in Thailand and Vietnam. The information treatments have the strongest effect when the information shown contradicts consumers’ prior beliefs. In the first survey, conducted when the first lockdown was eased, treatment effects are stronger in Vietnam, causing more optimistic expectations and sentiment. In the second survey, conducted at the start of the second wave of infections, treatment effects are stronger in Thailand, causing a more pessimistic outlook.     

Learning from private and public observations of othersʼ actions

We study the diffusion of dispersed private information in a large economy, where agents learn from the actions of others through two channels: a public channel, such as equilibrium market prices, and a private channel, for example local interactions. We show that, when agents learn only from the public channel, an initial release of public information increases agents? total knowledge at all times and increases welfare. When a private learning channel is present, this result is reversed: more initial public information reduces agents asymptotic knowledge by an amount in order of $\log (t)$ units of precision. When agents are sufficiently patient, this reduces welfare.     

Relationship between ecological economics and circular economy, eco-industry, cleaner production, and other relevant categories

Eco-industry, circular economy, cleaner production, industrial ecology or industrial ecosystem and other subjects are all categories related to sustainable developinent. This paper studies the relations and differences between the four categories and sustainable development as well as ecological economics. Circular economy, eco-industry, industrial ecosystem and cleaner production were put forward during the revolution in “end treatment pattern” of traditional industrial society. Industrial ecology, eco-industry and circular economy theory are three content expansions of cleaner production. Ecological economics is of instructive function theoretically and methodologically for circular economy, eco-industrial, cleaner production and industrial ecology. Circular economy theory is easier to be accepted, compared with ecological economics theory. And circular economy in nature is the complete application of ecological economics theory.     

Can We—and Should We—Measure Well-Being?

In this article, I argue that recent criticisms of happiness research in economics can be extended to any conception of well-being used for scientific or policymaking purposes. These criticisms are both practical and ethical: well-being is not only impossible to define, measure, or implement, but its use also offends human dignity through unjust distribution of harm and value substitution. On this basis, I recommend the abandonment of welfare economics and urge social economists to propose new approaches to addressing social problems that are more focused and respect the dignity of persons.     

Do Austrian men and women become more equal? At least in terms of labour supply!

We study the development of wage elasticity of labour supply for Austrian men and women over time using comparable and representative survey data for the 1980s and 1990s. The elasticity of men is relatively low and constant over time, similar to the behaviour of single women. Most remarkable is the almost continuous reduction in the labour supply reactions of married women: while their elasticity was still several times larger at the beginning of the 1980s, they approached rapidly the much less elastic behaviour of men. These developments are important for the analysis of deadweight losses of taxation as well as the effects of tax reforms and wage subsidy programs.     

Adjustment of US external imbalances: At what horizon?

The relative contribution of the trade and financial channels for correcting cyclical external imbalances of the US is decomposed by horizon. Valuation effects contribute for horizons up to a year, while trade flows for horizons up to 4 years.     

The determinants of cleaner energy innovations of the world’s largest firms: the impact of firm learning and knowledge capital*

In this paper, we address the determinants of clean energy inventions by 946 large firms. We use a new set of large firms’ patent portfolios and we broaden and deepen existing literature on this issue in two main ways: first, we conduct our study directly at the firm level and not at the industry or national levels and second, we do not focus on a single industry but encompass all industrial sectors. Drawing on firm (internal and external) knowledge and knowledge accumulation, we show there is a robust positive association between the (past) knowledge accumulated capital related to clean technologies and the number of inventions produced in that field, even after controlling for industry and nation fixed effects and other factors. The same relation works for (past) knowledge-accumulated capital in other (non-clean) technologies. However, the relation’s impact on the number of clean inventions produced is much lower. The magnitudes of our coefficient are in line with that obtained previously on firms in the auto-industry or at the sectoral level.     

Self-serving altruism? The lure of unethical actions that benefit others

In three experiments, we propose and find that individuals cheat more when others can benefit from their cheating and when the number of beneficiaries of wrongdoing increases. Our results indicate that people use moral flexibility to justify their self-interested actions when such actions benefit others in addition to the self. Namely, our findings suggest that when people's dishonesty would benefit others, they are more likely to view dishonesty as morally acceptable and thus feel less guilty about benefiting from cheating. We discuss the implications of these results for collaborations in the social realm.     

Does culture influence asset managers’ views and behavior?

This research enters new ground by presenting comparative survey evidence on asset managers’ views and behavior in the United States, Germany, Japan and Thailand. Relying on Hofstede's four cultural dimensions, we find that cultural differences are most helpful in understanding country differences which cannot be explained by pure economic reasoning. In short, controlling for various determinants, the dimension of more Individualism predicts less herding behavior, more Power Distance leads to older and comparatively less experienced managers in the upper hierarchy, Masculinity brings men into top positions and to higher volumes of assets under personal responsibility, and Uncertainty Avoidance is related to higher safety margins against the tracking error allowed and relatively more research effort. These consequences, i.e. the culturally different importance of herding, age, experience, gender, tracking error and research effort, clearly affect investment behavior, although in a complex way.     

When and how politicians take ‘scandalous’ decisions?

We study the decisions of a politician who maximizes his probability of being re-elected, which depends on the enactment of legislative instruments defined ‘scandalous’ because of their highly redistributive content. The agents are a politician and the voters; the legislative instruments available to the legislator are ordinary and executive laws, which differ according to their visibility. The theoretical model predicts that ‘scandalous’ legislation tends to be passed at the beginning of the legislature, while ‘non scandalous’, broader legislation, is approved mostly at the end of the legislation. Scandalous decisions, moreover, tend to be implemented by means of less visible executive legislation, while ordinary acts are mainly used to implement non scandalous decisions. This explanation of the genesis of legislation cycles is consistent with the findings of the empirical literature.     

Directors’ and officers’ liability insurance and firm innovation

In this paper, we investigate the impact of directors’ and officers’ insurance (D&O insurance) on firm innovation in China. We find that D&O insurance is significantly positively associated with firm innovation, which indicates that D&O insurance enhances managers’ tolerance for failure. To address endogeneity concerns, we adopt the propensity score matching method and difference-in-differences approach. We find that firms with D&O insurance have a stronger risk bearing capacity. Further analyses show that the impact of D&O insurance on firm innovation is more pronounced in firms with a better legal environment, male executives, and stronger external supervision.