The agency challenge: How Woolley,Woodley, and other cases rearranged the hotel-management landscape

A series of court cases have redefined the relationship between hotel owners and their management companies and their frachisors. Beginning with a 1991 California decision, courts have determined that hotel-management firms are agents for the owners with whom they contract—even if the management contract says otherwise. In part, a key indication of agency is when one party provides services to the other for a fee—which is the nearly universal arrangement in a management contract. Two key aspects of agency have tripped up such industry giants as Embassy Suites, Hyatts, Marriott, Radisson, and Sheraton. The first element of agency is that the principal (i.e, the owner) can dismits the agent at any time, despite what the parties' contract says. Second, the management company as agent is required to act in the principal's best interest. So, when a Washington, D.C., jury determined that some practices common in the hotel industry are not in the owner's best interest, that jury ordered Sheraton to pay compensatory and punitive damages to the hotel's owners. Franchisors may also be considered as “agents” when they services to their licenses—as occurs, for instance, when hotel chains provide reservation services for a franchise. Following the logic of the management-contract cases, a New York court determined that Radisson was an agent for a hotel in that city, even though it did not operate the hotel itself, because it did provide a serve (the reservation system) for a fee. Taken together, the lesson to be learned from the cases reviewed in this article is that, no matter what the owner-manager contract states on paper, it is the characteristics of the relationship and existing legal precedent that will dictate the terms during any dispute.     

Analyzing a quantitative coordination relationship

Coordination is a crucial behavior in cooperative distributed problem solving (CDPS). Analyzing coordination requires an understanding of the interplay between the agents, their problem, and their environment. The core behaviors ofdistributed coordination in CDPS systems are the coherent specification and scheduling of tasks over the set of distributed agents working on sets of interrelated problems. The complexity of, and uncertainty about, the problem interrelationships make distributed task coordination difficult. This article describes a causal model of this process that links the interrelationships, calledcoordination relationships, to the local scheduling constraints of distributed agents. Besides coordination relationships, environmental uncertainty and the lack of infinite computational resources also make distributed coordination difficult.It is not only the presence or absence of a coordination relationship that is important, but its quantitative properties: how likely is it to appear, how significant is its effect, and so on. These aspects determine the usefulness of a particular coordination relationship in the context defined by an environment, a problem to be solved, and an agent architecture. This article discusses the analysis of coordination relationships, using as an example our abstract model for thefacilitates relationship. We detail the derivation and assumptions of this model and apply it to the design of a generalized coordination module that is separate from, and interfaces cleanly with, the local scheduler of a CDPS agent. A set of simulation experiments is described that test our assumptions and design process in the coordination of a group of real-time problem-solving agents.     

Consumers engaged in a member-gets-member campaign: an agency perspective

In this article, the use of member-gets-member-campaigns is perceived as an agency problem: the agent (a consumer) is going to take some action on the principal's behalf (a manufacturer). However, before the principal decides to engage the agent in their member-gets-member campaign, the principal needs to know whether a particular agent has the appropriate characteristics and whether the agent will have the proper motivations to behave in accordance with the principal's goals. Moreover, the principal needs to know how the agent's ideas and behaviour can be changed. In this article, concepts from opinion leadership, social network theory and attitude research are used to test and evaluate the characteristics of the agent, who voluntarily participated in a member-gets-member campaign of a large producer of several brands of dog food. The outcomes show that agents that participate in the member-gets-member campaigns have characteristics which might be desirable for the manufacturer: these agents are opinion leaders and have a positive brand attitude. To some extent, these agents also ask permission from the consumer whether they are allowed to make them members and seek membership from people with whom they have close ties. The results also show that the agents positively respond to incentives used by the manufacturer. In general, the agents are not motivated to oversell the membership to the consumers.     

Planning to please: Following another agent's intended plan

In this article we analyze a particular model of control among intelligent agents, that ofnon-absolute control. Non-absolute control involves a “supervisor” agent that issues orders to a “subordinate” agent. An example might be a human agent on Earth directing the activities of a Mars-based semi-autonomous vehicle. Both agents operate with essentially the same goals. The subordinate agent, however, is assumed to have access to some information that the supervisor does not have. The agent is thus expected to exercise its judgment in following orders (i.e., following the true intent of the supervisor, to the best of its ability). After presenting our model, we discuss the planning problem: how would a subordinate agent choose among alternative plans? Our solutions focus on evaluating the distance between candidate plans, and is appropriate to any scenario in which one agent wants to follow (as much as possible) another agent's plan.     

Inefficiencies in a Model of Team Formation

We consider a two period model with complete information involving three agents, two on one side of the market, and one on the other. The agents on the same side of the market bargain, among themselves, over whether to form a team or not, and also with the other agent, either singly or as a team, regarding the payoffs. We characterize the subgame perfect Nash equilibrium of this game. We find that the behavioral assumptions regarding the agents play a critical role in the outcome. If the agents are combative then the outcome is efficient. Whereas if the agents are peace loving, and the discount factor is large, then the outcome may involve delay, as well as (inefficient) team formation.     

“I love it” or “I hate it”? The positivity effect in stated preferences for agent evaluation

Consumers often interact with agents to obtain advice about products and services. A consumer’s evaluation of an agent as a source of personalized advice depends, in part, on the extent to which the consumer believes the agent knows and shares her tastes. In this research, we show a positivity effect in the agent evaluation process, whereby consumers perceive alternatives they love (compared to hate) to be more informative to agents about their tastes, and hence more diagnostic to agents for predicting their future evaluations. Further, we show that this positivity effect is moderated by the agent’s level of agreement with the consumer, and is driven by the greater accessibility of information about loved, compared to hated, alternatives. We discuss the implications of these results for interpersonal judgments and agent choice.     

GAMBLING IN CONTESTS WITH REGRET

This paper discusses the gambling contest introduced in Seel and Strack (2013, Gambling in Contests, Journal of Economic Theory, 148(5), 2033–2048) and considers the impact of adding a penalty associated with failure to follow a winning strategy. The Seel and Strack model consists of n‐agents each of whom privately observes a transient diffusion process and chooses when to stop it. The player with the highest stopped value wins the contest, and each player's objective is to maximize her probability of winning the contest. We give a new derivation of the results of Seel and Strack based on a Lagrangian approach. Moreover, we consider an extension of the problem to a behavioral finance context in the sense of regret theory. In particular, an agent is penalized when her chosen strategy does not win the contest, but there existed an alternative strategy that would have resulted in victory.     

Stakeholder Approach: What Effects Should We Take into Account in Contemporary Societies?

In recent years, the stakeholder approach has been widely applied in the debate on corporate social responsibility (CSR). Although many authors of this approach have reviewed many elements of the model, they have unconditionally accepted several criteria assumed by Freeman (1984) to identify stakeholders. In general, stakeholder authors have assumed that (a) the company establishes dyadic relationships with other agents, and (b) decisions made by a company only have foreseen and direct effects on other agents. These criteria have enabled researchers to understand simple processes. However, they have also prevented researchers from explaining how action comes about, and how responsibility is shared, in many complex processes taking place in contemporary societies. Such complex processes involve many agents, and each decision can generate unexpected effects which accumulate or disseminate. Furthermore, the normative structure governing these processes can affect and/or be affected by the actions of agents. In this study, we propose new criteria to expand the stakeholder model and facilitate the study of CSR in such processes.     

Determinants of repurchase intentions of real estate agent services: Direct and indirect effects of perceived ethicality

Research on the psychological determinants of consumer repurchase decisions for professional services is limited. The authors focus on real estate agents and develop a model of determinants of repurchase intentions of agent services. The model was tested on a sample of clients (property sellers) for a Scandinavian real estate agent. The perceived ethicality of the service provider was found to influence repurchase intentions in three different ways. Clients’ co-production motivation moderated (increased) the effect of perceived ethicality. The findings have important implications for researchers and managers of real estate agent services.     

Venture Capitalists, Syndication and Governance in Initial Public Offerings

This paper examines the development of effective boards in venture capital (VC)-backed initial public offerings. It argues that VC-backed IPOs suffer from two sets of agency costs which are related to principal–agent and principal–principal relationships between the founders and members of the VC syndicate. Using a unique sample of 293 entrepreneurial IPOs in the UK it shows that VC syndicates invest in relatively more risky firms. VC-backed IPOs have more independent boards than IPOs with no VC involvement, with board independence being higher in syndicated VC-backed firms. These results are consistent with assumption that these governance factors are used to mitigate agency costs associated with VC involvement in IPO firms. We also find that in syndicated IPOs there is a higher equity presence of passive private equity firms investing alongside VC firms.     

Meta-level Coordination for Solving Distributed Negotiation Chains in Semi-cooperative Multi-agent Systems

A negotiation chain is formed when multiple related negotiations are spread over multiple agents. In order to appropriately order and structure the negotiations occurring in the chain so as to optimize the expected utility, we present an extension to a single-agent concurrent negotiation framework. This work is aimed at semi-cooperative multi-agent systems, where each agent has its own goals and works to maximize its local utility; however, the performance of each individual agent is tightly related to other agents’ cooperation and the system’s overall performance. We introduce a pre-negotiation phase that allows agents to transfer meta-level information. Using this information, the agent can improve the accuracy of its local model about how other agents would react to the negotiations. This more accurate model helps the agent in choosing a better negotiation solution for a distributed negotiation chain problem. The agent can also use this information to allocate appropriate time for each negotiation, hence to find a good ordering of all related negotiations. The experimental data show that these mechanisms improve the agents’ and the system’s overall performance significantly.     

Search reduction in hierarchical distributed problem solving

Knoblock and Korf have determined that abstraction can reduce search at a single agent from exponential to linear complexity (Knoblock 1991; Korf 1987). We extend their results by showing how concurrent problem solving among multiple agents using abstraction can further reduce search to logarithmic complexity. We empirically validate our formal analysis by showing that it correctly predicts performance for the Towers of Hanoi problem (which meets all of the assumptions of the analysis). Furthermore, a powerful form of abstraction for large multiagent systems is to group agents into teams, and teams of agents into larger teams, to form an organizational pyramid. We apply our analysis to such an organization of agents and demonstrate the results in a delivery task domain. Our predictions about abstraction's benefits can also be met in this more realistic domain, even though assumptions made in our analysis are violated. Our analytical results thus hold the promise for explaining in general terms many experimental observations made in specific distributed AI systems, and we demonstrate this ability with examples from prior research.This research has been sponsored, in part, by the National Science Foundation under grants IRI-9015423 and IRI-9010645, by the University of Michigan Rackham Graduate School, and by a Bell Northern Research Postgraduate Award.     

Exploring the Relationship Between Export Intensity and Exporter Characteristics,Resources, and Capabilities: Evidence From Chile

This study focuses on exporters in Chile in order to compare the characteristics, resources, and capabilities for export success (RACFES) possessed by high, medium, and low intensity exporters. Data for this study were collected throughan Internet survey of Chilean manufacturers that export. Of the 480 companies in the sample, 133 responded to the questionnaire consisting of 69 items, yielding a total response rate of 28%. The analysis of variance procedure was used to analyze linear items and the chi square procedure was used for nonlinear items. The results indicated that export intensity in Chile is very strongly associated with firms that are smaller in size, have had export operations for longer periods of time, are highly involved in foreign markets, and are vertically integrated with their international target markets. These firms have also been very successful in overcoming export barriers. They make greater use of promotional strategies to expand their export markets and use sales agents as a means for reducing distribution costs. These firms are more likely to have vertically integrated their Chilean operation with their international target markets and to have created working international networks. The major limitation of this research is that it was carried out in only one South American country, with a rather limited sample size. A practical implication of this study is that companies in small countries, endowed with comparative advantages based on natural resources, can successfully penetrate export markets by imitating Chile's thriving export companies. Export penetration factors for small, resource-based countries like Chile are not very different from those for large developed countries.     

The Role of Distribution Channel Agents in Promoting Innovative Activity in Small Retail Businesses: A Case-Study of IT Adoption

The successful application of information technology (IT) offers the retailer, large or small, a decisive source of competitive advantage. Smaller retailers, however, have generally been slow to embrace the new technologies of sales data capture, analysis and communication. Within the distribution channel, four intermediary agents - wholesalers, trade associations, voluntary groups and franchisors - are well-placed to encourage more widespread take-up of IT among small retailers. The role of each agent is examined through the presentation of survey-derived information, and it is suggested that none of these agents has exploited widely this potential to promote innovation adoption. However, the presence of identifiable geographical and organisational clusters of small retailers using IT illustrates the important role being played by some of these agents in promoting IT adoption and indicates ways in which many others could encourage innovative activity.     

Sustainability Practices and Corporate Financial Performance: A Study Based on the Top Global Corporations

Sustainability is concerned with the impact of present actions on the ecosystems, societies, and environments of the future. Such concerns should be reflected in the strategic planning of sustainable corporations. Strategic intentions of this nature are operationalized through the adoption of a long-term focus and a more inclusive set of responsibilities focusing on ethical practices, employees, environment, and customers. A central hypothesis, that we test in this paper is that companies which attend to this set of responsibilities under the term superior sustainable practices, have higher financial performance compared to those that do not engage in such practices. The target population of this study consists of the top 100 sustainable global companies in 2008 which have been selected from a universe of 3,000 firms from the developed countries and emerging markets. We find significant higher mean sales growth, return on assets, profit before taxation, and cash flows from operations in some activity sectors of the sample companies compared to the control companies over the period of 2006–2010. Furthermore, our findings show that the higher financial performance of sustainable companies has increased and been sustained over the sample. Notwithstanding sample limitation, causal evidence reported in this paper suggests that, there is bi-directional relationship between corporate social responsibilities practices and corporate financial performance.     

Collaboration for R&D Projects between the Industry and External Agents: Evidence from Manufacturing Companies in Peru

In this article we use the innovation survey of the manufacturing industry of Peru to identify cooperation behaviors for research and development (R&D) projects among companies and external agents in general. Likewise, we also find cooperation behaviors among the industry and the following external agents: university, technical centers, suppliers, customers, and companies of the same group, competitors, guilds, and consultants. Within the specific agents, the university is considered a cooperation agent for R&D projects. We use the survey of innovation in the manufacturing industry of Peru conducted in 2015, which resulted in 1447 Peruvian companies being surveyed. Evidence was obtained as to the degree of the tie between the industry and external agents for cooperation in R&D projects, giving relevance to variables such as investment, resources, and degree of innovation. Our results show that investment is an important factor for cooperation with external agents. Additionally, companies that have innovated at some point seek to cooperate with external agents. Finally, the importance of the university is demonstrable, thus, companies that invest in R&D seek to cooperate with the university.     

Communication strategy in partnership selection

This paper explores the communication and choice strategies of economic agents deciding on a partnership, where agents are uncertain about their payoffs, and payoffs of each agent depend on and are partly known to the potential partner. Business examples of such decisions include mergers, acquisitions, distribution channel partners, as well as manufacturing and brand alliances. Dating and marriage partner selection are also natural examples of this game. The paper shows that (a) when communication is informative, the communication strategy as a function of the expected payoff of the partnership involves pretending fit when expected payoff is high, pretending misfit when expected payoff is low, and telling the truth in the intermediate range, and (b) the condition for informativeness of communication is that the distribution of payoffs has thin tails. Furthermore, the paper shows that the possibility of communication, even when this communication is not restricted to be truthful, can decrease the expected payoff for both the sender and the receiver; in particular, it can decrease the expected social welfare.

Conducting Dyadic Multiple Issue Negotiation Experiments: Methodological Recommendations

We take a critical, yet constructive look at the literature that focuses on multiple issue negotiation experiments. Our purpose is to offer suggestions for improvement when conducting such experiments. We focus on experiments, which are conducted using an externally imposed value point structure for the negotiators across issues together with background context information. Negotiator performance in such experiments is generally poor in the sense that Pareto inferior settlements are typically generated. A possible explanation is that negotiators sometimes follow the externally imposed value points and sometimes their own values pertaining to the context. Hence we conclude that it would be better if multiple issue negotiation experiments would not be based on an apriori given value point structure - unless we have compelling reasons for it - particularly if no agents are used. The common argument against doing this is that we cannot then identify Pareto optimal or Pareto preferred settlements for the subjects. Recent research integrating the fields of Multiple Criteria Decision Making (MCDM) together with negotiation analysis, however, provides a possible solution to this problem. An experiment conducted by the authors is used to illustrate our methodological recommendations.     

Sweatshops and Free Action: The Stakes of the Actualism/Possibilism Debate for Business Ethics

Whether an action is morally right depends upon the alternative acts available to the agent. Actualists hold that what an agent would actually do determines her moral obligations. Possibilists hold that what an agent could possibly do determines her moral obligations. Both views face compelling criticisms. Despite the fact that actualist and possibilist assumptions are at the heart of seminal arguments in business ethics, there has been no explicit discussion of actualism and possibilism in the business ethics literature. This paper has two primary goals. First, it aims to rectify this omission by bringing to light the importance of the actualism/possibilism debate for business ethics through questions about the ethics of sweatshops. Second, it aims to make some progress in the sweatshop debate by examining and defending an alternative view, hybridism, and describing the moral and practical implications of hybridism for the sweatshop debate.

     

Decision Support in Virtual Organizations: The Case for Multi-Agent Support

The new economy, which is being formed by the Internet-based e-commerce and the now emerging mobile commerce, may become what Martin calls a cyber economy. This will combine traditional business with the new e- and mobile business, and will be driven by a new breed of online customers, who operate both wired and wireless networks, who will expect fast delivery, easier transactions and more fact-based information. The cyber economy requires that business is operated with virtual organisations and that decision making in this context – virtual organisations and the cyber economy – will require new and advanced forms of decision support. We have found that a useful decision platform can be built around hyperknowledge and the use of multiple software agents, if the core of these agents is built on fuzzy logic and approximate reasoning.