Living on the slopes: entrepreneurial preparedness in a context under continuous threat

ABSTRACT

In this paper, we examine how entrepreneurs living in communities under continuous threat prepare themselves to continue with their enterprising activities or engage in new ones after the expected crisis occurs. Most of the crisis literature on disasters and entrepreneurship focuses on aftermath responses, but the antecedents of such entrepreneurial behaviour and its connection to past and future crises remains largely unexplored. Based on a two-stage exploratory study pre and post the Calbuco Volcano eruptions in 2015 and 2016 in Chile, we introduce the notion of entrepreneurial preparedness in a context of continuous threat and elaborate on its four central attributes: anchored reflectiveness, situated experience, breaking through, and reaching out. Subsequently, our work develops a refined understanding of pre and post-disaster entrepreneurship and offers a novel base for theorizing on the relationship between entrepreneurial preparedness in contexts of continuous threat.     

Price promotions as a threat to brands

Manufacturers frequently resist heavy discounting of their products by retailers. Since low prices should increase demand and manufacturers could simply refuse to fund deep price promotions, such resistance is puzzling at first sight. We develop a model in which price promotions cause shoppers to evaluate the relative importance of quality and price against a market-wide reference point. With deep discounting, consumers perceive quality differences as less pronounced, eroding brand value and the bargaining position of brand manufacturers. This reduces their profits and may even lead to a delisting of their products. By linking price promotions to increased one-stop shopping and more intense retail competition, our theory also offers an explanation for the rise of store brands.     

Investment timing decisions under threat of potential competition: Why firm size matters

We study the value of the option to wait when other firms are looking at similar opportunities and may enter while one firm is waiting for uncertainty resolution. There are two important results. First the value of an investment project is affected by a firm’s assets-in-place, giving some firms a comparative advantage in competitive situations. Second, when two firms with different sized assets-in-place are looking at similar investment decisions, in the unique sub-game perfect equilibrium, the smaller firm invests earlier and also exits before a competing firm with larger assets-in-place. This makes an otherwise identical investment more valuable for the smaller firm. The larger firm optimally foregoes first-mover advantage because of higher expected exit costs.     

Franchise and the transport market: a new threat from Brussels

Contrary to the general liberalisation of transport policy that has followed in the European Union for some years now, a proposal is circulating in the Council and Parliament that would reverse all the gains that have been achieved from deregulation of bus and train services. It would return effective decisions to'competent authorities'and it would drive out competent managers as they lost the freedom to manage.     

Staring at the Abyss: a neurocognitive grounded agent-based model of collective-risk social dilemma under the threat of environmental disaster

Increasingly visible climate change consequences challenge carbon-based economies worldwide. While expert knowledge on climate change percolates through political initiatives and public awareness, its translation into large-scale policy actions appears limited. Climate change consequences unequally target regions, countries and social classes, a vital issue for social cooperation. When facing an imminent ecological collapse, in which conditions can self-interested agents gain environmental awareness and settle on a sustainable path of actions when their knowledge of the imminent collapse is bounded? This cooperation emerges from the interaction between individuals and the interaction of various cognitive processes within individuals. This article develops an agent-based model for this emergence of cooperation enriched with the Agent Zero neurocognitive grounded cognitive architecture. We investigate when agents endowed with deliberative, affective and social modules can settle on actions that safeguard their environment through numerical simulations. Our results show that cooperation on sustainable actions is the strongest when the system is at the edge of collapse. Policy measures that increase the environment’s resilience become internalized by the agents and undermine awareness of the ecological catastrophe. Depending on the cognitive channels activated, agent behaviors and reactions to specific interventions significantly vary. Our analysis suggests that taking different cognitive channels, deliberative, affective, social, and others into account, significantly impact results. The complexity of agent cognition deserves more attention to assess parameter sensitivity in social simulation models.

     

The behaviour of betting and currency markets on the night of the EU referendum

We study the behaviours of the Betfair betting market and the sterling/dollar exchange rate (futures price) during 24 June 2016, the night of the EU referendum. We investigate how the two markets responded to the announcement of the voting results by employing a Bayesian updating methodology to update prior opinion about the likelihood of the final outcome of the vote. We then relate the voting model to the real-time evolution of the market-determined prices as the results were announced. We find that, although both markets appear to be inefficient in absorbing the new information contained in the vote outcomes, the betting market seems less inefficient than the FX market. The different rates of convergence to the fundamental value between the two markets lead to highly profitable arbitrage opportunities.     

Voluntary internalisations facing the threat of a pollution tax

This paper investigates how the threat of a pollution tax fosters voluntary arrangements under private information and how such arrangements (of the take-it-or-leave-it type) will look like. The objective is (i), to address a topical and policy relevant problem, and (ii), to highlight that the optimal contracts exhibit substantial variations, degrees of complexity and uncommon features. If the pollutee offers an arrangement (and this is the more likely and also more interesting case) the spectrum of solutions covers six different cases: 'no distortion at the top', 'no distortion at the bottom', 'no distortion in the interior' and a boundary solution (a pseudo contract of duplicating the tax outcome) applicable either in all instances of the agent's benefit or coupled with one of the conventional mechanisms. If the polluter offers a contract, the optimal incentive scheme is countervailing with the consequence that the signs of the payments are reversed, that the property of no distortion holds at both ends and that the polluter's best strategy is to duplicate the tax outcome if the actual damage is around the expected value. The government's threat encourages contracting and improves the allocation beyond what an actual intervention could achieve. This provides a potential role for governments in an otherwise Coasean framework. Received: 28 March 2003, Accepted: 10 October 2005 JEL Classification: D62, D82 Both authors acknowledge (exceptionally) helpful and detailed comments from an anonymous referee and suggestions from an associate editor of the journal.     

Negotiation statements with promise and threat

Review of Economic Design - A negotiator, in order to achieve her goal, must induce an agent to cooperate. The agent faces costs or risks for cooperating. I develop a game-theoretic model where the...     

Conflict analysis and compromise strategies in integrated spatial systems

This paper aims at showing the potential of multiple objective analysis for analyzing conflicts in a spatial-economic-environmental system. After a brief introduction to interactive approaches to multiple objective decision models, a conceptual framework for an interregional system will be designed, while next an operational application will be given. Various empirical results of an interregional model for the Netherlands will be presented.     

Periodically expanding discounted debt: a threat to fiscal policy sustainability?

This paper models the behaviour of discounted US debt using a Markov‐switching time series model. The significance of modelling fiscal policy within this framework derives from the implications it has for long‐term sustainability. The two‐regime framework used in this paper identifies periods where the present value of US Federal debt is expanding versus periods when it is collapsing. Using an updated data series from Hamilton and Flavin ( 1986 ), a test is conducted to establish if the expanding periods pose a threat to the long‐run sustainability of fiscal policy. For the USA, it is found that they do not. Copyright © 2005 John Wiley & Sons, Ltd.     

Small business responsibility in developing countries: a threat or an opportunity?

Many developing country small and medium sized enterprises (SMEs) that are exporters see themselves facing a dilemma. They do not know how to respond to the rising social and environmental requirements of global buyers and supply chains and fear that were they to do so they would lose their competitive edge. However, they are aware that if they do not meet these requirements, they will not be able to access new foreign markets and may lose the contracts they already have. To investigate whether practical methods exist for resolving this dilemma, the United Nations Industrial Development Organization (UNIDO) carried out a one year project with 22 SMEs in four Asian countries. The results suggest that well targeted, enterprise‐specific efforts to meet corporate social responsibility (CSR) requirements can make a positive contribution to both short‐term profitability and longer‐term competitiveness. The ‘business case’ for CSR appears strongest in the environmental area, but measures in that area can act as a ‘starter motor’ for tackling more systemic ‘social’ problems. Furthermore, tackling social issues at the workplace can feed back positively to improve the sustainability of the environmental improvement measures. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.     

报复性反倾销及中国报复性威胁缺位的探讨

中国已成为全球被反倾销起诉次数最多的国家之一,严重制约了我国某些产业对外出口的健康发展,报复性反倾销对减少被反倾销起诉具有积极作用。基于全球反倾销数据,对世界主要贸易国之间的反倾销行为进行对比分析,探讨报复性威胁机制在抑制反倾销肯定性裁决上的作用。结合中印贸易间的反倾销数据,对报复性威胁机制的缺位和对策进一步分析探讨。     

Estimation of multiple poisson means: A compromise between maximum likelihood and empirical bayes estimators

For estimatingp(⩾ 2) independent Poisson means, the paper considers a compromise between maximum likelihood and empirical Bayes estimators. Such compromise estimators enjoy both good componentwise as well as ensemble properties. Research supported by the NSF Grant Number MCS-8218091.     

Reduced opportunities for regional renewal: The role of rigid threat responses among a region's established firms

This article illustrates how opportunities for regional renewal in a peripheral region may be reduced by rigid threat responses undertaken by established firms operating within traditional regional industry. In an inductive case study of new biorefinery industry initiatives in a region where traditional pulp-and-paper and forestry industry was in decline, we used primary and secondary data to outline how a set of new industry players who created innovative ways of using existing regional infrastructures and resources sparked rigid threat responses among established firms from the struggling traditional industry. Established industry firms framed new industry initiatives as threats, and responded by (1) reducing new industry actors’ possibilities for new business development, (2) engaging in entrenched resistance, (3) creating collaborative illusions and (4) undermining the fundamentals of the new industry. Consequently, this study contributes to existing literature by proposing the potential of applying the threat-rigidity thesis on a regional level. This is achieved by illustrating that conflicting behaviours between new and established regional industry actors constrain opportunities for regional renewal in a peripheral region. As such, relevant directions for future research and policy implications are outlined.     

Duration of UI periods and the perceived threat effect from labour market programmes

In this paper, we study whether the prospect of compulsory programme participation motivates individuals to leave the unemployment insurance (UI) system prior to participation. In some systems, individuals may experience very different risks of enrolment even when they face identical formal rules. If individuals learn that programme enrolment does not deterministically follow regulations, estimated effects based solely on institutional regulations may be downward biased. This means that the true effect of potential enrolment may be underestimated. We analyse data from the Danish labour market which includes information on a series of reforms that have enforced programme participation in return for unemployment benefit entitlement. First, we find that unemployed individuals do indeed have different risk of compulsory enrolment even when regulations indicate that the risk should be identical. Second, we find that individuals do react strongly and significantly to the prospect of programme enrolment. However, since individuals experience different risks of programme enrolment, the resulting response observed in individuals' hazard out of unemployment is also different as the unemployment spell progresses.     

Implicit human resource management theory: a potential threat to the internal validity of human resource practice measures

Since the publication of Huselid's (1995) paper examining the relationship between HR practices and firm performance, there has been an explosion of published papers examining the empirical relationship between HR practices and various measures of firm performance. This study examines the possibility that informants typically providing data about organizational HR practices may be biased by an implicit theory of human resource management. Our findings suggest the responses from subjects typically providing data about HR practices may be biased in their reporting by the performance of the organization. The generalizability of these results is considered and implications for future studies of the HR-firm performance relationship reviewed.     

Privatisation and vertical integration under a mixed duopoly

This paper analyses the privatisation of public firms when private firms may be vertically integrated with their suppliers. We consider a mixed duopoly with a vertically integrated public firm. The private firm bargains the price of the input with its supplier if they are not vertically integrated. We find that for a given bargaining power of the private firm, it vertically integrates with its supplier if goods are weak substitutes. We also find that there is less vertical integration in the mixed duopoly than in the private duopoly. Finally, in general, the public firm is privatised when goods are close substitutes and the bargaining power of the private firm is low enough.     

Workplace bargaining in hospitals and schools: threat or opportunity for the unions?

Government policy has aimed to encourage the development of workplace bargaining in both the education and health services. This article traces those developments and looks at trade union opposition to the shift from national to workplace bargaining     

Optimal restructuring under a political constraint

This paper considers the generalised second-best analytics of optimal restructuring under a political constraint, building on the modelling approach in Dehejia (1997, CEPR Discussion Paper No. 1552, Centre for Economic Policy Research, London, January 1997). It is shown that the second-best optimum entails administering the terms-of-trade shock fully at the initiation of the reform, just as in shock therapy, but that this must be supplemented with interventions in domestic factor markets. The effects of these interventions are to speed up the exit of the politically affected factor, labour, and to retard the exit of the other factor, capital, both of which serve to prop-up the wages of workers in the declining sector and hence address the political constraint. The results are in the spirit of the neoclassical theory of distortions and welfare: the optimal intervention targets the affected margin directly, in consonance with the ‘targeting’ principle of Bhagwati–Ramaswami–Johnson.