The gift of advice: communication in a bilateral gift exchange game

We augment a standard bilateral gift exchange game so employees can send messages at the same time as choosing an effort level. Employee effort (controlling for wages) is unaffected by allowing messages, but wages dramatically increase. Messages affect wages because employees give managers advice to set higher wages, usually explaining that this will result in higher effort. This advice prompts managers to try higher wages, helping them learn that raising wages increases their payoffs. In a follow-up experiment, we directly provide managers with additional information about the relationship between wages and effort. This too causes wages to increase, but to a lesser extent than allowing messages. Our results highlight the critical role of learning in generating gains from positive gift exchange.     

The role of personality traits in pension decisions: findings and policy recommendations

Many countries need to stimulate pension participation and contribution to ensure their citizens are prepared adequately for retirement. Identifying at-risk groups with tendencies of not joining pension plans will help governments target strategies to improve pension awareness and participation. This study investigates the role of personality traits in pension decision making using data from the UK Household Longitudinal Study. Our results demonstrate that Extraversion significantly correlates with non-participation in private pensions, including both employer run and personal pensions. Individuals who are high in Conscientiousness are more likely to participate and pay more into personal pensions. Openness to experience is negatively correlated with saving via personal pensions. Agreeableness and Extraversion correlate inversely with the amount contributed to personal plans. This paper discusses our findings in detail and offers policy implications which may help promote pension participation and ease the problem of old age poverty.     

The stability of big-five personality traits

We demonstrate that Big-Five personality traits are stable for working-age adults over a four-year period. Mean population changes are small and constant across age groups. Intra-individual changes are generally unrelated to adverse life events and are not economically meaningful.     

Communication,competition and social gift exchange in an auction for public good provision

Reverse auctions are an established policy instrument for allocating conservation contracts. While the auction mechanism has been the subject of a number of studies, less attention has been paid to the post-bidding contract phase. As contracts involving natural resource management are usually incomplete, trust becomes crucial for the effectiveness of the programme. We test the effect of communication between auctioneer and bidders on bidding behaviour and contract fulfilment using experimental economics. We combine a repeated reverse auction with an effort-level game and use a bilateral chatting tool as treatment variable. Without communication, auctioneers tended to select the lowest-priced bidders, who invested substantially less than the socially optimal level of effort when fulfilling their contract to provide the public good. Relational contracting proved important, with effort levels and profits tending to be higher when auctioneers and bidders entered into consecutive contract relationships. In the communication treatment there was no evidence of price competition, as auctioneers were more likely to accept high-priced bids. However, an overall higher price level did not lead to efficiency losses, since contractors realised higher effort levels in return, establishing a ‘social gift exchange’. Our results demonstrate the importance of trust-based relationships between the auctioneering institution and landholders.     

The role of hard-to-obtain information on ability for the school-to-work transition

When information about the abilities of job seekers is difficult to obtain, statistical discrimination by employers may be an efficient strategy in the hiring and wage-setting process. In this article, we use a unique, longitudinal survey that follows the PISA 2000 students in their early educational and work–life careers. We find that a deviance in the PISA test scores from what one would have predicted based on easy-to-obtain observable characteristics influences the probability of succeeding in the transition from compulsory schooling to a firm-based apprenticeship significantly but in a non-symmetric way. Only those who had a test result below their predicted result have significantly lower chances of getting an apprenticeship. We also find evidence that the importance of hard-to-obtain information on ability is further revealed in the course of the apprenticeship.     

Effect of cognitive ability on matching and rebate subsidies

This paper conducts laboratory experiments to investigate the effect of cognitive ability on individual charitable behavior under two theoretically equivalent subsidy schemes, matching and rebate subsidy schemes. Experimental results show that whether the subject has high or low cognitive ability, his/her private donation under matching subsidies is significantly higher than that under the theoretically equivalent rebate subsidies. However, an individual with higher cognitive ability is more likely to attain the theoretical equivalence.     

The role of social networks in determining migration and labour market outcomes

This paper empirically examines social network explanations for migration decisions in the context of German reunification. Using longitudinal data from the German Socio‐Economic Panel, we first show that the presence of a family in West Germany is an important predictor for the migration hazard rate of East Germans. We then explore whether pre‐migration networks have a discernible impact on the economic and social assimilation of East German immigrants in West Germany. We find that East German immigrants are more likely to be employed and to hold higher paying jobs when socially connected to the West prior to emigrating.     

The exchange rate mechanism's role in the european monetary system

The European Community was established with the intent of reaching full economic, monetary, and political union among its member countries. The three elements of the European Monetary System—the Exchange Rate Mechanism, the European Currency Unit, and the European Monetary Fund—were designed to work together to achieve monetary integration among the member states. German reunification, as a result of the collapse of the Berlin Wall, played an important role in the failure of the Exchange Rate Mechanism. Many steps will need to be taken in order for the European community to obtain full economic and monetary union.     

The role of tacit knowledge in connecting knowledge exchange and combination with innovation

Using the Resource-Based View, this paper aims to provide a better understanding of the effect of knowledge on innovation. With this general aim in mind, we relate knowledge’s nature (tacit vs. explicit) and process (e.g. knowledge exchange and combination) to innovation. Using a sample of 105 innovative firms, we find a positive linear effect of tacit knowledge on innovation and a curvilinear relationship between knowledge exchange and combination and innovation. We also find a moderating effect of tacit knowledge on the curvilinear relationship between knowledge exchange and combination and innovation. We speculate on our findings and connect them to previous theory.     

Surplus men and scarce women: The impact of mating competition on the desire for sons in China*

We conducted this research to explore the possible factors shaping son preference, with a view to understanding the persistently high male/female sex ratio. Using data from the Chinese General Social Survey (CGSS) and the Population Census of China, we find a significant impact of regional sex ratio on people's preferences for the sex of their future children. Specifically, the extent of son preference decreases with the increase in the male/female sex imbalance in the local area. We also find that sex imbalance has a positive impact on a wide range of outcomes that capture the pressure on males to enter marriage markets, such as regional housing prices, the number of houses owned, and family economic status. This result is consistent with the view that greater sex imbalance exerts larger pressure on men in the marriage market, leading to changes in son preference. Omitted variable bias is addressed by using climate changes in the month preceding the fertilization period as an instrument for sex ratio. Instrumental sex ratio negatively impacts son preference, offering strong support for our hypothesis.     

The impact of a study abroad programme on learning abilities and personality traits: evidence from a randomization

Personality traits are increasingly considered as a powerful predictor of socio-economic success as academic achievement. In this article, we exploit the random assignment of applicants to a programme in order to retrieve unbiased estimates of the impact of studying abroad on both cognitive and noncognitive abilities. Our findings suggest that secondary school students, especially those considered ‘more able’, benefited from a 1-month experience abroad, as it enhanced both personality traits and language proficiency.     

The determinants of cognitive and non-cognitive educational outcomes: empirical evidence in Spain using a Bayesian approach

This article aims to extend the literature about the role played by socio-economic and family background in educational outcomes by comparing the determinants of two different dimensions of educational output: academic achievement and non-cognitive traits. To do this, we explore the information provided by a self-report survey developed specifically for the purpose of this research. This will provide us with an innovative measure of non-cognitive performance based on particular personal traits, such as responsibility, effort, motivation and critical capacity, as well as a common measure of cognitive proficiency. We use a Bayesian approach to estimate the potential influence of multiple individual and family variables on both dimensions of educational output. From our results, we find that, despite some similarities, there are several important divergences with regard to some socio-economic variables that have been traditionally considered to be the most influential determinants of academic achievement which do not appear to have a significant impact on non-cognitive outcomes.     

The role of exchange rate in inflation targeting: the case of Turkey

ABSTRACT

The role of the exchange rates in emerging market economies that have adopted inflation targeting (IT) is a critical and contentious issue in the relevant literature. This article investigates whether an exchange rate-augmented Taylor rule describes the Central Bank of Republic of Turkey’s (CBRT) monetary policy. Covering the period from 2002:1 to 2017:8 it also explores possible nonlinearities in the reaction function of the CBRT by employing a Threshold Vector Autoregressive (TVAR) model. The linear estimation of the model highlighted the importance of the exchange rate in monetary policy under IT. The results of the nonlinear model indicate that the stance of monetary policy was asymmetric with respect to exchange rate movements during the conventional IT period. However, the asymmetric monetary policy stance disappeared in the aftermath of the Global Financial Crisis. Increasing considerations of financial stability undermined the asymmetric policy stance of the CBRT in the post-crisis period.     

The role of savings rate in exchange rate and trade imbalance nexus: Cross-countries evidence

Will a higher savings rate improve a country's trade imbalance? Using data for 76 countries for the period 1975–2010, we examine the relationship between trade balance, savings rate, and real exchange rate. To address the potential non-linear effects of the savings rate, we use the panel smooth transition regression (PSTR) model with instrumental variables. Our results indicate that countries with a savings rate above the threshold of 14.8% can improve their trade balance by increasing the savings rate or depreciating their currency. Even though the sample is divided into two groups on the basis of income level, the empirical results vary little, suggesting that our findings are robust to the data separation.     

The impact of personality traits on talents’ performance throughout development phases: empirical evidence from professional football

ABSTRACT

This paper addresses a critical gap in talent management research, i.e. the question of what determines high performance, by highlighting the importance of personality traits for the performance of talents who are trained within the strong situation of a pivotal talent pool – – the talent pool, of a German Bundesliga club. The findings illustrate the ubiquitous high level of certain personality traits among pivotal talents, their limited variance inter talent development phases as well as their significant impact on talent performance. As a complement to talents’ job-specific skill level, the personality facet of self-confidence is a consistent driver of overall performance, with resilience and job-specific creativity being essential in order to perform above peer-group level.