Uniqueness of stationary equilibria in a one-dimensional model of bargaining

We prove uniqueness of stationary equilibria in a one-dimensional model of bargaining with quadratic utilities, for an arbitrary common discount factor. For general concave utilities, we prove existence and uniqueness of a “minimal” stationary equilibrium and of a “maximal” stationary equilibrium. We provide an example of multiple stationary equilibria with concave (nonquadratic) utilities.     

The business cycle with nominal contracts

Summary In this paper we study the quantitative implications of nominal wage contracts for business cycle fluctuations. We address this issue using a model economy based on the neoclassical growth model supplemented by the assumption that cash is needed to purchase goods. We consider a variation of the standard recursive competitive equilibrium concept that is intended to capture the important features of wage contracting. We use this equilibrium construct to address three issues. First, we consider whether monetary shocks, propagated by nominal contracts, constitute a viable alternative to technology shocks as a source of aggregate fluctuations. Our results suggest that, while monetary shocks and nominal rigidities succeed in causing output volatility of the required magnitude, the resulting data have properties that are inconsistent with several key features of U.S. data. Second, we consider how the behavior of the economy varies with contract length. We find that the volatility induced by both monetary and technology shocks increases sharply with contract length. Finally we consider how much rigidity would be necessary to match the volatility of U.S. output. We find that only a very small amount of rigidity would be necessary to cause output volatility of the magnitude observed.We have received helpful comments from David Chapman, Paul Gomme, Jeremy Greenwood, Gary Hansen, Michael Keane, Tim Kehoe, Lee Ohanian, Edward Prescott, and Warren Weber. The usual disclaimer applies. This research is supported in part by NSF Grant SES-8921346 and the John M. Olin Foundation.     

韩国电信(KT)移动WiMAX(WiBro)服务介绍

移动WiMAX与WiBro之间的关系WiBro源自韩国。早在2004年7月韩国信息通讯部(MIC)正式公布移动WiMAX(WiBro)的服务要求之前,韩国电信技术协会(TTA)内部就开展了一项本地     

Performance deviations and acquisition premiums: The impact of CEO celebrity on managerial risk‐taking

Research summary: This article draws on identity control theory and a study of acquisition premiums to explore how CEO celebrity status and financial performance relative to aspirations affect firm risk behavior. The study finds that celebrity CEOs tend to pay smaller premiums for target firms, but these tendencies change when prior firm performance deviates from the industry average returns, thereby leading these CEOs to pay higher premiums. The study also finds that the premiums tend to be even larger when celebrity CEOs have more recently attained celebrity status. Taken together, these findings contribute to identity control theory and CEO celebrity literatures by suggesting that celebrity status is a double‐edged sword and that the internalization of celebrity status by CEOs strongly influences the decision‐making of CEOs. Managerial summary: The purpose of this article is to examine how CEO celebrity status and financial performance relative to aspirations affect the size of acquisition premiums. The study finds that celebrity CEOs tend to pay smaller premiums for target firms. However, when celebrity CEOs' prior firm performance is either better or worse than the industry average, these CEOs pay higher premiums. This situation is exacerbated when the CEO has only recently been crowned a celebrity. In effect, these CEOs feel great pressure to match the inflated performance expectations that come with celebrity status. These findings suggest that being a celebrity is a double‐edged sword. The implication here is that CEOs who have recently been crowned a celebrity should be aware of these pressures and cope accordingly. Copyright © 2015 John Wiley & Sons, Ltd.     

Developing Equity Release Markets: Risk Analysis for Reverse Mortgages and Home Reversions

Equity release products are sorely needed in an aging population with high levels of home ownership. There has been a growing literature analyzing risk components and capital adequacy of reverse mortgages in recent years. However, little research has been done on the risk analysis of other equity release products, such as home reversion contracts. This is partly due to the dominance of reverse mortgage products in equity release markets worldwide. In this article we compare cash flows and risk profiles from the provider's perspective for reverse mortgage and home reversion contracts. An at-home/in long-term care split termination model is employed to calculate termination rates, and a vector autoregressive (VAR) model is used to depict the joint dynamics of economic variables including interest rates, house prices, and rental yields. We derive stochastic discount factors from the no arbitrage condition and price the no negative equity guarantee in reverse mortgages and the lease for life agreement in the home reversion plan accordingly. We compare expected payoffs and assess riskiness of these two equity release products via commonly used risk measures: Value-at-Risk (VaR) and Conditional Value-at-Risk (CVaR).     

Effects of Network Embeddedness on the Relationship Between Environmental Volatility and Interfirm Contracts

Purpose: This study examines the effects of an embedded network on the contractual relationship between exchange parties under conditions reflecting varying levels of environmental volatility and investigates the role of an important network factor—the embedded network—in the contractual relationship between manufacturers and their suppliers.

Methodology: The empirical test was conducted with manufacturing companies in the context of manufacturer–supplier relationships. Construct measures were based on existing measures and previous research. Measurement reliability and validity were established using exploratory and confirmatory factor analysis and an overall measurement model was assessed with structural equation modeling using LISREL.

Findings: The results of a survey of manufacturers indicate that firms in an embedded network preferred “soft” contracts even when they face volatile environments, whereas those facing volatile environments in a less embedded network preferred “hard” contracts with explicitly specified written requirements. Network partners carefully evaluated embedded networks (a critical factor that has not received enough attention) before forming contractual relationships in a network perceiving interfirm relationships differently.

Originality: The study introduces network embeddedness to explain governance mechanisms in volatile environments and shows that the explicit recognition of embedded network may facilitate the development of contracts with specific provisions as the contractual relationship evolves.     

Negative externalities on property values resulting from water impairment: The case of the Pigeon River Watershed

The objective of this research was to determine whether willingness to bear the negative externality from water quality impairment differs between those who do and those who do not receive economic benefit from the impairment source. Differences were tested using a hedonic analysis of ambient water quality in two discrete housing markets in the Pigeon River Watershed, which have been polluted by the operation of a paper mill. The results suggest that North Carolina residents residing in subwatersheds with impaired portions of the Pigeon River, who experience economic benefit from the paper mill in addition to its harmful effects on water quality, do perceive the pollution as a negative externality. In contrast, the effects of both the degraded river and its contributing streams on property values are perceived as negative externalities by watershed residents in Tennessee who experience only harmful effects from the pollution. Differences in willingness to bear the water-impairment externality were not indicated by variables representing view of and proximity to impaired water bodies. The results suggest that the perception of water quality to which property owners implicitly apply value should be considered when establishing water-quality regulations.     

When does an employee not help coworkers? The effect of leader–member exchange on employee envy and organizational citizenship behavior

Using a sample of 233 front-line hotel employees, we examined leader–member exchange (LMX), envy, and organizational citizenship behavior (OCB). The results from path analysis support the research model that employees who have a relatively poor working relationship with their supervisor (i.e., low-quality LMX relationship) were more likely to show higher levels of envy than employees who have relatively closer working relationships with the same supervisor (i.e., high-quality LMX relationship). Ultimately, higher levels of envy decreased employee voluntary helping behavior (i.e., organizational citizenship behavior, OCB) toward coworkers. This finding suggests that employees perceiving a poor working relationship with their supervisor committed less voluntary helping behavior toward coworkers than their counterparts. Implications for managers and suggestions for future research are discussed.     

Employees intent to leave: A comparison of determinants of intent to leave versus intent to stay

The purpose of the study is to examine whether the predictors that decrease employee intention to leave will also increase employees’ intention to stay. Therefore, the objective of the study is twofold: (1) to examine the influence of perceived organizational support, perceived supervisors’ support, and organizational commitment regarding intent to leave and (2) to investigate the influence of the same variables on intent to stay. A total of 416 hospitality employees in the U.S. participated. The results suggest that perceived organizational support and organizational commitment decreased intent to leave while only perceived organizational support had a positive impact on intention to stay. Implications detail ways that hospitality organizations can focus on increasing their employees’ commitment through perceived organizational support as a critical component of turnover culture.     

Astroturfing Global Warming: It Isn’t Always Greener on the Other Side of the Fence

Astroturf organizations are fake grassroots organizations usually sponsored by large corporations to support any arguments or claims in their favor, or to challenge and deny those against them. They constitute the corporate version of grassroots social movements. Serious ethical and societal concerns underline this astroturfing practice, especially if corporations are successful in influencing public opinion by undertaking a social movement approach. This study is motivated by this particular issue and examines the effectiveness of astroturf organizations in the global warming context, wherein large corporate polluters have an incentive to set up astroturf organizations to undermine the importance of human activities in climate change. We conduct an experiment to determine whether astroturf organizations have an impact on the level of user certainty about the causes of global warming. Results show that people who used astroturf websites became more uncertain about the causes of global warming and humans’ role in the phenomenon than people who used grassroots websites. Astroturf organizations are hence successful in promoting business interests over environmental protection. In addition to the multiple business ethics issues it raises, astroturfing poses a significant threat to the legitimacy of the grassroots movement.