The measurement of turnaround management strategies in local authorities

The use of turnaround management strategies (TMS) in the public context is beginning to be researched, however adjusted measurement tools are still needed. This article describes the construction and validation of a new scale for measuring TMS in local authorities.     

Local Political Corruption: Potential structural malfunctions at the central–local,local–local and intra-local levels

Abstract

Despite growing preoccupation on the part of both the public and researchers with the concept of political corruption and the ‘corruption eruption’ phenomenon, research studies addressing corruption in local government are few and far between. This exploratory research offers a theoretical conceptualization of institutionalized corruption in local government, and identifies structural factors that lead to such corruption. Further, this study empirically assesses institutional corruption at the local level and its correlation to attitudes and characteristics of local authorities and their populations, based on a survey of 1,709 residents of 156 local authorities in Israel and data on the local authorities from a separate database. This article proposes a model according to which local corruption arises from structural factors at three levels: the central–local level (relations between local authorities and the central government); the local–local level (competition between local authorities) and the intra-local level (factors relating to the performance of local councils and local democracy). Our analyses reveal correlations among characteristics of the local authority and community, residents' perceptions of local performance and perceptions of local corruption. Implications of the findings in light of strategies conventionally employed against corruption in local government are discussed.     

Trade Liberalization,Firm Selection,and Variety Growth

Recent empirical findings indicate that when trade is liberalized both firm selection takes place and product variety increases. Each of these two stylized facts has its own seminal theory. But how can they arise together? This paper presents a model of heterogeneous, multi‐variety firms that provides an intuitive explanation. When trade is liberalized efficient foreign exporters enter and push out the least efficient domestic firms. Fewer firms remain in total. But exporters endogenously offer more variety than domestic firms. The entry of variety‐rich foreign firms unambiguously dominates the decrease in the number of firms. Thus, total variety increases.     

Advancing Ethics in Public Organizations: The Impact of an Ethics Program on Employees’ Perceptions and Behaviors in a Regional Council

Ethics in public administration has been a subject of growing interest for both researchers and practitioners interested in the future of governance. This study examined the relationship between ethics and performance in local governance. We tested the effects over time of an ethics program on employees’ perceptions (awareness of the code of ethics, ethical leadership, inclusion of employees in ethical decision making [EDM], ethical climate [EC], organizational commitment, and quality of work life [QWL]) and behavior (organizational citizenship behavior) in one Israeli regional council. We conducted a longitudinal study of 108 employees, using data from a two-phase survey (before implementation of the ethics program and a year after) and objective assessments of employees’ behavior through managers’ evaluations. The main findings show that the ethics program was very effective, resulting in greater awareness of the code of ethics, increased inclusion of employees in EDM, and an improved EC. Furthermore, ethical leadership was positively related to employees’ awareness of the code of ethics, increased inclusion of employees in EDM, an improvement in the EC, greater organizational commitment, and higher QWL. Implications and suggestions for future studies are discussed.     

Borders of Peace in Policy and Practice: National and Local Perspectives of Israel-Jordan Border Management

Border-management policies are designed to balance national interests of border control with the costs of monitored cross-border interaction. These policies, formulated by national authorities, are often based on constructed definitions and interests of national security rather than wider understandings of the components of human security. This is especially evident in post-conflict borders where local initiatives of economic, social and environmental cross-border interaction are posed to contribute to regional stability and security. This article analyzes civilian cross-border cooperation in the southern section of the Israel-Jordan border region, distinguishing between local and national perspectives regarding border management. Focusing mainly on Israel's policies the article demonstrates how despite the vision of good neighbourly relations and their potential contribution towards regional prosperity and stability, local cross-border initiatives have been inhibited in the name of national security. The case study demonstrates the mechanisms and ramifications of exclusive securitisation policies of post-conflict border management.     

Price control and advertising in franchising chains

This study investigates how franchising chains use advertising to enhance coordination and improve their control over prices set at franchised outlets. We argue that chains use price advertising to inform customers about their desired prices, thereby influencing franchisees to adopt the advertised prices although they are not contractually required to do so. We test our hypotheses using rich outlet‐level price data collected before and after a U.S. nationwide advertising campaign by McDonald's. Our findings indicate that advertising is an effective mechanism that franchising chains use to improve their control over franchisees, enhance uniformity, and reduce franchisee free‐riding. Copyright © 2013 John Wiley & Sons, Ltd.     

Rationalizability in continuous games

Define a continuous game to be one in which every player's strategy set is a Polish space, and the payoff function of each player is bounded and continuous. We prove that in this class of games the process of sequentially eliminating “never-best-reply” strategies terminates before or at the first uncountable ordinal, and this bound is tight. Also, we examine the connection between this process and common belief of rationality in the universal type space of Mertens and Zamir (1985).     

Vertical Foreclosure Using Exclusivity Clauses: Evidence from Shopping Malls

Exclusive contracts are one of the most controversial topics in the economic analysis of antitrust. Yet, very few empirical papers analyze the determinants and the consequences of exclusive contracts. In this paper, I study exclusive contracts between hamburger restaurants and Israeli shopping malls, in which mall owners commit to prohibiting additional hamburger restaurants from entering their malls. I investigate the determinants of these exclusive contracts and examine how such contracts affect the number of hamburger restaurants and their sales. I show that exclusive contracts are less likely to be adopted in larger malls, in malls that face more competition from other malls, and in malls that opened before 1993, when McDonald's and Burger King entered the Israeli market. I then use the mall's opening year—before or after 1993—as an instrumental variable to estimate a negative effect of exclusive contracts on the number of restaurants and on total mall hamburger sales. My findings are generally consistent with anti‐competitive vertical foreclosure models.     

Credit rationing when banks are funding constrained

Credit crunches, such as in the recent financial crisis, generally occur when banks are themselves funding constrained. We use this observation to repair the workhorse Stiglitz–Weiss model of credit rationing. Recent research has invalidated the distributional assumption on which that model is based. This paper shows that by adding the assumption that banks are capacity constrained, Stiglitz–Weiss rationing can occur again. It discusses how this finding can be related to the current policy debates on bank funding and credit provision.     

Optimal shill bidding in the VCG mechanism

This paper studies shill bidding in the Vickrey?CClarke?CGroves (VCG) mechanism applied to combinatorial auctions. Shill bidding is a strategy whereby a single decision-maker enters the auction under the guise of multiple identities (Yokoo et?al. Games Econ Behav, 46?pp. 174?C188, 2004). I formulate the problem of optimal shill bidding for a bidder who knows the aggregate bid of her opponents. A key to the analysis is a subproblem??the cost minimization problem (CMP)??which searches for the cheapest way to win a given package using shills. An analysis of the CMP leads to several fundamental results about shill bidding: (i) I provide an exact characterization of the aggregate bids b such that some bidder would have an incentive to shill bid against b in terms of a new property Submodularity at the Top; (ii) the problem of optimally sponsoring shills is equivalent to the winner determination problem (for single minded bidders)??the problem of finding an efficient allocation in a combinatorial auction; (iii) shill bidding can occur in equilibrium; and (iv) the problem of shill bidding has an inverse, namely the collusive problem that a coalition of bidders may have an incentive to merge (even after competition among coalition members has been suppressed). I show that only when valuations are additive can the incentives to shill and merge simultaneously disappear.