Free Trade versus Autarky under Asymmetric Cournot Oligopoly

The paper compares free trade with autarky in an asymmetric multi‐country world under Cournot competition with constant returns to scale and linear demand. We derive respective conditions under which free trade will hurt a country's consumers, benefit its firms, induce it to export, increase its output and raise its welfare. We show that these conditions are linked in a clear order, with one implying the next. We further demonstrate that free trade can reduce world total output and total consumer surplus as well as world welfare. Along the way, we correct several oversights in the literature.     

The evolution of morality and the end of economic man

1871 saw the publication of two major treatises in economics, with self-seeking economic man at their center. In the same year Darwin published The Descent of Man, which emphasized sympathy and cooperation as well as self-interest, and contained a powerful argument that morality has evolved in humans by natural selection. Essentially this stance is supported by modern research. This paper considers the nature of morality and how it has evolved. It reconciles Darwin’s notion that a developed morality requires language and deliberation (and is thus unique to humans), with his other view that moral feelings have a long-evolved and biologically-inherited basis. The social role of morality and its difference with altruism is illustrated by an agent-based simulation. The fact that humans combine both moral and selfish dispositions has major implications for the social sciences and obliges us to abandon the pre-eminent notion of selfish economic man. Economic policy must take account of our moral nature.     

Foreign Acquisitions,Domestic Multinationals,and R&D

Our aim in this paper is to evaluate the causal effect of foreign acquisition on research and development (R&D) intensity in targeted domestic firms. We are able to distinguish domestic multinational enterprises (MNEs) and non‐MNEs, which allows us to investigate the fear that the change in ownership of domestic MNEs to foreign MNEs leads to a reduction in R&D activity in the country. Overall, our results give no support to the fears that foreign acquisition of domestic firms leads to a relocation of R&D activity in Swedish MNEs. Rather, in this paper, we find robust evidence that foreign acquisitions lead to increasing R&D intensity in acquired domestic MNEs and non‐MNEs.     

OVERBIDDING AND HETEROGENEOUS BEHAVIOR IN CONTEST EXPERIMENTS: A COMMENT ON THE ENDOWMENT EFFECT

We revisit the meta-analysis of Sheremeta on overbidding in contest experiments and focus on the effect of endowment on overbidding. Sheremeta assumes, and finds evidence of, an increasing linear relationship between endowment and overbidding, Quantal Response Equilibrium (QRE) predicts an increasing concave relationship, while Baik and colleagues find an inverted U-shaped relationship in their analysis of a single experiment. We use the same data as in Sheremeta, but employ a different econometric model which leads to support for both QRE and the inverted U-shaped relationship. Following Baik and colleagues, we posit that the inverted-U relationship may be interpreted in terms of a wealth effect.     

Helping behavior in a virtual crisis situation: effects of safety awareness and crisis communication

Incident evaluations show that bystanders tend to help: they do not wait for professionals to arrive, but act as required by the situation at hand. In the present study, we investigated how safety awareness (induced before an accident happened) and providing a course of action by emergency services affect helping behavior after witnessing a virtual accident with two victims. The main task of the participants was to arrive at a job interview in time. Safety awareness was manipulated by the specific organization they went to: either promoting safe traffic or healthy living. The results show that all participants were inclined to help. Participants who were primed towards safe traffic more often called the emergency number, but talked to the victim less often. Participants who had received specific courses of action moved the victim less often. In all, the results clearly indicate the value of effective risk communication (before an event occurs) and crisis communication (after an event has occurred), as both types of information improve the quality of actual helping behavior at the scene.     

Rentenpaket: die Bundesregierung auf Irrwegen

In the summer of 2014 Germany will witness the most substantial expansion of pension expenditures since the 1950s. Yet, while this reform package was motivated mainly by the dismal prospect of rising old age poverty rates, it does little to alleviate this problem. On the contrary, its two central elements, an expansion of the pension claims of mothers whose children were born before 1992, and access to early retirement at age 63 for workers with a long insurance history, tend to benefit rather privileged groups of the insured. These measures endanger the sustainability of the German pension system and will necessitate future generations to work even longer than would have been the case otherwise.     

Residents’ perceptions of the 2014 Sochi Olympic Games

This study examines the perceptions of local residents prior to the 2014 Sochi Olympic and Paralympic Games. A survey conducted amongst residents, 5 months prior to the Games opening, reveals a lower level of support for the Games during the preparation period compared to other Olympic host cities. Socio-demographic data about the residents help explain the varying attitudes towards the Games that were identified. The conclusions suggest that Sochi residents’ perceptions have been largely influenced by their thoughts regarding potential economic and socio-cultural impacts, whether positive or negative. When these opinions are analysed further, three main considerations were found: (1) impacts on urban development and quality of residential life; (2) positive impacts on tourism and the destination’s economy and (3) negative results of hosting the Games. The study also finds, using structural equation modelling, that residents of Sochi, who could receive some benefit from the Games, were involved in the decision-making process or had more information about the upcoming Games, demonstrated more positive attitudes towards hosting the Olympics.