Fairness, errors and the power of competition

In this paper, we investigate the effects of competition on bargained outcomes. We show that the neglect of either fairness concerns or decision errors will prevent a satisfactory understanding of how competition affects bargaining. We conducted experiments which demonstrate that introducing a small amount of competition to a bilateral ultimatum game – by adding just one competitor – induces large behavioral changes among responders and proposers, causing large changes in accepted offers. Models that assume that all people are self-interested and fully rational do not adequately explain these changes. We show that a model which combines heterogeneous fairness concerns with decision errors correctly predicts the comparative static effects of changes in competition. Moreover, the combined model is remarkably good at predicting the entire distribution of offers in many different competitive situations.     

The power and limits of modularity: A replication and reconciliation

Research Summary: We ask two questions: First, what are the underlying mechanisms that explain the power of modularity? Second, is the power of modularity robust in nonmodular problems? We replicate and then reconcile the key results in two prior models on modularity: E&L and S‐search. Our results yield several important insights. First, a significant portion of the advantage enjoyed by S‐search is attributed to multi‐bit mutation. Second, organization‐evaluation needs to be used in combination with multi‐bit mutation. Third, when the underlying problem structure becomes nonmodular, S‐search outperforms E&L search, even though the advantage is reduced. More generally, organizational designers need to pay close attention to how different elements of modular search interact, and avoid making incremental adjustments. Managerial Summary: Modularity in product or organizational design is an approach that divides a system into smaller modules and attempts to augment the system level performance by experimenting with new modules. Because of its potential benefits such as parallel problem solving, adaptability in turbulent environment, or high speed in experimentation, both scholars and practitioners subscribed to the “power of modularity” thesis. Despite its popularity, there are significant number of cases where the superiority of modular design does not hold. We compare and contrast two representative prior studies that had different views on modeling organizational evolution under a modular design principle. By doing so, we are able to uncover what contributes to the superiority of modular design. Our results suggest that, when conducting experimentation under a modular design, it is important to (a) experiment multiple decision components simultaneously within a single module; and (b) allow evaluation of the changes to be made by the module‐level manager not by the organization‐level manager. When the manager does not know whether the modularity in organizational design fits with the modularity in the task, it is advised to do multiple experimentation in a single module at a time while allowing the organization‐level manager to evaluate the changes.     

Shadow rates as a measure of the monetary policy stance: Some international evidence

This paper examines the usefulness of shadow rates to measure the monetary policy stance by comparing them to the official policy rates and those implied by three types of Taylor rules in both inflation-targeting countries (the UK, Canada, Australia and New Zealand) and others that have only targeted inflation at times (the United States, Japan, the Euro Area and Switzerland) over the period from the early 1990s to December 2021. Shadow rates estimated from a dynamic factor model are shown to suggest a much looser policy stance than either the official policy rates or those implied by the Taylor rules, and generally to provide a more accurate picture of the monetary policy stance during both ZLB and non-ZLB periods, since they reflect the full range of unconventional policy measures used by central banks. Furthermore, generalised impulse response analysis based on three alternative vector autoregression (VAR) models indicates that monetary shocks based on the shadow rates are more informative than those related to the official policy rates or to two- and three-factor shadow rates, especially during the Global Financial Crisis and the recent COVID-19 pandemic, when unconventional measures have been adopted. Finally, unconventional policy shocks seem to have less persistent effects on the economy in countries, which have adopted an inflation-targeting regime.     

The influence of follower cultural orientation on attitudinal responses towards transformational leadership: evidence from the Chinese hospitality industry

In addition to extending the empirical investigation of the relationship between transformational leadership and follower affective commitment to the Chinese hospitality industry, this study makes a theoretical contribution by investigating the influence of individually held cultural values on this relationship. Building on previous research which has examined whether collectivism moderates the transformational leadership/affective commitment relationship, this study investigates the moderating effects of two additional cultural value orientations, namely power distance and uncertainty avoidance. Hierarchical regression analysis was utilized to analyse survey data from 398 employees of four Chinese hotels in Zhejiang Province. In addition to finding a positive relationship between transformational leadership and affective commitment, data analysis revealed that followers low in power distance exhibited higher levels of affective commitment when working under a transformational leader than those high in power distance. In addition, followers high in uncertainty avoidance and collectivism exhibited greater commitment when working under a transformational leader than those low in uncertainty avoidance and collectivism. These findings clearly indicate the importance of within-country cultural differences to the effectiveness of leaders in the workplace.     

Insights from images posted on social media: Examining the motivations of volunteer tourists

Extensive research has been conducted on the motivations of volunteer tourists; however, the scope has not included how motivation is expressed through the posting of images on social media. This study examines the relationship between volunteer tourists’ motivations and social media use through the identification of picture publishing behavior based on motivations. An online survey yielding 260 complete responses is used and statistical tests investigate the relationship between demographic factors, motivations and social sharing of photos. The results show that demographics have little impact; however, there is a relationship between motivation and photo sharing and between motivation and volume of photos.     

Does strategic involvement of mental health service users and carers in the planning,design and commissioning of mental health services lead to better outcomes?

There is an assumption, explicit in the current government policy, that involvement of mental health service users and carers in the planning, design and commissioning of mental health services will lead to better outcomes. The aim of this study was to examine evidence from board‐level participation of service users and carers that might support this assumption. A thematic analysis of documents generated by a strategic Lancashire Mental Health and Social Care Partnership during 2007 was undertaken. Themes for the analysis were generated from priorities identified from a postal survey of mental health services users from across Lancashire. The findings indicate that whilst service user and carer involvement is a high priority, the Lancashire Partnership spent most of its time discussing process and actions. Where service user involvement resulted in better outcomes, these improved outcomes were limited to the individual service users involved, rather than better outcomes for all service users. Whilst the membership of mental health service users and carers on the Lancashire Partnership Board presents a visible commitment from senior officers and may confer greater legitimacy to the decisions made by the Lancashire Partnership, service users and carers do not appear to play the desired instrumental role. Rather, their presence may be largely symbolic. This sends out the message across the health and social care system that partnership with service users and carers and their empowerment is important and has the potential to evolve further.     

Formale Überqualifikation unter ost- und westdeutschen Beschäftigten

In the context of ongoing demographic and economic change, the full exploitation of resources in terms of the productive use of acquired qualifications is a vital challenge. Overeducation is adverse to this aim. It occurs if individuals attained a higher level of education than is required in their current jobs. Relying on SOEP data, Boll and Leppin investigate the prevalence of overeducation in East and West Germany from 1992 to 2011. Their results indicate that the magnitude of overeducation heavily depends on the measurement method employed as well as on region, gender and education. Earnings analyses reveal that people who are overeducated according to either their self-assessment or to the realized matches criteria are most severely harmed. The authors suggest that selection plays a reasonable role and conclude that labour market imperfections and shortcomings of the educational system have to be addressed by policy makers.     

‘Only as good as your last gig?’: an exploratory case study of reputational risk management amongst self-employed musicians

Reputations can take years to build and moments to lose, with significant impacts on the longer term viability of an organisation. There has been a significant increase in literature on reputation risk and its management in recent times, although this has essentially focused on larger corporations. At the other end of the scale, in micro-enterprises, there appears to be very little coverage. To start to address this gap, this study provides insights into perceptions of reputational risk (RR) and reputational risk management (RRM) practice in the music industry. It explores how RR is understood in an unconventional, non-corporate context using a case study of 11 self-employed musicians operating in the South of England, UK. Respondents identified ‘competition’ as being the key risk that they faced, along with insufficient funding, unregulated contracts and protecting intellectual property rights. They did not though, at first, view their reputation in terms of risk. There was no consensus on the definitions of reputation or risk, yet there was awareness that two components determined reputation: musical ability and personal qualities. Despite appearing to have a lack of knowledge and understanding of RRM, the musicians were able to identify strategies for managing reputation, such as: behavioural adaptations, working with agents, choice of venues, use of technology, working collaboratively (with links to social identity) and being constantly reliable. They were also able to identify their stakeholders and the factors influencing their reputation, but this information was not widely used in a strategic way to routinely monitor or manage reputation. An identified ‘barrier’ to RRM was the lack of understanding of this complex issue. Having explored perceptions of reputation and RRM in micro-enterprises, this work forms a platform upon which the next stage of actually (re)designing processes and systems specifically for managing RRM in Small- and Medium-sized Enterprises can be built.