Asset prices and business cycles under market incompleteness

In this paper, we study the quantitative implications of a real business cycle model where the firm is the capital owner, households are heterogeneous, and markets are incomplete due to restricted asset trade. Since, under these assumptions, the usual firm objective is no longer well defined, several non-standard objectives are incorporated into the model. These include variants of market value maximization and a utility function for the firm. We find that the presence of market incompleteness alters little the behavior of asset returns. On the other hand, the behavior of the macroeconomic aggregates is quite sensitive to the firm objective, which affects the capital accumulation path. In contrast to conventional findings, capital is not necessarily higher when markets are incomplete. In addition, the different capital accumulation effects imply that shareholders with different asset wealth might prefer different firm objectives.     

I thought it was over,but now it is back: customer reactions to <Emphasis Type="Italic">ex post</Emphasis> time extensions of sales promotions

In many industries, it is common practice to extend sales promotions ex post. That is, firms belatedly extend the initial deadline of a promotion shortly before or directly after the previously announced deadline, with the expectation of increased sales. Four experimental studies indicate both positive and negative effects of these ex post extensions. First, customers perceive an ex post extended promotional offer as less attractive, such that their repurchase intentions diminish. This negative effect arises consistently across different boundary conditions, such as different customer and product types. Second, the positive effect of ex post extensions stems from the possibility that the consumer can still use the promotional offer, so it emerges only for potential customers and existing customers of frequently bought products. Companies can mitigate the dark side of ex post extensions proactively, by designing the extensions to last for only a short time or offering an explanation for the extension that highlights the popularity of the initial promotion.     

Having a creative day: Understanding entrepreneurs' daily idea generation through a recovery lens

Prior research has shown that trait creativity is important for becoming an entrepreneur and successful in business. We explore a new perspective by investigating how recovery from work stress influences entrepreneurs' daily idea generation, a key aspect of creativity. Physiological and mental recovery enables the cognitive processes of creative problem-solving. Moreover, differences in mental recovery processes help to explain age-related changes in entrepreneurs' creativity. Multilevel analyses based on 415 daily data from 62 entrepreneurs support our predictions. Our study introduces a new “state” perspective to understanding entrepreneurs' creativity, and highlights the critical role of recovery processes for idea generation.     

Does willingness to pay increase with the number and strictness of sustainability labels?

Labels signaling sustainable product attributes are gaining importance, although uncertainty concerning the environmental, micro‐ and macroeconomic benefits of such labels persist. One of the questions still incompletely answered is whether Willingness To Pay (WTP) varies with a gradually increasing number of labels on a food product. In order to answer this question, we conducted a laboratory experiment with 191 student respondents, testing consumer valuations of different labeling strategies. Using the Becker‐DeGroot‐Marschak mechanism, WTP for 15 food products was measured. The products were endowed with up to six different sustainability labels, such that each grocery item was available in eight product versions. For perishable, nonperishable, and plant‐based products, the results indicate that participants are prone to allocating WTP‐premiums to labeled products, more than to unlabeled products. For animal products, however, labels do not influence WTP significantly. Furthermore, the premiums do not vary with an increasing number of labels, irrespective of whether the labels signal substitute or complementary sustainability information. The results are not entirely in line with normative notions of magnitude variation, but rather with the behavioral economic concept of embedding effects.     

Exploring the capability of evaluating technical solutions: a collaborative study into the primary technology classroom

Within the field of technology education, evaluating technical solutions is considered as an important topic. Research indicates that pupils have difficulties in evaluating technical solutions in terms of fitness for purpose, i.e. how effective a technical solution supports its intended function. By using the learning study, which is an iterative and collaborative research approach, the study explores the capability to evaluate technical solutions in terms of fitness for purpose, what it takes to know it and how to best enhance its learning in the primary technology classroom. Audio and video recorded interviews, teachers’ meetings and lessons are the base data for the study. A contribution of the study is the understanding of this specific knowing, and what is critical for learning and thus to an improvement of technology teaching practice.     

Does having women managers lead to increased gender equality practices in corporate social responsibility?

There is increasing interest in determining what impact having women in management positions may have on corporate social responsibility (CSR) initiatives. Various authors suggest that gender equality practices should be factored into the broader framework of CSR. This paper examines how the presence of women on corporate boards, in top and middle management and as heads of CSR departments, influences gender equality practices in the field of CSR. Using information collected from companies that have signed up to Women's Empowerment Principles in Spain, we show that the presence of women in the aforesaid posts has a positive impact on CSR activities with gender equality objectives. We thus supplement the justice, business and moral arguments with further arguments in support of the incorporation of women into not only corporate boards but all management positions. Finally, we provide a view of how gender equality can be included in the broader framework of CSR.     

Effects of Sponsorship Disclosure Timing on the Processing of Sponsored Content: A Study on the Effectiveness of European Disclosure Regulations

This study investigates whether the timing of sponsorship disclosure affects viewers’ processing of sponsored content, and whether a disclosure influences the persuasive effect of the sponsored content. A model is proposed in which sponsorship disclosure enhances the recognition of sponsored television content as advertising, which leads to critical processing of the sponsored content. Ultimately, this negatively affects the attitude toward the brand in the sponsored content. This model was supported, but only when the disclosure was displayed prior to or concurrent with the sponsored content. These effects were not found for a sponsorship disclosure shown at the end of the program after the sponsored content. Theoretically, the findings emphasize the importance of disclosure timing. A disclosure displayed prior to or concurrent with the sponsored content, primes the sponsored content and provides sufficient processing time, so viewers recognize the content as advertising and can process it critically. In addition, the findings show that persuasion knowledge and critical processing are important underlying mechanisms for the effect of sponsorship disclosure on brand attitude. Regarding the practical implications for legislators and advertisers, this research demonstrates that sponsorship disclosure can make viewers aware of the sponsored content in television programs. Furthermore, this changes the processing of sponsored content and can also ultimately lead to resistance against persuasion.     

How to beat the average

Empirical evidence has shown that people systematically overrate own performance relatively to others. This paper investigates production with identical workers where each one believes to be more productive than other workers. In a simple efficiency wage model, we ask how these seemingly incompatible beliefs can be made compatible with one another. We suggest that to compensate for the subjectively perceived productivity gap, each worker chooses an effort level lower than that attributed to others. The latter is estimated as the lowest effort that allows to pass the firm's monitoring test. Since rational agents will not maintain expectations which turn out to be systematically wrong, we introduce a "consistency requirement for false beliefs". Accordingly, predictions based on the "wrong" model must agree with the observations of the "true" model. We show that even with consistency, less effort is supplied than in the full information setting. Hence, the wage-effort relationship gets less efficient from the firm's viewpoint. At a first sight, at the firm-level workers gain from holding false beliefs, while profits unambigously fall. At the aggregate market outcome, however, the firms' labor demand declines, total output falls, and the rate of unemployment rises, decreasing workers utility again.     

The Incidence of Protection on Exports: The Case of Spain, 1870–1913

The aim of this article is to analyze the effects of tariffs on nonprotected sectors through an application of the model of tax incidence of protection to a country and period defined by Heckscher–Ohlin-type specialization and no relevant support to protect exporters, namely, Spain between 1870 and 1913. The consideration of such a case allows us to perform different specifications of the model, based on relative internal prices, through ADL methods that show a negative incidence of protection for exporters, softer in the short term by the influence of income and international prices, and stable through changes in trade policy.