Evolutionary stability of altruism and envy in Tullock contests

This paper considers Tullock contests with altruistic and envious individuals as players. Altruism (envy) is beheld as another motivation for low (high) dissipation rates in contests. A pure population of altruists has higher payoffs than a purely envious population, but the altruist has a lower payoff if he is confronted with an envious individual. In an evolutionary approach in which the population share of the type with the higher material payoff rises, it can be shown that there is a possibility of either envy or altruism becoming extinct. Furthermore, we find an advantage of envy in such a manner that very altruistic individuals always die out, but very envious ones only do so under certain conditions. I am grateful to Alexander Haupt, two anonymous referees, and the editor for constructive comments on this paper.     

The suffering company: Consumer compassion towards companies exposed to negative events

When a company commits misconduct, it will usually suffer; for example, in the form of a short‐term decline in sales, a medium‐term loss of reputation, or a long‐term drop in its bottom line. But when a company is involved in a negative event for which it is fully responsible, for example, public customer agitations due to false expectations, some consumers might feel compassion for the company. In turn, they might aim to help the company overcome its period of suffering; for example, by making supportive recommendations. Drawing upon deservingness theory and previous findings on these issues, the authors propose a causal model suggesting antecedents of compassion and subsequent helping behaviors towards the company. A main finding is that the emergence of helping behaviors as a result of consumers’ compassion depends largely on company reputation. Self‐efficacy is a further focal construct influencing the intensity of felt compassion and helping behaviors depending on company reputation, suggesting that consumers apply emotion regulation strategies in such incidents.     

Next generation single-aisle aircraft – Requirements and technological solutions

In recent years, aircraft manufacturers have concentrated on developing new long-haul widebody aircraft, such as Airbus’s A380 and A350XWB and Boeing’s 787 and 747-8. The next challenge for manufacturers and suppliers is the development of new short- and medium-range single-aisle aircraft. This paper outlines how the challenges and quantified goals as developed by the Advisory Council for Aeronautics Research in its Strategic Research Agenda would influence and contribute to the improvement of the next generation of civil transport aircraft. It continues with a discussion on possible aircraft requirements from the viewpoint of an aircraft operator. Subsequently, the most important technological elements available for the next generation single-aisle aircraft are briefly characterised. Using the Council’s objectives for CO₂ emissions and noise, as an example it can be shown that a decoupling of air traffic growth and emissions/noise can be achieved.     

Land Auctions with Budget Constraints

This paper tests for the effects of financial constraints on open-bid English land auction prices and bids. It is argued that bidders’ ability to pay, taken as capital resources and/or capital budget constraints, influence bids and final auction prices. While high capital resource developers may elect to bid more than optimal to win auctions, or bidders may elect to pool resources in joint bidding, budget constraints imposed by firm-specific financial variables on the other hand are expected to restrict bids. Land auction data in Hong Kong are used to test systematically these predictions. It is found that a firm’s age, the number of winners in a joint bid, and firm status in the market are positively related to prices, all factors which may be attributed to a firm’s ability to finance the auction price. Firm size, internal funds, financing cost, debt capacity and existing capital expenditure are also shown to affect bids submitted in land auctions: firm size and internal funds are positively related to bid prices; while constrained debt capacity, financing cost and existing capital expenditure lower bids. The results are consistent with predictions that a firm’s financial constraints, and thus its effect on capital budgets, are relevant factors in predicting land auction outcomes. More generally, these findings confirm that similar financial factors that constrain corporate capital investment also influence directly acquisition of assets at auctions.     

Diversification of External Accountants Serving Small and Medium‐sized Enterprises: Evidence from Belgium

The purpose of this study is: (1) to discover which services are offered by external accountants serving small and medium‐sized enterprises (SMEs); (2) to study the factors that are associated with the degree of diversification of the services offered by these accountants; and (3) to investigate if there are differences between self‐employed accountants and accounting firms on the previous two points. This study has some interesting conclusions: (1) the heterogeneity of internal staff is not significantly associated with the degree of diversification; (2) a homogeneous internal staff with an accounting background is particularly important for accounting firms that diversify their services in the accounting and tax area; (3) collaboration with other service providers is an important factor associated with more diversification of the services; (4) marketing is only important for self‐employed accountants; (5) accounting firms offer fewer non‐accounting‐related services if they serve more micro clients (fewer than 10 employees), whereas self‐employed accountants offer more accounting and tax services if they serve more micro clients (fewer than 10 employees); and (6) accounting firms that diversify in accounting and tax services mainly serve more micro clients (fewer than 10 employees), whereas accounting firms that diversify in non‐accounting areas serve more larger clients (more than 10 employees).     

German bond markets and US monetary policy

Low interest rates have been a major problem for the European life insurance industry. The implementation of Solvency II certainly has forced European life insurers to improve their risk management procedures and to buy long term bonds in order to handle the interest rate risk inherent to their liabilities. As a consequence, the industry meanwhile more or less seems to be able to cope with the problem of low interest rates. However, now the US central bank has started to hike rates. The Bank of Canada meanwhile has followed its southern neighbor. The changed monetary policy environment in North America might create new challenges for asset managers in the European life insurance industry. This paper provides some additional thoughts and empirical evidence about the linkages between US monetary policy and the European bond market employing techniques of time series analysis.     

Addendum to L. Lauwers and L. Van Liedekerke, “Ultraproducts and aggregation” [J. Math. Econ. 24 (3) (1995) 217–237]

This addendum fills a minor gap in the key lemma of a paper by Lauwers and Van Liedekerke [Lauwers, L., Van Liedekerke, L., 1995. J. Math. Econ. 24 (3), 217–237].     

The effects of balanced and asymmetric dependence on supplier satisfaction: Identifying positive effects of dependency

Studies argue that balance in dependence is critical to supplier satisfaction in buyer-supplier relationships. We examine whether asymmetric relationships can also lead to supplier satisfaction, arguing that traditional analysis methods are unsuitable for thoroughly analyzing this issue. With polynomial regression and response surface analysis combined with dyadic data, we test the relationship between (1) balanced dependence (i.e., the buyer and supplier are equally dependent on each other) and supplier satisfaction and (2) asymmetric dependence (i.e., either the supplier or buyer is the dominant party) on supplier satisfaction. The results indicate that mutual dependence is positively related to supplier satisfaction, but surprisingly, asymmetric dependence can be related to higher levels of supplier satisfaction.