Prior‐free Bayes Factors Based on Data Splitting

Bayes factors that do not require prior distributions are proposed for testing one parametric model versus another. These Bayes factors are relatively simple to compute, relying only on maximum likelihood estimates, and are Bayes consistent at an exponential rate for nested models even when the smaller model is true. These desirable properties derive from the use of data splitting. Large sample properties, including consistency, of the Bayes factors are derived, and a simulation study explores practical concerns. The methodology is illustrated with civil engineering data involving compressive strength of concrete.     

Bailouts,Inflation, and Risk-Sharing in Monetary Unions

This paper presents a new rationalization for bailouts of sovereign debt in monetary unions, such as those observed during the recent Euro crisis. It introduces a model where member countries of the monetary union are ex-ante identical, and each derives utility from consumption and disutility from the union-wide inflation rate. The union’s central bank is utilitarian and lacks commitment. Countries borrow or save in a market for nominal sovereign debt in response to idiosyncratic income shocks, with countries that receive positive income shocks saving and countries that receive negative income shocks borrowing. Ex post, the monetary union’s central bank will attempt to devalue sovereign debt through surprise inflation, as this will redistribute income from rich creditor countries to poor debtor countries. Creditor countries choose to bailout debtor countries because bailouts will weaken the redistributive motives of the central bank and forestall surprise inflation. As bailouts in this environment constitute a payment from lucky creditor countries to unlucky debtor countries, they mimic a risk-sharing arrangement that insures against income shocks. The payments made by creditor countries are incentive-compatible due to the shared currency and inflation rate in the monetary union. This ability of countries to provide each other with incentive-compatible insurance constitutes a novel theory of optimal currency areas. This insurance benefit of the monetary union is largest for countries with negatively correlated income shocks, in contrast to the classic Mundell-Friedman optimal currency area criterion.

     

Catch More to Catch Less: Estimating Timing Choice as Dynamic Bycatch Avoidance Behavior

Environmental and Resource Economics - We model harvesters’ temporal participation behavior in a fishery with individual quotas for both a target and bycatch species. Harvesters make...     

Situated Cyborg Knowledge in Not so Borderless Online Global Education: Mapping the Geosocial Landscape of a MOOC

Theorising situated knowledge formation in relation to geopolitics, geoeconomics and the geosocial, this article adds to the growing literature that evaluates Massive Open Online Courses (MOOCs) by studying who actually participates in them, how, and with what sorts of outcomes. Doing so, this article argues against a geoeconomic view of MOOCs as the revolutionary technology of borderless ‘flat world’ education. Instead, it outlines the far-from-borderless landscape of MOOC participation in terms of geosocial unevenness using evidence from the discussion boards of a global MOOC on globalisation. Based on this empirical evidence, this article suggests that MOOCs can enable forms of connective action through online educational networking, but that these forms of cyborg knowledge formation are possible precisely because they are not ‘borderless, gender-blind, race-blind, class-blind and bank account blind’.     

A Meta-Ethical Perspective on Organizational Identity

Although much of the growing literature on organizational identity implicitly recognizes the normative nature of identity, the ethical implications of organizational identity work and talk have not yet been explored in depth. Working from a meta-ethical perspective, we claim that the dynamic, processual, and temporal activities recently associated with organizational identity always have an ethical dimension, whether “good” or “bad.” In order to describe the ethical dimensions of organizational identity, we introduce the balance theory of practical wisdom as a theoretical framework, and connect this theory to existing organizational identity concepts. We present an empirical case focused on an international paint company to illustrate the relevance of this theory for empirical organizational identity research. Our intention is to expand existing theory by bringing an aspect of organizational identity that has been tangentially acknowledged to the forefront, and by identifying it as a fruitful avenue for future theory development as well as empirical research.     

The bottom-line benefits of ethics code commitment

Recent corporate scandals highlight that an exclusive focus on financial performance, to the exclusion of broader stakeholder-related performance criteria, can be detrimental to overall firm value creation. Among the ways to enhance leaders’ focus on stakeholder value creation is the development and executive championing of an effective code of ethics. Such “Ethics Code Commitment” (ECC)—which incorporates characteristics of the code and behaviors by top management—affects a broad number of organizational stakeholders, yielding value for them, thus increasing their psychological and/or financial commitment to the organization while strengthening the firm's corporate culture. This article develops a model highlighting the various benefits of ECC to key stakeholders and the subsequent effects on an organization's culture and competitiveness. In particular, we focus on the need to include community leaders and key employees in the ethics code development process; the importance of moving away from a purely legalistic document to one that inspires stakeholders; the importance of linking ethics to strategy; and managerial approaches that can enhance the effectiveness of the code of ethics through ethics-related dialog. When developed and implemented correctly, ECC can prove to be an important source of competitive advantage via the effects it has on relationships between the firm and key stakeholders.