When is escalation of commitment unstoppable in group settings? An iterative economic modeling approach to unveil the dark side of group decision-making

Escalation of commitment (EOC) has been usually studied from a psychological lens, and only recently have scholars approached EOC from an economic perspective. We contribute to this by focusing on iterative decision-making in group settings with a game theory approach. We study how the group members' strategic interaction may result in continuing failing courses of action. Drawing on the Byzantine generals' problem, our model considers an iterative decision-making process where committee participants vote based on private information to escalate or not. Our article demonstrates that if decision-makers reset their beliefs based on the committee's previous decision, then EOC becomes perpetual.     

Immigrants’ net direct fiscal contribution: How does it change over their lifetime?

Life-cycle direct public fiscal contributions and transfers are studied using longitudinal income tax data from 1982 to 2016 and administrative files for immigrants landed in Canada from 1980 to 2016. Relative to a comparison group comprising the Canadian-born and immigrants landed before 1980, immigrants since 1980 have a lower average net direct fiscal contribution (NDFC) during their working years due to their lower taxes and social security contributions but a higher average NDFC after 65 years of age because of reduced public pension eligibility and entitlement. Immigrants who landed at younger than 19 years old have much higher direct fiscal contributions than other age-at-arrival groups and reach their peak of contributions around 10 years earlier in life than other age-at-arrival groups. Immigrants whose age at arrival is above 65 have a less negative average NDFC than other age-at-arrival groups over the above-65 life cycle. These life-cycle age𠄁at-arrival trajectories are stable for immigrants in different landing cohorts. We apply the life-cycle estimates to project the present discounted value of lifetime NDFCs for immigrants who landed in 2016. For each landing age group, refugees and family class immigrants have negative or zero average present values of life-cycle NDFCs, much below that of economic immigrants.     

The Hassle Factor as a Psychological Barrier to a Green Home

Journal of Consumer Policy - In order to reach climate goals, policymakers stimulate homeowners to invest in sustainable measures in and around their house. Unfortunately, however, the number of...     

Vulnerability,due process,and reform in modern Mexico

Constitutional Political Economy - In this paper, we examine the relationship between socioeconomic vulnerabilities and due process violations in contemporary Mexico, using a novel survey of...     

Disappearing investment-cash flow sensitivities: Earnings have not become a worse proxy for cash flow

According to a recent conjecture in the literature, earnings have become a poorer proxy for cash flow from operations over time. We find that since 1988, when cash flow statements started to be consistently reported in Compustat, the cash effectiveness of earnings has actually increased for a large sample of US manufacturing firms. This occurs despite the introduction of fair value accounting and increasing accounting accruals during the last three decades. Also contrary to the conjecture, using more comprehensive measures of cash flow does not restore the investment-cash flow sensitivity, which continues to be around 0.05 in more recent periods.     

Assessing Systemic Importance With a Fuzzy Logic Inference System

Three metrics are designed to assess Colombian financial institutions' size, connectedness and non-substitutability as the main drivers of systemic importance: (i) centrality as net borrower in the money market network; (ii) centrality as payments originator in the large-value payment system network; and (iii) asset value of core financial services. An aggregated systemic importance index is calculated based on expert knowledge by using a fuzzy logic inference system. We use principal component analysis to calculate a benchmark index for comparison purposes. Overall similarities between both indexes put forward that expert knowledge aggregation is consistent with that based on a purely quantitative standard approach. Specific non-negligible differences concur with the nonlinear features of an approach whose intention is to replicate human reasoning. Both indexes are complementary and provide a comprehensive relative assessment of each financial institution's systemic importance in the Colombian case, in which the choice of metrics pursues the macroprudential perspective of financial stability. Copyright © 2015 John Wiley & Sons, Ltd.     

Business strategies and the transition to low‐carbon cities

Cities are key drivers of global climate change, with the majority of greenhouse gas (GHG) emissions being tied to urban life. Local actions to mitigate and adapt to climate change are essential for stabilization of the global climate and can also help to address other urban ecological problems such as pollution, decreasing biodiversity, etc. Companies are important urban actors in the development of low‐carbon cities because they provide a multitude of goods and services to city populations and directly influence urban carbon dioxide (CO₂) emissions. This is a new area of research. While studies on corporate sustainability are numerous, there is little, if any, existing research that examines the role of companies in climate change adaptation and mitigation within specific urban areas. Urban ecologists also have not examined how corporate activity affects urban systems. Taking a multi‐disciplinary systems approach, we present a conceptual model of the role of companies in managing urban interactions with the climate system. We also present empirical findings illustrating how one company ‘partners’ with the city of Rotterdam to test electric vehicles as a pilot project for urban climate adaptation and mitigation. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.     

Urban Warfare Ecology: A Study of Water Supply in Basrah

This article assesses the impact of armed conflict on the drinking water service of Basrah from 1978 to 2013 through an ‘urban warfare ecology’ lens in order to draw out the implications for relief programming and relevance to urban studies. It interprets an extensive range of unpublished literature through a frame that incorporates the accumulation of direct and indirect impacts upon the hardware, consumables and people upon which urban services rely. The analysis attributes a step‐wise decline in service quality to the lack of water treatment chemicals, lack of spare parts, and, primarily, an extended ‘brain‐drain’ of qualified water service staff. The service is found to have been vulnerable to dependence upon foreign parts and people, ‘vicious cycles’ of impact, and the politics of aid and of reconstruction. It follows that practitioners and donors eschew ideas of relief–rehabilitation–development (RRD) for an appreciation of the needs particular to complex urban warfare biospheres, where armed conflict and sanctions permeate all aspects of service provision through altered biological and social processes. The urban warfare ecology lens is found to be a useful complement to ‘infrastructural warfare’ research, suggesting the study of protracted armed conflict upon all aspects of urban life be both deepened technically and broadened to other cases.