Bargaining one-dimensional social choices

We analyze bargaining over the one-dimension characteristic of a public good among n impatient players when decisions require q favorable votes, q?2. Stationary subgame perfect equilibrium strategies are characterized for all games with deterministic protocol. We provide a monotonicity condition (satisfied by all single-peak, strictly quasi-concave and concave utilities) that assures uniqueness for every q whenever player's utilities are symmetric around the peak. Without symmetry, the monotonicity condition assures uniqueness for qualified majorities, q>n/2, provided that agents are sufficiently patient and utilities satisfy an additional regularity condition. Asymptotic uniqueness is assured for qualified majorities by imposing only the monotonicity condition.     

Economic Diplomacy

We study bilateral conflicts that affect the welfare of third parties, the stakeholders. The conflict takes the form of a war of attrition and intervention is modeled as the possibility that the stakeholder “aids” the agreement with transfers to the contenders. We characterize the optimal policy when the stakeholder limits its intervention to a unilateral commitment to compensate the contenders if the conflict is resolved, and show that if contenders must be treated equally after agreement, then the optimal policy cannot eliminate the delay in resolving the conflict, and intervention is only advisable when the stakes are high enough. Economic diplomacy is modeled as a three‐player game where the stakeholder is actively involved in the negotiation where transfers are discussed simultaneously with a settlement for the conflict. We prove that, provided that none of the parties involved is too impatient, diplomacy benefits the third party in all conflicts.     

Who gets the carrot and who gets the stick? Evidence of gender disparities in executive remuneration

This paper offers a new explanation of the gender pay gap in leadership positions by examining the relationship between managerial bonuses and company performance. Drawing on findings of gender studies, agency theory, and the leadership literature, we argue that the gender pay gap is a context‐specific phenomenon that results partly from the fact that company performance has a moderating impact on pay inequalities. Employing a matched sample of 192 female and male executive directors of U.K.‐listed firms, we corroborate the existence of the gender pay disparities in corporate boardrooms. In line with our theoretical predictions, we find that bonuses awarded to men are not only larger than those allocated to women, but also that managerial compensation of male executive directors is much more performance‐sensitive than that of female executives. The contribution of attributional and expectancy‐related dynamics to these patterns is highlighted in line with previous work on gender stereotypes and implicit leadership theories such as the romance of leadership. Gender differences in risk taking and confidence are also considered as potential explanations for the observed pay disparities. The implications of organizations' indifference to women's performance are examined in relation to issues surrounding the recognition and retention of female talent. Copyright © 2010 John Wiley & Sons, Ltd.     

Rubinstein bargaining with two-sided outside options

Summary. In this note we show that if in the standard Rubinstein model both players are allowed to leave the negotiation after a rejection, in which case they obtain a payoff of zero, then there exist a continuum of subgame-perfect equilibrium outcomes, including some which involve significant delay. We also fully characterize the case in which, upon quitting, the players can take an outside option of positive value. Received: February 27, 1996; revised version: March 28, 1997     

Robust portfolio estimation under skew-normal return processes

In this paper, we study issues related to the optimal portfolio estimators and the local asymptotic normality (LAN) of the return process under the assumption that the return process has an infinite moving average (MA) (∞) representation with skew-normal innovations. The paper consists of two parts. In the first part, we discuss the influence of the skewness parameter δ of the skew-normal distribution on the optimal portfolio estimators. Based on the asymptotic distribution of the portfolio estimator ? for a non-Gaussian dependent return process, we evaluate the influence of δ on the asymptotic variance V(δ) of ?. We also investigate the robustness of the estimators of a standard optimal portfolio via numerical computations. In the second part of the paper, we assume that the MA coefficients and the mean vector of the return process depend on a lower-dimensional set of parameters. Based on this assumption, we discuss the LAN property of the return's distribution when the innovations follow a skew-normal law. The influence of δ on the central sequence of LAN is evaluated both theoretically and numerically.     

Factors affecting success in the professional entry exam for accountants in Brazil

This paper explores factors that have affected the success of candidates in the professional entry exam conducted by Brazil’s Federal Council of Accounting. We analyse results of 18,948 candidates who sat for the exam in 2012, using a logistic regression model and the key indicators used by government to monitor the performance of higher education institutions (HEIs) and the characteristics of candidates. We find that success is related positively to the quality of the HEIs from which candidates graduated and to a measure of student ability that is used widely in Brazil. We find also that males perform better than females and that younger candidates perform better than older candidates. The geographical region of Brazil within which candidates completed the exam was also significant. The insights provided will help public policy-makers in Brazil, and the Brazilian accounting profession, to understand key factors associated with current low pass rates.     

Product Market Competition,Executive Compensation,and CEO Family Ties

Review of Industrial Organization - This paper analyzes the interaction between product market competition and family ties on the structure of CEO pay, in a panel of publicly listed family firms....     

Queues, not just mediocrity: Inefficiency in decentralized markets with vertical differentiation

We analyze a dynamic, decentralized market with endogenous entry, where in each period the active sellers supply one unit of an indivisible service at varying degrees of quality. The customers that have entered the market are randomly matched with the active sellers and prices are set by (complete information) pair-wise bargaining. In its unique steady state, the market leads to an excess diversity of quality and customers may have to suffer costly delays. Notably, efficiency is not regained as per period delay costs disappear. We also show that setting minimal quality standards, such as licensing rules by a professional college, will improve welfare (and even Consumer Surplus), relative to the free market, whenever the inefficiency is caused by a large enough excess supply.     

Sensory characteristics of fufu prepared with cassava roots (Manihot esculenta Crantz) stored in polyethylene sacks

This study was carried out to assess the effect of storage of cassava roots in polyethylene sacks for periods of 2, 4, 6 and 8 weeks on the sensory characteristics of cassava fufu, a popular Ghanaian dish. Freshly harvested cassava roots were dipped in tap water and packed into polyethylene sacks in 2‐kg batches and stored at room temperature (25°C ± 1°C). Samples of fresh cassava fufu were evaluated and then at two weekly intervals for a period of 8 weeks. Attributes evaluated were colour, smell, elasticity, smoothness and taste. A structured six‐point ranking scale ranging from 6 (excellent) to 1 (very poor) was used for the evaluation. The data were analysed using analysis of variance, and the least significance difference test at P < 0.05 was used to determine differences between means. The results showed that storage of cassava roots for up to 8 weeks did not significantly affect the colour, smell, elasticity and taste of cassava fufu. However, smoothness of fufu prepared with cassava stored for 6 and 8 weeks was significantly different from the samples of the fresh cassava, and those stored for 2 and 4 weeks. It was concluded that cassava roots stored for periods up to 8 weeks in polyethylene sacks produced fufu of similar characteristics as fresh cassava fufu. This method is therefore recommended for use by homemakers, food service operators, cassava retailers and processors to save them time, energy and money used for the frequent trips for purchases. The method would also reduce post‐harvest losses to a large extent.     

The on-the-run liquidity phenomenon

We test the implications of a model of multi-asset speculative trading in which liquidity differentials between on-the-run and off-the-run U.S. Treasury bonds ensue from endowment shocks in the presence of two realistic market frictions—information heterogeneity and imperfect competition among informed traders—and a public signal. Our evidence suggests that (i) off/on-the-run liquidity differentials are economically and statistically significant, even after controlling for several of the bonds’ intrinsic characteristics (such as duration, convexity, repo rates, or term premiums), and (ii) off/on-the-run liquidity differentials are smaller immediately following bond auction dates, and larger when the uncertainty surrounding the ensuing auction allocations is high, when the dispersion of beliefs across informed traders is high, and when macroeconomic announcements are noisy, consistent with our model.