Local Administration Reform in Estonia: Alternatives from an Economic Point of View

As the Estonian experience with local taxes has turned out in the last decade small rural municipalities have not been able to profit from the right to collect local taxes. Tax collecting and administrative costs have been too high. Therefore the local administrative system did not succeed and developed into a grants-in-aid system during the transition process. But from an allocational point of view such a development is not satisfactory. Incentives for local governments to save taxpayers' money and to seek new industrial establishments intensively are lacking. Only an administrative system characterised by institutional competition can solve these problems. In this article the advantages of institutional competition between local jurisdictions in Estonia are discussed. Additionally, a concrete system of competing enlarged counties is recommended.     

Social support among heterogeneous partners: an experimental test

This paper studies how dyadic social support is affected by heterogeneity of the partners. We distinguish heterogeneity with respect to three parameters the likelihood of needing support; the benefits from receiving support; and the costs of providing support. Hypotheses are based on a game-theoretic analysis of an iterated support game. First, we predict that heterogeneity in one of the parameters hampers social support. Second, we predict that under heterogeneity with respect to two of the parameters, support is most likely if there is a specific heterogeneous distribution such that heterogeneity in one parameter ‘compensates’ for heterogeneity in the other parameter. If there is no compensation social support is even more hampered. The hypotheses have been tested by experimental data with a mixed within-subject, between-subject design. The data gives support to the hypotheses.     

Understanding consumers’ multichannel choices across the different stages of the buying process

This article provides a more integrative approach toward channel choice than previous research by considering all stages of the buying process (search, purchase, and after-sales), and by taking channel attributes, experience, and spillover effects into account when examining consumers?? channel choice intentions. The authors show that such an integrative perspective is important as channel attributes, experience, and spillover matter for consumers?? channel choices in all stages of the buying process. Notably, the study stresses the importance of channel experience and spillover effects for explaining consumers?? channel choice intentions in the different stages of the buying process. Channel experience effects occur when using the channel increases the likelihood that the consumer will use the very same channel on the next occasion. Spillover effects result when the likelihood of using a channel in one stage of the buying process affects the likelihood of choosing that channel in another stage. The results show that both effects influence consumers?? channel choice intentions over and above channel attributes. Importantly, the model results strongly pledge for studying attribute, experience, and spillover effects simultaneously.     

Managing Brands in the Social Media Environment

The dynamic, ubiquitous, and often real-time interaction enabled by social media significantly changes the landscape for brand management. A deep understanding of this change is critical since it may affect a brand's performance substantially. Literature about social media's impact on brands is evolving, but lacks a systematic identification of key challenges related to managing brands in this new environment. This paper reviews existing research and introduces a framework of social media's impact on brand management. It argues that consumers are becoming pivotal authors of brand stories due to new dynamic networks of consumers and brands formed through social media and the easy sharing of brand experiences in such networks. Firms need to pay attention to such consumer-generated brand stories to ensure a brand's success in the marketplace. The authors identify key research questions related to the phenomenon and the challenges in coordinating consumer- and firm-generated brand stories.     

Profit Related Pay and the U.K. Small Firm Labour Market

This paper critically examines the relevance of profit related pay (PRP) for the U.K. small firm sector. Since 1986, the U.K. government has actively encouraged PRP, which attracts generous tax breaks, because it believed that PRP would make pay more flexible downwards and would significantly improve employee identification, morale and productivity. An analysis of the theoretical arguments and the assumptions made regarding the nature of the U.K. small firm sector that underlay these claims suggests, however, that the likelihood of achieving either of these alleged benefits is small. An appraisal of the available empirical evidence on the practical implementation and operation of PRP schemes suggests that the tax relief simply encourages firms to introduce cosmetic schemes that have no appreciable impact upon the behaviour of either firms or employees. Moreover, the experience of some firms that adopted PRP schemes indicates that, far from increasing morale and productivity, PRP often creates new tensions and conflict between owners and employees. These and other unintended consequences illustrate the inherent difficulties of government attempts to use the tax system to alter the behaviour of agents engaged in a wide variety of complex and very heterogeneous bargaining situations.