Should More Risk-Averse Agents Exert More Effort?

Consider an agent facing a risky distribution of losses who can change this distribution by exerting some effort. Should he exert more effort when he becomes more risk-averse? For instance, should we expect more risk-averse drivers to drive more cautiously? In this article, we give sufficient conditions under which the answer is positive, using results presented in Jewitt (1989). We first extend the standard models of self-insurance and self-protection and show that the comparative statics depends only on the effect of effort on the net loss. We then present conditions for the continuous case with applications.     

Liability Risk for Outside Directors: a Cross‐Border Analysis

Much has been said recently about the risky legal environment in which outside directors of public companies operate, especially in the USA, but increasingly elsewhere as well. Our research on outside director liability suggests, however, that directors’ fears are largely unjustified. We examine the law and lawsuit outcomes in four common law countries (Australia, Canada, Britain, and the USA) and three civil law countries (France, Germany, and Japan). The legal terrain and the risk of ‘nominal liability’(a court finds liability or the defendants agree to a settlement) differ greatly depending on the jurisdiction. But nominal liability rarely turns into ‘out‐of‐pocket liability,’ in which the directors pay personally damages or legal fees. Instead, damages and legal fees are paid by the company, directors’ and officers’(D&O) insurance, or both. The bottom line: outside directors of public companies face a very low risk of out‐of‐pocket liability. We sketch the political and market forces that produce functional convergence in outcomes across countries, despite large differences in law, and suggest reasons to think that this outcome might reflect sensible policy.     

Rituals in managing extrabusiness relationships in international project marketing: a conceptual framework

The current craze for the so-called relationship marketing in business markets must not mask the fact that, beyond economic and technological interdependencies between companies, business relationships are also made up of social interactions. This social dimension often escapes the attention of marketing theorists although it is of major importance in the management of business relationships. On the basis of an investigation into international project activities, this article develops a ritual approach for managing the extrabusiness phase of business relationships. This ritual approach allows us to build a framework designed to encapsulate and, possibly, manage the many faces of the social dimension of business relationships.     

Employment and training solutions for the economically disadvantaged: An essay

Conclusion The persistence of urban poverty and the presence of economically disadvantaged families in our cities is a continuing challenge to national aspirations for equal opportunity and economic justice. A continuing bifurcation of society between those who enjoy an increasing share of economic prosperity and others who are stuck on the lowest rung of the economic ladder should be unacceptable. The search must continue for ways to improve the productivity and earning power of those who need assistance in getting a foothold on the escalator to a middle-income standard of living. Employment and training programs remain one of the options necessary to achieve that goal. While past programs have not been a panacea, they have contributed to a modest improvement in income among many who participated in them. In the choice of weapons required to combat urban poverty, employment and training programs should be part of the arsenal. The experience of the past, while limited, justifies continued investment in the employment and training option, and the continued experimentation with programs to address the needs of specific target groups. Only by testing new and increasingly comprehensive training models will we find the right mix to accelerate the decline in urban poverty. To achieve success in reducing urbna poverty, it is important to maintain steady, balanced economic growth, and persist in the experimentation with job training models.     

Michalos and the Theory of Ethical Theory

The paper replies to Professor Alex Michalos' keynote address, "Ethics Counsellors as a New Priesthood". Michalos argues that an intractable diversity of opinion about fundamental issues in ethical theory precludes substantive, well-founded ethical counselling. However, Michalos has inappropriately modelled his understanding of an acceptable structure and application for ethical theory on natural scientific theory. For we may countenance a less severe understanding of theory for ethical theory than in the hard sciences. In particular, instructive moral reasoning may tolerate a degree of disagreement across human beings in their conception of moral good. On condition that such variance is not so considerable as to undermine a necessary commonality of language on ethical matters, there will be an adequate basis for warranted theory-construction in ethics and effective moral counselling underwritten by such theory. And, on the available historical evidence, such a condition can be met.     

Survival of the best fit: Exposure to low-wage countries and the (uneven) growth of U.S. manufacturing plants

This paper examines the role of international trade in the reallocation of U.S. manufacturing within and across industries from 1977 to 1997. Motivated by the factor proportions framework, we introduce a new measure of industry exposure to international trade that focuses on where imports originate rather than on their overall level. We find that plant survival and growth are negatively associated with industry exposure to low-wage country imports. Within industries, we show that manufacturing activity is disproportionately reallocated towards capital-intensive plants. Finally, we provide the first evidence that firms adjust their product mix in response to trade pressures. Plants are more likely to switch industries when exposure to low-wage countries is high.     

Toward a Typology of University Spin-offs

This paper discusses existing definitions of USOs in order to reconcile them and to provide criteria for classifying and understanding the different facets of this multi-headed concept. Drawing the boundaries of this concept and elucidating its variety through a typology are therefore the two main objectives of this paper. USOs are defined as new firms created to exploit commercially some knowledge, technology or research results developed within a university. The proposed typology is based on two key discriminatory factors, namely (1) the status of individuals involved in the new business venturing process (researchers or students) and (2) the nature of knowledge transferred from university to the new venture (codified or tacit), inducing the nature of the USO activities (product or service-oriented).     

Consumer Segments Based on Attitudes Toward Luxury: Empirical Evidence from Twenty Countries

This article proposes an international segmentation of consumers based on their attitudes toward luxury. We perform a two-stage empirical study with a data set that combines samples from 20 countries. We provide a substantive interpretation of the results to show that three attitude segments dominate in a Western cultural context. We discuss several directions for future research based on the findings.     

A model-free approach to multivariate option pricing

Review of Derivatives Research - We propose a novel model-free approach to extract a joint multivariate distribution, which is consistent with options written on individual stocks as well as on...