Strategic behavior in financial markets

We describe a financial market as a noncooperative game in strategic form. Agents may borrow or deposit money at a central bank and use the cash available to them in order to purchase a commodity for immediate consumption. They derive positive utility from consumption and from having cash reserves at the end of the day, whereas being bankrupt entails negative utility. The bank fixes interest rates. The existence of Nash equilibria (both mixed and pure) of the ensuing game is proved under various assumptions. In particular, no agent is bankrupt at equilibrium. Asymptotic behavior of replica markets is discussed, and it is shown that given appropriate assumptions, the difference between a strategic player and a price taker is negligible in a large economy.     

Socialising employees’ trust in the organisation: an exploration of apprentices’ socialisation in two highly trusted companies

We present here our investigation into how corporate employers deliberately seek to foster and build employees’ trust in the organisation through socialisation tactics. Interestingly enough, such deliberate development of employees’ trust in the organisation has hitherto rarely been addressed in academic research. Using qualitative case study research methods, we have closely observed the trust socialisation process experienced by entrant employees, namely apprentices in two separate and highly trusted German companies. Our findings are consistent with former trust socialisation research in that they indicate the importance of high levels of perceived organisational support and of a convincing communication of organisational values and principles. However, our research emphasises further aspects of trust socialisation, such as psychological empowerment, the efficacy of formal organisational rules and especially sensegiving activities.     

The distributional impact of public services when needs differ

Despite a broad consensus on the need to take into account the value of public services in distributional analysis, there is little reliable evidence on how inclusion of such non-cash income actually affects poverty and inequality estimates. In particular, the equivalence scales applied to cash income are not necessarily appropriate when including non-cash income, because the receipt of public services is likely to be associated with particular needs. In this paper, we propose a theory-based framework designed to provide a coherent evaluation of the distributional impact of local public services. The valuation of public services, identification of target groups, allocation of expenditures to target groups, and adjustment for differences in needs are derived from a model of local government spending behaviour. Using Norwegian data from municipal accounts and administrative registers we find that the inclusion of non-cash income reduces income inequality by about 15% and poverty rates by almost one-third. However, adjusting for differences in needs for public services across population subgroups offsets about half the inequality reduction and some of the poverty decrease.     

Explaining the size differences of exporter premia: theory and evidence

Two decades of research have established pronounced exporter productivity premia (EPP) and exporter size premia (ESP). Yet, we do not know why such exporter premia differ so widely in magnitude across countries or sectors? We take this question to the theory and to the data. We derive the sectoral EPP and ESP in a standard heterogeneous firms trade model and apply the insights from the model to guide our empirical investigation of detailed Danish firm-level data. We show that a significant share of the observed variation in EPP and ESP across sectors can be accounted for by sector differences in the underlying variation in productivity dispersion, variable trade costs, the ratio of fixed export costs to fixed costs of production, and the elasticity of demand.     

Die Ver?nderung des abschlusspolitischen Potenzials durch das BilMoG im Lichte der?Entscheidungsnützlichkeit der Rechnungslegung

Mit dem Bilanzrechtsmodernisierungsgesetz wollte der Gesetzgeber unter anderem eine im Verh?ltnis zu den IFRS gleichwertige, d. h. ebenso entscheidungsnützliche, aber einfachere und kostengünstigere Alternative bieten. Um dieses Ziel zu erreichen, wurden verschiedene Wahlrechte gestrichen, Bilanzierungsverbote aufgehoben und Bilanzierungsmethoden ver?ndert. Aus Sicht der Abschlusspolitik wurden damit einerseits explizite Wahlrechte verringert und andererseits implizite Wahlrechte geschaffen. Zudem bergen auch die übergangsvorschriften abschlusspolitisches Potenzial. Nach einer Einordnung der Abschlusspolitik und der Herausarbeitung der konkreten Potenziale werden die Konsequenzen in Bezug auf die Entscheidungsnützlichkeit diskutiert und die m?glichen Auswirkungen der ge?nderten Rechnungslegungsnormen am Beispiel der Bilanzierung von Pensionsverpflichtungen deutscher IFRS-Anwender empirisch belegt.     

Building foreign brand personalities in Russia: the moderating effect of consumer ethnocentrism

Based on a survey of Western brands in Russia, three contributions are offered to the literature on international brand-building. First, the Aaker brand personality scale (Aaker 1997) was tested in a Russian context. Important similarities and differences between Western and Russian brand personality perceptions were identified. Second, the results show that brand personalities of Western brands also have an impact on brand attitudes among Russian consumers. Third, and most importantly, it is demonstrated that the effect of Western brand personalities is heavily moderated by consumer ethnocentrism. Specifically, only low-ethnocentric consumers are influenced by foreign brand personalities.     

Challenges for land system science

While considerable progress has been made in understanding land use change, land system science continues to face a number of grand challenges. This paper discusses these challenges with a focus on empirical land system studies, land system modelling and the analysis of future visions of land system change. Contemporary landscapes are contingent outcomes of past and present patterns, processes and decisions. Thus, empirical analysis of past and present land-use change has an important role in providing insights into the socio-economic and ecological processes that shape land use transitions. This is especially important with respect to gradual versus rapid land system dynamics and in understanding changes in land use intensity. Combining the strengths of empirical analysis with multi-scale modelling will lead to new insights into the processes driving land system change. New modelling methods that combine complex systems thinking at a local level with macro-level economic analysis of the land system would reconcile the multi-scale dynamics currently encapsulated in bottom-up and top-down modelling approaches. Developments in land use futures analysis could focus on integrating explorative scenarios that reflect possible outcomes with normative visions that identify desired outcomes. Such an approach would benefit from the broad and in-depth involvement of stakeholders in order to link scientific findings to political and societal decision-making culminating in a set of key choices and consequences. Land system models have an important role in supporting future land use policy, but model outputs require scientific interpretation rather than being presented as predictions. The future of land system science is strongly dependent on the research community's capacity to bring together the elements of research discussed in the paper, via empirical data collection and analysis of observed processes, computer simulation across scale levels and futures analysis of alternative, normative visions through stakeholder engagement.     

INNOVATION AND GROWTH WITH RICH AND POOR CONSUMERS

This work studies the impact of income inequality on the level of innovative activities in a model where innovations result in quality improvements. In contrast to the standard model of innovations and growth, the equilibrium outcome may be characterized by a situation where not only the quality leader but also producers of worse qualities are on the market. In that case the quality leader sells to the rich, whereas the producer of the second‐best quality sells to the poor. In general, we find that a more equal distribution of income is favourable for innovation incentives. This is consistent with empirical evidence suggesting that countries with a more equal distribution of income have grown faster.