Public good agreements under the weakest‐link technology

We analyze the formation of public good agreements under the weakest‐link technology. Whereas policy coordination is not necessary for symmetric players, it matters for asymmetric players; however, this fails in the absence of transfers. By contrast, with a transfer scheme, asymmetry may be an asset for cooperation. We characterize various types and degrees of asymmetry and relate them to the stability of self‐enforcing agreements. Asymmetric distributions of autarky public good provision levels (also representing asymmetric interests in cooperation) that are positively skewed tend to be conducive to the stability of agreements. We show that under such conditions, even a coalition including all players can be stable. However, asymmetries that foster stability (instability) tend to be associated with low (high) gains from cooperation.     

Institutional Ownership, Strategic Choices and Corporate Efficiency: Evidence from Japan

Based on the tenets of capital allocation systems theory, stewardship theory, and 'going concern' concept of business, institutional ownership is proposed to affect corporate productivity, both directly and indirectly, in large Japanese corporations through a set of four firm-level choices: product/market development, R&D intensity, capital intensity, and leverage. Using data on 118 corporations drawn from five industry sectors in Japan, and applying a partial mediation technique, this study tests an integrated, causal model of the relationships among these variables. Results show mixed support for the model. No direct relationship between institutional ownership and productivity is observed. However, institutional ownership affects productivity indirectly through R&D intensity and leverage. Although product/market development and capital intensity also affect productivity, institutional ownership has no significant relationship with them.     

Start-ups, long- and short-term survivors, and their contribution to employment growth

This study documents that the survival of start-ups is central in explaining the relationship between entry and regional employment growth. Distinguishing between start-ups according to the period of their survival shows that the positive effect of new business formation on employment growth is mainly driven by those new businesses that are strong enough to remain in the market for a certain period of time. This result is especially pronounced for the relationship between the surviving start-ups and employment growth in incumbent businesses indicating that there are significantly positive indirect effects of new business formation on regional development. We draw conclusions for policy and make suggestions for further research.     

Mega‐Regional Agreements and Their Impact on Australia

This paper estimates the effects of emerging mega‐regional agreements on the economy of Australia using a Computable General Equilibrium model. Scenarios considered include the 11‐member Comprehensive and Progressive Agreement for Trans‐Pacific Partnership (CPTPP) agreement, its possible enlargement to include five additional members (‘TPP16’) and the Regional Comprehensive Economic Partnership (RCEP) currently under negotiation. The study finds that Australia stands to enjoy real income and trade gains along both the CPTPP and RCEP paths. However, since Australia is already benefiting from its own liberal trade policies and many prior trade agreements, benefits are relatively modest, typically below one per cent of real income.     

Complex solutions of nonconcave dynamic optimization models

Summary In this paper we consider a class of time discrete intertemporal optimization models in one dimension. We present a technique to construct intertemporal optimization models with nonconcave objective functions, such that the optimal policy function coincides with any pre-specifiedC ² function. Our result is a variant of the approach presented in a seminal paper by Boldrin and Montrucchio (1986). Whereas they solved the inverse problem for the reduced form models, we address the different question of how to construct both reduced and primitive form models. Using our technique one can guarantee required qualitative properties not only in reduced, but also in primitive form. The fact that our constructed model has a single valued and continuous optimal policy is very important as, in general, nonconcave problems yield set valued optimal policy correspondences which are typically hard to analyze. To illustrate our constructive approach we apply it to a simple nonconcave model.We are grateful for the helpful comments of L. Montrucchio, K. Nishimura, T. Mitra and an anonymous referee. Financial support of the Austrian Science Foundation under contract No. P7783-PHY and No. J01003-SOZ is gratefully acknowledged. This paper was written while M. Kopel was visiting the Department of Economics, Cornell University.     

Polanyi’s ‘substantive approach’ to the economy in action? Conceptualising social enterprise as a public health ‘intervention’

For several decades now, critical public health researchers have highlighted the deleterious effects that pursuing neoliberal policies can have on the ‘causes of the causes’ of poor health and upon growing health inequalities. This paper argues that the conceptual tools of Karl Polanyi can help lend particular insight into this issue. The specific example that this paper focuses upon is the ‘social enterprise’: a form of organisation that combines both social and business objectives. The paper explores, conceptually, whether social enterprises may have the potential to act as one component of a neo-Polanyian countermovement: helping to re-embed the economy back into society, and offering greater recognition for a more comprehensive and socially imbued concept of health. Importantly, this potential is critically examined in the context of neoliberal hegemony, where challenges to the status quo have regularly been met with assimilation, co-option and/or repression.     

Median stable matching for markets with wages

We define the median stable matching for two-sided matching markets with wages and prove constructively that it exists.     

Me or information technology? Adoption of artificial intelligence in the delegation of personal strategic decisions

Artificial intelligence is revolutionizing the way we do business. Whereas both the adoption of technological innovations and strategic decision making have been subject to prior research, this experimental study is first to combine both. To understand the impact of choice complexity and cognitive perceptions on the willingness to delegate a strategic decision to an algorithm, we conducted an experiment with 310 participants. We find that although choice complexity has no effect, participants with low levels of situational awareness are more likely to delegate. The findings augment research on choice complexity in decision making by emphasizing the relevance of cognitive perceptions.