Socially responsible firms and endogenous choice of strategic incentives

In this paper we are analyzing a mixed quantity-setting duopoly consisting of a socially concerned firm and a profit-maximizing firm. The socially concerned firm considers one group of stakeholders in its objective function and maximizes its profit plus a share of consumer surplus. Both firms have the option to hire a manager who determines the production quantity on behalf of the firm's owner. We find that in the subgame-perfect equilibrium of this game both firms hire a manager and delegate the production choice. If the unit production costs of the firms are similar, then the socially concerned firm has a higher market share and even higher profit. Interestingly, we observe that the relationship between the share of consumer surplus taken into account by the socially concerned firm and its profit is non-monotonic. As the share increases, the socially concerned firm's profit first increases and then decreases. The conclusion is that it pays off to take stakeholder interests into account, but not too much.     

Environmental Orientation and Economic Performance: a Quasi‐experimental Study of Small Swedish Firms

This paper investigates the relationship between the environmental orientation and economic performance of small firms. We conduct a quantitative analysis on a sample of 299 environmentally oriented and all other small (2–49 employees) Swedish firms. We estimate the effect of environmental orientation on profit margin to examine how environmentally oriented firms perform in relation to non‐environmentally oriented firms. To do this, we employ a quasi‐experimental design in which we create a control group of non‐environmentally oriented firms that are very similar to their environmentally oriented counterparts. We use two measures of environmental orientation: (i) a third‐party classification, and (ii) a self‐assessment of environmental differentiation. The findings show a negative effect of environmental orientation on economic performance. Our contribution to the literature is in using a novel and more rigorous way to measure the relationship between environmental orientation and economic performance and providing implicit support for the existence of a causal link from economic performance to environmental orientation. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Pharmacoeconomics of ruxolitinib therapy in patients with myelofibrosis

Background:

Overall survival (OS) and other important clinical trial end-points seem increasingly more elusive in supporting rapid and efficient incorporation of innovative cancer drugs in clinical practice. This study proposes a clinical trial based pharmacoeconomic framework to assess the therapeutic and economic value of ruxolitinib in patients with intermediate-2 or high-risk myelofibrosis.

Methods:

Individual patient level 144 week follow-up data from the COMFORT-II trial was used to account for the crossover effect on overall survival. Lifetime treatment benefits and costs were estimated considering detailed patterns of both ruxolitinib dose adjustments and blood transfusion needs.

Results:

The authors estimate a 3.3 years increment in life expectancy (HR?=?0.30; 95% CI?=?0.17–0.55; p-value <0.001) and an incremental cost-effectiveness ratio of €40,000 per life year gained with the use of ruxolitinib.

Conclusion:

This study also demonstrates how valuable information from clinical trials can be used to support informed decisions about the early incorporation of innovative drugs.     

The Social Shaping of the Participation of Employees in Environmental Work within Enterprises - Experiences from a Danish Context

The paper deals with the shaping of the participation of employees in environmental work within enterprises. The paper is based on two case studies on Danish enterprises, which, as part of the development of their environmental work, emphasized employee involvement. The cases show that it is difficult to maintain the participation of employees in environmental work, even in enterprises with an intention to do so. The cases contribute to the identification of those situations during the shaping of environmental work in an enterprise where choices concerning employee participation are made: (1) The need of management to involve employees in the environmental work; (2) The competence building among employees and local supervisors; and (3) The stabilization of the environmental work into routines and structures. The theoretical approach draws on organizational theory emphasizing the connection between environmental strategies, measures and competence needs, and the shaping of the participation of employees as social processes formed by the existing culture and the pressure generated by the preventive environmental work.     

How does Monetary Policy Respond to Exchange Rate Movements? New International Evidence*

This article analyzes how monetary policy has responded to exchange rate movements in six open economies, paying particular attention to the two‐way interaction between monetary policy and the exchange rate. We address this issue using a structural VAR model that is identified using a combination of sign and short‐term (zero) restrictions. Doing so we find that, while there is a instantaneous reaction in the exchange rate following a monetary policy shock in all countries, monetary policy responds significantly on impact to an exchange rate shock in only four of the six countries.     

Unallocated loss adjustment expense reserving

In non-life insurance, the provision for outstanding claims (the claims reserve) should include future loss adjustment expenses, i.e. administrative expenses to settle the claims, and therefore we have to estimate the expected Unallocated Loss Adjustment Expenses (ULAE) – expenses that are not attributable to individual claims, such as salaries at the claims handling department. The ULAE reserve has received little attention from European actuaries in the literature, supposedly because of the lack of detailed data for estimation and evaluation. Having good estimation procedures will, however, become even more important with the introduction of the Solvency II regulations, which require unbiased estimation of future cash flows for all expenses. We present a model for ULAE at the individual claim level that includes both fixed and variable costs. This model leads to an estimate of the ULAE reserve at the aggregate (line-of-business) level, as demonstrated in a numerical example from a Swedish non-life insurer.     

An experimental study of prosocial motivation among criminals

The fact that criminal behavior typically has negative consequences for others provides a compelling reason to think that criminals lack prosocial motivation. This paper reports the results from two dictator game experiments designed to study the prosocial motivation of criminals. In a lab experiment involving prisoners, we find a striking similarity in the prosocial behavior of criminals and non-criminals, both when they interact with criminals and when they interact with non-criminals. Similarly, in an Internet experiment on a large sample from the general population, we find no difference in the prosocial behavior of individuals with and without a criminal record. We argue that our findings provide evidence of criminals being as prosocially motivated as non-criminals in an important type of distributive situations.     

Immigration Wage Effects by Origin

We estimate the direct partial wage effects of immigrant‐induced increases in labor supply, using the national skill cell approach with longitudinal records drawn from Norwegian administrative registers. The results show overall negative but heterogeneous wage effects, with larger effects on immigrant wages than on native wages and with native wages more responsive to inflows from Nordic countries than from developing countries. These patterns are consistent with natives and Nordic citizens being close substitutes, while natives and immigrants from developing countries are imperfect substitutes. Estimates are sensitive to accounting for effective immigrant experience, selective native participation, and variation in demand conditions and native labor supply.