Employee emotions during organizational change—Towards a new research agenda

In this research note, we address the role of employee emotions during organizational change processes. While prior studies have examined emotions during a single change, such research analyzes emotions and change as snapshot events. In addition, we lack sufficient knowledge of the role of employee emotions during repeated changes, despite the evidence that organizations increasingly need to adapt to dynamic environments. We address these shortcomings and offer a research agenda on emotions during change, which incorporates the so far neglected view of emotions as processes that unfold during and across organizational changes. Specifically, we illustrate the role of employee emotions during sequential and simultaneous changes and offer six suggestions for future research on emotions in such contexts.     

Optimal forecasts in the presence of structural breaks

This paper considers the problem of forecasting under continuous and discrete structural breaks and proposes weighting observations to obtain optimal forecasts in the MSFE sense. We derive optimal weights for one step ahead forecasts. Under continuous breaks, our approach largely recovers exponential smoothing weights. Under discrete breaks, we provide analytical expressions for optimal weights in models with a single regressor, and asymptotically valid weights for models with more than one regressor. It is shown that in these cases the optimal weight is the same across observations within a given regime and differs only across regimes. In practice, where information on structural breaks is uncertain, a forecasting procedure based on robust optimal weights is proposed. The relative performance of our proposed approach is investigated using Monte Carlo experiments and an empirical application to forecasting real GDP using the yield curve across nine industrial economies.     

An Illuminating Exchange The Construction of Social Reality

A BSTRACT . In his The Construction of Social Reality , Searle presents an account of rights, responsibilities, obligations, duties, and similar entities in terms of the formula X counts as Y in context C , where " X " refers in the simplest case to some physical object or event and " Y " to the result of imposing upon X some deontic power or function. Smith attempts to show the limitations of this formula, focusing especially on the examples of contested property rights (where C is not uniquely defined), and of money in bank accounts and other phenomena (where no physical X -term is available). Searle responds to these criticisms, above all by pointing to the fact that some of the problems Smith raises are to be addressed not by an ontological analysis of social reality but rather through legal or political means.     

Prizes and patents: Using market signals to provide incentives for innovations

We consider environments in which agents other than innovator receive the signals about the quality of innovation. We study whether mechanisms can be found which exploit market information to provide appropriate incentives for innovation. If such mechanisms are used, the innovator has incentives to manipulate market signals. We show that if an innovator cannot manipulate market signals, then the efficient levels of innovation can be uniquely implemented without deadweight losses – for example, by using prizes. Patents are necessary if the innovator can manipulate market signals. For an intermediate case of costly signal manipulation, both patents and prizes may be optimal.     

Benchmark-based evaluation of portfolio performance: a characterization

Benchmarking is a universal practice in portfolio management and is well-studied in the optimal portfolio selection literature. This paper derives axiomatic foundations of the relative return, which underlies a benchmark-based evaluation of portfolio performance. We show that the existence of a benchmark naturally arises from a few basic axioms and is tightly linked to the economic theory. Our method relies on the use of both axiomatic and economic approaches to index number theory. We also analyze the problem of optimal portfolio selection under complete uncertainty about a future price system, where the objective function is the relative return.     

Seasonal Homes and the Local Property Tax: Evidence from New York State

This study examines the growth of seasonal (i.e., second or vacation) homes and their impact on local property tax rates using evidence from towns and villages in New York State between 1990 and 2000. We find that a greater concentration of seasonal homes in a municipality is associated with a lower effective property tax rate in towns, and a higher rate in small and rural villages. An alternative measure of tax burden, property taxes as a percentage of median household income, is not related to the presence of seasonal homes in towns but is positively related in small and rural villages. Our findings for towns contradict the findings of an earlier study by Fritz (1982 ) that found that an increase in town property allocated to vacation homes was significantly associated with an increasing property tax rate, although our findings for villages supports his findings.     

Shaanxi Impressions

Ancient, but longing to be modern
In most people＇s eyes, Xi＇an, the capital of Shaanxi, a province in western China, is an alias for ＂Ancient China＂, which is also what Patricia from Arizona, U.S., who was sitting next to me on my Xi＇an flight thought as well. ＂My husband and I managed to spend one precious day there in our busy China trip schedule, just to have a look at the great Terra Cotta Warriors,＂ Patricia＇s eyes were glimmering as we set off flying towards history. The Terra Cotta Warriors are the masterpiece of the First Qin Emperor, whose dynasty dates back to BC 221 - BC 207. Actually, I would prefer to refer to the city as ＂Chang＇an＂, which used to be the city＇s name in the Tang dynasty （AD 618 - 907） when it served as China＇s capital during the most prosperous period in ancient Chinese history.     

Larry Moss and the Struggle Against Racism by the Whately Professors of Political Economy

In this note, we highlight an important consideration of Larry Moss's life's work, the continual struggle within economics against racism. Larry initiated and supported the symposium on eugenics published by the American Journal of Economics and Sociology in July 2005. He edited the volume Social Inequality, Analytical Egalitarianism and the March Toward Eugenic Explanations in the Social Sciences in August 2008. These constitute obvious signs of Larry's concern.
He conjectured that the Trinity College Dublin political economists who held the Whately professorship should be thought of as a school. Such a school was in fact identified in 1850 by an outsider who pointed to their shared opposition to racial explanations within an institutional setting. That shared opposition allowed them to speak against the narrow interests of the rulers of the country. Of course, other political economists of the time, Mill in particular, were also emphatic in their anti-racism. Thus, not only do we need to take up Larry's challenge to describe the Trinity College school but we must also seek its connections with the Scottish-English group of anti-racists.     

Evolutionary selection of expectations in positive and negative feedback markets

An economic environment is a feedback system, where the dynamics of aggregate variables depend on individual expectations and vice versa. The type of feedback mechanism is crucial for the aggregate outcome. Experiments with human subjects (Heemeijer et al., J Econ Dyn Control 33:1052–1072, 2009) have shown that price converges to the fundamental level in a negative feedback environment but fails to do so under positive feedback. We present an explanation of these experimental results by means of a model of evolutionary switching between heuristics. Active heuristics are chosen endogenously, on the basis of their past performance. Under negative feedback an adaptive heuristic dominates explaining fast price convergence, whereas under positive feedback a trend-following heuristic dominates resulting in persistent price deviations and oscillations.