COMPETITIVE MARKET BEHAVIOR: CONVERGENCE AND ASYMMETRY IN THE EXPERIMENTAL DOUBLE AUCTION

We conducted a large number of controlled continuous double auction experiments to reproduce and stress-test the phenomenon of convergence to competitive equilibrium under private information with decentralized trading feedback. Our main finding is that across a total of 104 markets (involving over 1,700 subjects), convergence occurs after a handful of trading periods. Initially, however, there is an inherent asymmetry that favors buyers, typically resulting in prices below equilibrium levels. Analysis of over 80,000 observations of individual bids and asks helps identify empirical ingredients contributing to the observed phenomena including higher levels of aggressiveness initially among buyers than sellers.     

Innovation and productivity in agricultural firms: evidence from a country-wide farm-level innovation survey

ABSTRACT

The literature on the links between innovation and productivity at the firm level in agriculture is almost nonexistent. In this paper, we analyze the factors behind the innovation effort of farms and the impact that innovation effort has on farm’s productivity, exploiting a unique farm-level agricultural innovation survey carried out in Uruguay. The results indicate that farm size, cooperation with other agents to perform R&D, the education of the owner of the farm, the participation of foreign capital and the existence of links with other organizations, in particular scientific, horizontal and vertical ones, are positively correlated with innovation effort. Public and private financial support are not clearly linked with innovation effort. The innovation effort has a positive effect on farm’s productivity. Some heterogeneities across industries in agriculture are found.     

Semi-parametric estimation of American option prices

We introduce a novel semi-parametric estimator of American option prices in discrete time. The specification is based on a parameterized stochastic discount factor and is nonparametric w.r.t. the historical dynamics of the Markovian state variables. The historical transition density estimator minimizes a distance built on the Kullback–Leibler divergence from a kernel transition density, subject to the no-arbitrage restrictions for a non-defaultable bond, the underlying asset and some American option prices. We use dynamic programming to make explicit the nonlinear restrictions on the Euclidean and functional parameters coming from option data. We study asymptotic and finite sample properties of the estimators.     

Export activity,persistence and mark-ups

This article addresses the differences in margins across exporting and nonexporting firms. We jointly estimate a translog cost function, a variable factor share equation and price-cost margin equations to analyse the effect of persistence in export activity on margins. Results indicate that nonexporters have smaller margins than persistent exporters and firms that entered foreign markets during the nineties. However, larger export ratio is negatively associated with margins for persistent exporters. It suggests that efficiency advantages for exporters are partially compensated by higher competitive pressure in international markets. These results are in accordance with the predictions of Melitz and Ottaviano (2005 Melitz, MJ and Ottaviano, GIP. 2005. Market size trade, and productivity, NBER Working Paper Series No. 11393 (forthcoming in The Review of Economic Studies) [Google Scholar]).     

Estimating dynamic demand for airlines

This paper uses an original panel dataset with posted prices and sales to estimate a dynamic demand. We find that consumers become more price sensitive as time to departure nears which is consistent with having lower valuations. This result provides empirical support to a key theoretical implication in Deneckere and Peck (2012)—high-valuation consumers purchase earlier. We also find that the number of active consumers increases closer to departure.     

Green consumers and their identities: how identities change the motivation for green consumption

This research aims to fill the gap in green consumption literature from the perspective of values as types of intentions and identity‐based motivation. In two studies, we examine how the salience of personal and social identities can change the relationship between types of intentions and green consumption. The results demonstrate that when personal identity is salient, self‐transcendence intentions influence green consumption more than self‐enhancement intentions. This is because personal identity (compared with social identity) increases the positive effect of congruent intentions (self‐transcendence) on green consumption. However, when social identity is salient, self‐transcendence and self‐enhancement intentions have a similar impact on green consumption. This is because social identity (compared with personal identity) reduces the negative effect of self‐enhancement intentions on green consumption. Finally, we discuss theoretical and managerial implications for values as types of intentions, identity‐based motivation and green consumption.     

Environmental Protection in Environmentally Reactive Firms: Lessons from Corporate Argentina

We propose a model of planned corporate environmental behaviour that emphasises the values and attitudes of managers towards the environment, environmental intentions and the context in which these intentions are formed and translated into actual performance. In particular, we focus on the extent to which environmentally reactive (as oppose to pro-active) managers influence the environmental performance of their firms. We identify the factors that mitigate or accentuate the effects of environmental “reactivism”—i.e. a mind-set shared by those who assign to the state the responsibility of protecting the environment. We generate a series of hypotheses and use structural equation modelling to test them in the context of a unique dataset of Argentinean firms. Our system’s approach to corporate environmental behaviour explains approximatively 70 % of the variation in reported environmental performance across firms while highlighting elements of the model that may potentially be influenced by policy. Amongst other things, our empirical results suggest that stakeholder pressures can be an effective tool in the development of pro-environmental attitudes (and environmental intentions in the case of small firms) and in so doing offset some of the negative effects of environmental reactivism on environmental performance. Our paper highlights a number of other important implications for the design and implementation of environmental policies that account for human managerial determinants of corporate behaviour and social factors.     

Factors enhancing the choice of higher resource commitment entry modes in international new ventures

The choice of entry mode in foreign markets is an important strategic decision with major consequences for the success of international new ventures (INVs). It is generally accepted that these firms choose relatively low-resource commitment entry modes to operate in foreign markets. Nevertheless, some researchers have suggested that higher resource commitment entry modes in foreign markets also seem to be competitive strategies for INVs. In this study, from a marketing/international entrepreneurship interface perspective and focusing on organizational issues, we center our attention on international market orientation as a neglected yet important factor in INVs’ choice of higher resource commitment entry modes in foreign markets. We suggest that an entrepreneurial orientation and the timing of international entry are important correlates to an international market orientation. We also suggest that the international learning effort of INVs through their international market orientation has a direct, positive impact on the resources these companies commit to their foreign markets through the use of higher resource commitment entry modes. Accordingly, the model proposes a positive effect of entrepreneurial orientation and early international entry on international market orientation which, in turn, is positively related to higher resource commitment entry modes. The hypotheses were tested on country-level data from Spain, using a structural equation model to analyze relationships between the latent variables.This study extends previous international entrepreneurship research, including insights on antecedents of international new ventures’ choice of resource commitment entry modes in foreign markets. The paper also goes further than previous international entrepreneurship research, by addressing the strategic consequences of rapid entry into foreign markets. Additionally, the results of this work encourage international entrepreneurs to look beyond the explicit value of experiential market knowledge to realize the potential value of international market orientation as an antecedent to higher resource commitment entry modes.