The Formateurs’ Role in Government Formation

Following an election, Heads of State typically choose a formateur to report back a prospective government by some deadline. If this formateur fails then another party leader is chosen on the same terms. We model this mechanism as a bargaining game, in which a single party leader has exclusive access to the Head of State, but does not have a monopoly on making proposals. We characterize the unique equilibrium of the game in which all parties are symmetric and parties split a fixed-size pie. We also show that supra-minimal governments may form when parties are asymmetrically sized: a result consistent with the evidence on government formation in countries which use a formateur mechanism. We are grateful to Maria Montero, Rick Thomas and Paul Warwick for valuable conversations, and to seminar participants in UBC and Warwick.     

Scoring rules: an alternative parameterization

This note presents an alternative parameterization of any scoring rule that satisfies the score-expansion property. This parameterization is based on the vector that specifies, for every number of alternatives k, k ≥ 3, the minimal size of a coalition that can veto an alternative which is preferred by everybody outside the coalition. Our result sheds new light on the commonly used plurality and Borda rules, as well as the inverse plurality rule and any “vote for t alternatives rule”.     

Similarities and differences when building trust: the role of cultures

We run an experiment in which students of different European nationalities are matched in groups of five and repeatedly choose with whom within their group they want to play a trust game. Participants observe of each other age, gender, nationality and number of siblings. The region of origin, “North” or “South” is a major determinant of success in the experiment. Participants tend to trust those they trusted before and who trusted them. We do not find evidence of regional discrimination per se. It is only the underlying and significant differences in behavior that translate through repeated interactions into differences in payoffs between the two regions.     

Institutional logics and innovation in times of crisis: Telemedicine as digital ‘PPE’

How do crises shape digital innovation? In this paper we examine the rapid adoption of digital telemedicine technologies in an Israeli hospital with a focus on the role of the institutional logics held by the stakeholders responding to emerging events. With the onset of COVID-19, the need for social distancing and minimal physical contact challenged and interrupted hospital practices. In response, remote audio-visual functionality of digital technologies were appropriated in different ways, as stakeholders – state actors, managers, health professionals, and family members – sought to improvise and enhance the protection of persons concerned. We show how emerging practices were guided by the dominant institutional logics of stakeholders responding to the crisis. Acting for many as a digital form of ‘personal protective equipment’ (PPE), the technologies enabled diverse action possibilities to become manifest in practices. We add to understanding the role of institutional logics in directing the attention of stakeholders to shape digital innovation in times of crisis.     

An Evaluation of the Determinants and Implications of Panel Attrition in the National Income Dynamics Survey (2008‐2010)

Panel surveys offer a valuable tool for researchers to explore the dynamics underlying individual and household behaviours. The Achilles heel of panel data is attrition. This paper examines the determinants and implications of attrition in the first two waves of South Africa's National Income Dynamics Survey. Multivariate tests in labour market and health specifications show that there is some moderate evidence of attrition bias in estimated coefficients based on the non‐attriting sample. This bias can be seen in labour market specifications, in particular for men, and for Africans, and to a much lesser degree in health specifications, in particular for small samples of Whites. Researchers should take care when using the panel data set to generalise to the overall population.     

Don’t fear risk,learn about it: how familiarity reduces perceived risk

This article suggests that learning about basic concepts concerning the risk and return of assets will reduce perceived risk. We show experimentally that people who learn about these basic concepts are willing to allocate more money to risky assets and consider the asset’s return relative to its risk.     

Fragility of information cascades: an experimental study using elicited beliefs

This paper examines the occurrence and fragility of information cascades in two laboratory experiments. One group of low informed participants sequentially guess which of two states has been randomly chosen. In a matched pairs design, another group of high informed participants make similar guesses after having observed the guesses of the low informed participants. In the second experiment, participants’ beliefs about the chosen state are elicited. In equilibrium, low informed players who observe an established pattern of identical guesses herd without regard to their private information whereas high informed players always guess according to their private information. Equilibrium behavior implies that information cascades emerge in the group of low informed participants, the belief based solely on cascade guesses is stationary, and information cascades are systematically broken by high informed participants endowed with private information contradicting the cascade guesses. Experimental results show that the behavior of low informed participants is qualitatively in line with the equilibrium prediction. Information cascades often emerge in our experiments. The tendency of low informed participants to engage in cascade behavior increases with the number of identical guesses. Our main finding is that information cascades are not fragile. The behavior of high informed participants differs markedly from the equilibrium prediction. Only one-third of laboratory cascades are broken by high informed participants endowed with private information contradicting the cascade guesses. The relative frequency of cascade breaks is 15% for the situations where five or more identical guesses are observed. Participants’ elicited beliefs are strongly consistent with their own behavior and show that, unlike in equilibrium, the more cascade guesses participants observe the more they believe in the state favored by those guesses.     

Religious institutions and entrepreneurship

This article focuses on the impact of religious institutions on entrepreneurship. We find clear evidence that different religious institutions have a significantly different impact on the tendency to become an entrepreneur. Our article makes important contributions to the research of both religion and entrepreneurship. First, it proposes empirical evidence in which the country’s main religion significantly affects its level of entrepreneurship at the macro level. Second, it adds to our theoretical understanding of the mechanisms that characterize the effects of religion on entrepreneurship. We suggest that macro effects of religion as part of the country’s culture and institutions affect the country’s level of entrepreneurship beyond the direct effects of religion on the behavior of the religion’s members in the society.     

Clicks and Mortar: The Effect of On-line Activities on Off-line Sales

Retailers did not immediately extend their business to the Internet environment, fearing that on-line activities could adversely impact their off-line sales. To facilitate assessment of the impact of on-line activities on off-line sales, we develop a method that allows retailers to use readily available market data for making informed decisions. The proposed method determines (1) the extent to which on-line sales cannibalize off-line sales, and (2) whether on-line activities build on-line equity for the firm. We illustrate the method using data from Tower Records' Internet sales division. We find that on-line sales do not significantly cannibalize retail sales and that the firm's web activities build long-term on-line equity. While the proposed method can be used by any clicks-and-mortar firm, our firm-specific results indicate that Towers' fears regarding cannibalization due to its own Internet activities were unfounded.