Manipulation in Conditional Decision Markets

Conditional decision markets concurrently predict the future and decide on it. These markets price the impact of decisions, conditional on them being executed. After the markets close, a principal decides which decisions are executed based on the prices in the markets. As some decisions are not executed, the respective outcome cannot be observed, and the markets predicting the impact of non-executed decisions are void. This allows ex-post costless manipulation of such markets. We conduct two versions of an online experiment to explore scenarios in which a principal runs conditional decision markets to inform her choice among a set of a risky alternatives. We find that the level of manipulation depends on the simplicity of the market setting. When a trader is alone, has the power to move prices far enough, and the decision is deterministically tied to market prices or a very high correlation between prices and decision is implied, only then manipulation occurs. As soon as another trader is present to add risk to manipulation, manipulation is eliminated. Our results contrast theoretical work on conditional decision markets in two ways: First, our results suggest that manipulation may not be as meaningful an issue. Second, probabilistic decision rules are used to add risk to manipulation; when manipulation is not a meaningful issue, deterministic decisions provide the better decision with less noise. To the best of our knowledge, this is the first experimental analysis isolating the effects of the conditional nature of decision markets.     

Let’s Talk Rights: Messages for the Just Corporation–Transforming the Economy Through the Language of Rights

Neoliberal globalization has not yielded the results it promised; global inequality has risen, poverty and hunger are still prevailing in large parts of this world. If this devastating situation shall be improved, economists must talk less about economic growth and more about people’s rights. The use of the language of rights will be key for making the economy work more in favor of the least advantaged in this world. Not only will it provide us with the vocabulary necessary to reframe such pressing global problems and to find adequate economic solutions; it will also deliver the basis for deriving according duties and duty-bearers – the language of rights is congruent with the language of justice and as such it is inevitably and at the same time the language of obligations. The language of obligations exposes the multinational corporation as one of the main agents of justice in the global economy. Taking distributive justice as a starting point for reflection, a consistent derivation of the multinational’s moral obligations must focus on capabilities rather than on causality. This will lead to a shift from merely passive to active duties and accordingly to a stronger emphasis on the corporation’s contribution to the realization of positive rights. Biography: Florian Wettstein is an assistant professor in the Department of Ethics and Business Law at University of St.␣Thomas. Before that, he taught in the Business and Society Program at York University (Toronto). Also, he was a research associate at the Institute for Business Ethics at the University St. of Gallen (Switzerland), a visiting scholar at Carroll School of Management at Boston College, and a research fellow in the Program on Human Rights and Justice at Massachusetts Institute of Technology (MIT).     

“Why Should We Care about Marriage Equality?”: Political Advocacy as a Part of Corporate Responsibility

Earlier evidence predominantly supports that women are more ethical than men. With the replication of such a hypothesis for testing, this study further examined whether feminine gender roles are a better predictor of ethical attitudes, ethical behaviors, and corporate responsibility values than the biological sex. Four hundred ten management students from two technical institutes in eastern India participated in this study. Along with the socio-demographic variables in the questionnaire, inventories were used to assess gender roles, ethical attitudes, ethical behaviors, and corporate responsibility values. The inventories had acceptable reliability and validity. The results suggested that when the confounding effects of age, caste, and rural/urban origin are controlled, women manifest higher corporate responsibility values than men, but they embody similar ethical attitudes and ethical behaviors as men. Furthermore, the feminine roles of the participants were found to be more consistent, potent, and direct predictors of ethical attitudes, ethical behaviors, and corporate responsibility values than the biological sex. Hence, individuals with feminine roles may be better suited for ethical responsibilities.     

The Role of Prior Entrepreneurial Exposure in the Entrepreneurial Process: A Review and Future Research Implications

Despite considerable research, the current state regarding how and in which context prior entrepreneurial exposure impacts the entrepreneurial process is unclear. The present paper's goal is to systemize and discuss extant quantitative‐empirical research on the role of prior entrepreneurial exposure in the entrepreneurial process to clarify the current state, identify research gaps, and offer future research directions. Results from the systematic literature review of 69 quantitative‐empirical journal articles suggest that prior findings are ambiguous and theoretical shortcomings exist. We contribute to the literature by clarifying the current state and by offering directions for entrepreneurship research and practitioners promoting entrepreneurial activity.     

Human resource management standardisation and adaptation in franchises

Franchising is synonymous with standardisation and control, to achieve system-wide efficiencies and consistency in the brand image. Scholarly literature on human resource management (HRM) in this context has, to date, been relatively one-dimensional, discussing standardisation of HRM from the franchisor’s perspective with insufficient consideration of the role and experiences of franchisees. This article seeks to extend the concept of core and peripheral franchising components to HRM activities, presenting findings from a three-case study of Australian coffee franchises. The findings suggest reframing HRM in franchises as two separate but potentially overlapping systems managed by franchisor and franchisee, with core and peripheral elements that may or may not align. Subsequent outcomes of misalignment for the franchise relationship are considered, and resulting franchisee HRM behaviours are illustrated in a Franchisee HRM Response Matrix.     

SME foreign market entry mode choice and foreign venture performance: The moderating effect of international experience and product adaptation

Firms’ foreign market entry mode choice attracts considerable research attention. However, the performance implications of this choice remain inconclusive, particularly in the context of small and medium-sized enterprises (SMEs). The present paper draws on the resource-based view (RBV) and develops a theoretical model specifically tailored to the context of SMEs in order to study the relationship between entry mode choice and foreign venture performance. Testing hypotheses on 133 German SMEs, we show that international experience as a resource and product adaptation as a capability improve the performance of non-equity entry modes by mitigating liabilities of smallness inherent to SMEs. We furthermore find empirical support for the joint moderating effect of international experience and product adaptation on the focal relation. Our findings contribute to the SME foreign market entry mode literature and have implications for practitioners and future research.     

A common backstop to the Single Resolution Fund

During the establishment of the Banking Union it has been agreed to develop a common backstop to the Single Resolution Fund. The following key principles constitute the point of departure of this paper:

1. Fiscal neutrality in the medium term;

2. Instrument of last resort;

3. Equivalent treatment across all Member States in the Banking Union; and

4. No costs for non-Banking Union Member States.

For each aspect the legal and regulatory background as well as the economic implications are provided. They significantly influence the common backstop’s final design and the choice of an adequate provider for the steady state.     

Organizational transition management of circular business model innovations

Scholars and practitioners across fields increasingly recognize that business models for the circular economy may be an effective lever for solving ecological persistent problems such as climate change, biodiversity loss, and growing natural resource scarcity. Despite a growing interest in the potential of circular business models, interconnections between the organizational dimensions of firms and their business model innovation processes remain underexplored. Based on problem‐centered expert interviews with business consultants experienced in circular business development, this study creates a conceptual model that offers structured knowledge about why firms steadily reproduce linear BMs and how incumbents manifest themselves as a constant linear‐oriented value creation system. The model also demonstrates organizational conditions and management strategies that frustrate the reproduction of linear BMs and, thus, enable initial moves towards CBM innovation. Building on this, the article provides a set of propositions on how an organizational transition management may be configured and what incumbents require to successfully navigate circular business model innovation. The findings provide a foundation for a contemporary understanding of circular business model transition management, which simultaneously serve as impulses for future research investigations.     

Sustainable entrepreneurship,innovation, and business models: Integrative framework and propositions for future research

This article introduces the business models for sustainability innovation (BMfSI) framework to study how business models mediate between sustainability innovations and business cases for sustainability. The BMfSI framework integrates two major perspectives (implicitly) found in the sustainable business model literature. The first is the agency perspective. It takes into consideration that some form of agency is needed, that is, “someone” who takes decisions and acts. Sustainable entrepreneurs are discussed as those agents who align their new or existing business models with sustainability innovations in order to be successful in business and to create value with and for stakeholders. The second perspective is the systems perspective, which acknowledges that business models are always embedded within sociotechnical contexts through which, for example, public policies, private financing, or stakeholder interests influence whether and how business models can be developed. The agency and systems perspectives are integrated in the so‐called business model mediation space. This theoretical notion embraces the decisions and activities pursued by sustainable entrepreneurs as they align their business models with sustainability innovations on the one hand and the influence of environmental contingencies, barriers, and stakeholders from the sociotechnical context on the other hand. The paper concludes with propositions for future research derived from the BMfSI framework.     

Unlikely allies: Bureaucracy as a cultural trope in a grassroots volunteer organization

This article investigates the role of bureaucratic organizing in a grassroots volunteer organization, which emerged during the so-called refugee crisis in an emergency refugee shelter in Germany. Most research agrees that this type of organization is by definition counter-bureaucratic. In the organization I studied, however, volunteers adopted, accepted and acclaimed bureaucratic organizing as the only, natural and self-evident way of making the grassroots work. Drawing on ethnographic research, my analysis unravels how bureaucracy became a common frame of reference that allowed the volunteers to self-organize despite their different motivations, attitudes and social backgrounds. To theorize these findings, the paper draws on the concept of a cultural trope. In so doing, it offers a more nuanced understanding of bureaucracy in grassroots volunteer organizations that might stimulate scholars to rethink its role in other fluid, dynamic and value-driven organizations.