Risk-sharing networks and farsighted stability

Evidence suggests that in developing countries, agents rely on mutual insurance agreements to deal with income or expenditure shocks. This paper analyzes which risk-sharing networks can be sustained in the long run when individuals are farsighted, in the sense that they are able to forecast how other agents would react to their choice of insurance partners. In particular, we study whether the farsightedness of the agents leads to a reduction of the tension between stability and efficiency that arises when individuals are myopic. We find that for extreme values of the cost of establishing a mutual insurance agreement, myopic and farsighted agents form the same risk-sharing networks. For small costs, farsighted agents form efficient networks while myopic agents don’t.     

Downstream Competition, Foreclosure, and Vertical Integration

This paper analyzes the effect of competition among downstream firms on an upstream firm's payoff and on its incentive to integrate vertically when firms in both segments negotiate optimal contracts. We argue that as downstream competition becomes more intense, the upstream firm obtains a larger share of a smaller downstream industry profit. The upstream firm may encourage downstream competition (even excessively) in response to high downstream bargaining power. The option of vertical integration may be a barrier to entry downstream and may trigger strategic horizontal spinoffs or mergers. We extend the analysis to upstream competition.     

Spatial wage disparities: Sorting matters!

Spatial wage disparities can result from spatial differences in the skill composition of the workforce, in non-human endowments, and in local interactions. To distinguish between these explanations, we estimate a model of wage determination across local labour markets using a very large panel of French workers. We control for worker characteristics, worker fixed effects, industry fixed effects, and the characteristics of the local labour market. Our findings suggest that individual skills account for a large fraction of existing spatial wage disparities with strong evidence of spatial sorting by skills. Interaction effects are mostly driven by the local density of employment. Not controlling for worker heterogeneity leads to very biased estimates of interaction effects. Endowments only appear to play a small role.     

Is Supply's Actual Contribution to Sustainable Development Strategic and Operational?

This paper addresses the issue of how sustainable supply practices are actually used as a leverage for sustainable development (SD). In order to assess the level of sustainable supply management within an organization, the authors have reviewed the literature extensively and then developed a five‐step maturity model around five management dimensions. A qualitative exploratory approach based on two detailed case studies of organizations whose reputation for SD is recognized internationally has been used. This methodology allowed us to show (1) how sustainable supply practices could be used as a leverage for an organization's sustainable development approach and (2) that sustainable supply practices still have quite a distance to go with regards to the maturity model for sustainable supply, even in organizations that are often mentioned as leaders in the SD area. In these organizations, managers still emphasize environmental considerations, while neglecting practices that would make it possible to reach the three SD objectives simultaneously. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Communication externalities in cities

To identify communication externalities in French cities, we exploit a unique survey recording workplace communication of individual workers. Our hypothesis is that in larger and/or more educated cities, workers should communicate more. In turn, more communication should have a positive effect on wages. By estimating both an earnings and a communication equation, we find evidence of communication externalities. In larger and more educated cities, workers communicate more and in turn this has a positive effect on their wages. Depending on the estimates, we find that 13 to 22% of the effects of a more educated and larger city on wages percolate through this channel.     

INSTITUTIONS AND PERFORMANCE IN EUROPEAN LABOUR MARKETS: TAKING A FRESH LOOK AT EVIDENCE

Abstract This paper presents a selective survey of the recent literature on labour market institutions and offers new empirical EU‐based evidence on the impact of labour market reforms on employment and labour market adjustment. Although the literature traditionally treats labour market institutions as exogenous, attention shifted recently towards understanding the underlying causes of specific institutional arrangements. As a consequence, the literature highlights the great importance of an efficient policy design exploiting these interactions wisely and identifies general principles for achieving an efficient policy design at both macro and micro levels. Although empirical evidence does not show a major change in terms of intensity of labour market reform after the setting of the Economic and Monetary Union and the creation of the euro, the reforms aiming at strengthening the labour market attachment of vulnerable groups tend to have been successful both in raising their employment and increasing labour market adjustment.     

Marshallian labour market pooling: Evidence from Italy

This paper employs a unique Italian data source to take a comprehensive approach to labour market pooling. It jointly considers many different aspects of the agglomeration — labour market relationship, including turnover, learning, matching, and hold up. It also considers labour market pooling from the perspective of both workers and firms and across a range of industries. Overall, the paper finds some support for theories of labour market pooling, but the support is weak. Specifically, there is a general positive relationship of turnover to local population density, which is consistent with theories of agglomeration and uncertainty. There is also evidence of on-the-job learning that is consistent with theories of labour pooling, labour poaching, and hold up. In addition, the paper provides evidence consistent with agglomeration improving job matches. However, the labour market pooling gains that we measure are small in magnitude and seem unlikely to account for a substantial share of the agglomeration benefits accruing to Italian workers and firms.     

On a class of law invariant convex risk measures

We consider the class of law invariant convex risk measures with robust representation r_h,p(X)=sup_fò₀¹ [AV@R_s(X)f(s)-f^p(s)h(s)] ds\rho_{h,p}(X)=\sup_{f}\int_{0}^{1} [AV@R_{s}(X)f(s)-f^{p}(s)h(s)]\,ds, where 1≤p<∞ and h is a positive and strictly decreasing function. The supremum is taken over the set of all Radon–Nikodym derivatives corresponding to the set of all probability measures on (0,1] which are absolutely continuous with respect to Lebesgue measure. We provide necessary and sufficient conditions for the position X such that ρ _h,p (X) is real-valued and the supremum is attained. Using variational methods, an explicit formula for the maximizer is given. We exhibit two examples of such risk measures and compare them to the average value at risk.     

A mean/variance approach to long-term fixed-income portfolio allocation

Abstract

Long-term investments in bonds offer known returns, but with risks corresponding to defaults of the underwriters. The excess return for a risky bond is measured by the spread between the expected yield and the risk-free rate. Similarly, the risk can be expressed in the form of a default spread, measuring the difference between the yield when no default occurs and the expected yield. For zero-coupon bonds and for actual market data, the default spread is proportional to the probability of default per year. The analysis of market data shows that the yield spread scales as the square root of the default spread. This relation expresses the risk premium over the risk-free rate that the bond market offers, similarly to the risk premium for equities. With these measures for risk and return, an optimal bond allocation scheme can be built following a mean/variance utility function. Straightforward computations allow us to obtain the optimal portfolio, depending on a pre-set risk-aversion level. As for equities, the optimal portfolio is a linear combination of one risk-free bond and a risky portfolio. Using the scaling law for the default spread allows us to obtain simple expressions for the value, yield and risk of the optimal portfolio.     

Ein Objekt, das sich verweigert: Der Journalismus in der Soziologie Pierre Bourdieus

Gilles Bastin develops a critique of the concept of the »field of journalism» (»champ journalistique«) in the sociology of Pierre Bourdieu. At first, the genesis of the object under scrutiny, journalism, within Bourdieu’s sociology is introduced. Thus the continuity is made clear with which Bourdieu — from the sixties onwards — conceives of journalists as increasingly powerful agents (»opérateurs«) of »social magic« (»magie sociale«) and of processes primarily in the field of intellectuals. Bastin then analyzes the various suggestions made by different authors for describing the »field of journalism«, and he looks at the variance in using this notion, which makes the concept of the field as such very heterogeneous. In light of other conceptions borrowed from the sociology of professions, such as Everett C. Hughes’, he suggests three critical perspectives: First, Bourdieu’s concept of the field makes work »vanish«; it neglects the conditions of working and the substantial activities of journalists. Second, it leads to a disparate view of journalists’ activities as a subject for research. And thirdly, it decidedly individualizes journalists’ activities.