A Characterization of Ordinal Potential Games

This note characterizes ordinal potential games by the absence of weak improvement cycles and an order condition on the strategy space. This order condition is automatically satisfied if the strategy space is countable.Journal of Economic LiteratureClassification Number: C72.     

Job evaluation systems and pay grade structures: do they match?

Job evaluation is usually applied in an organization in order to assess the relative value of jobs on the basis of which jobs are assigned to classes of pay grades. Thus, the assumption is that job value scores match with pay grade structures, and allow adequate predictions of basic job wages or salaries in practice. The validity of this assumption is questioned in this article. Data of five job evaluation systems (number of jobs: 16,809) were used to assess the effects of three system manipulations, concerning the number of anchors per scale (characteristic), the nature and the number of scales, and the weights of scales. Total job value scores of the manipulated data and the associated pay grades were compared with the non-manipulated ('original') scores. It turned out that even when two sets of job value scores are highly correlated (around 0.99), pay grade classification agreement was always less than 90 per cent, and in many instances much less. This result has important implications for the use of job evaluation in practice: when a fine grained system of pay grades applies, total job value scores may be deficient. Implications for a better match between total job worth values and pay grade classes are discussed.     

Management Innovation and Leadership: The Moderating Role of Organizational Size

Recent research on management innovation, i.e. new managerial processes, practices, or structures that change the nature of managerial work, suggests it can be an important source of competitive advantage. In this study, we focus on management innovation at the organization level and investigate the role of leadership behaviour as a key antecedent. Due to its prominent role within organizations, top management has the ability to greatly influence management innovation. In particular, we focus on leadership behaviour and examine transformational and transactional leadership. Additionally, as contextual variables like organizational size may influence the impact of leadership, we investigate its moderating role. Findings show that both leadership behaviours contribute to management innovation. Interestingly, our study indicates that smaller, less complex, organizations benefit more from transactional leadership in realizing management innovation. On the other hand, larger organizations need to draw on transformational leaders to compensate for their complexity and allow management innovation to flourish.     

Equilibrium Selection and Consistency

In this paper we show that, for two important classes of strategic games, namely the class of mixed extensions of finite games and the class of games with compact and convex strategy spaces and continuous-concave payoff functions, equilibrium selection is incompatible with One Person Rationality, Consistency and (restricted) Non-Emptiness.     

Co-evolutionary Dynamics Within and Between Firms: From Evolution to Co-evolution

abstract The extensive selection–adaptation literature spans diverse theoretical perspectives, but is inconclusive on the role of managerial intentionality in organizational adaptation. Indeed this voluminous literature has more to say about selection and sources and causes of structural inertia than about self‐renewing organizations that might counteract such inertia. In this introductory essay, we identify four co‐evolutionary generative mechanisms (engines) – naïve selection, managed selection, hierarchical renewal and holistic renewal – which illustrate the extensive range of evolutionary paths that can take place in a population of organizations. In particular, the managed selection engine provides the foundations of the underlying principles of co‐evolving self‐renewing organizations: managing internal rates of change, optimizing self‐organization, and balancing concurrent exploration and exploitation. However, it is altogether clear that empirical co‐evolution research represents the next frontier for empirically resolving the adaptation selection debate. The essay concludes with a discussion of requirements for co‐evolutionary empirical research and introduces the empirical papers in this Special Research Symposium.     

The perspective of the SDR's position in monetary reserves on the robustness of optimal portfolio results

Summary To gain an empirical impression of the SDR's attractiveness as a reserve asset, an amended mean-variance analysis is applied to official reserves. The main amendments bear upon the choice of the numeraire and the rejection of both the capital market line and the effective yield's positive marginal utility-frequently assumed in empirical analysis. Comparison of the outcome with that recently obtained by Ben-Bassat shows a large sensitivity of optimal portfolio results for slight differences in assumptions. A second, substantial kind of sensitivity of an asset's position in a portfolio appears to ensue from the influence of other competing functions of reserves.The authors are Professor and Assistant Professor of International Economics, University of Amsterdam, The Netherlands. The research of the second author was financially supported by the Netherlands organization for the advancement of pure research (Z.W.O.), no. 46-108. This research is part of the project Exchange-rate and monetary policy in international dependence. The paper was presented earlier at the conference Research in international finance, Jouyen-Josas, France (June 19 and 20, 1986). Computational assistance by Jeannette Capel, Reiner Gratama, and Martin O. Nijkamp and comments by an anonymous referee are gratefully acknowledged.     

RICARDO'S THEOREMS ON RELATIVE PRICES A NOTE ON PROF. MORISHIMA

It is argued that Prof. Morishima's treatment of Ricardo's theorems concerning relative price movements following changes in income distribution cannot count as a reasonable interpretation of Ricardo. Firstly, Ricardo linked up these price movements not only to diverging capital intensities, but also to diverging depreciation rates. Secondly, Prof. Morishima's proof seems to depend on a technology specification which is also characteristic of Sraffa's nonbasic commodity. A more reasonable interpretation seems to be that Ricardo tried to investigate a number of modifications on the ‘principle’ that relative prices are regulated by labour values. It is shown that Ricardo's theorems were, as first approximations, not at all bad.