Top management's social capital and learning in new product development and its interaction with external uncertainties

This paper examines the effect of the elements of top management's social capital on exploratory and exploitative learning and on the outcomes of new product development (NPD), as well as the interaction effects of these elements with external uncertainties. In so doing, the study follows prior research that calls for a fine-grained analysis of how top management's social capital can positively affect NPD outcomes. Large-scale survey data (675 firms) from the United States, Germany, and Australia are used to develop and empirically validate a theoretical framework. As hypothesized, elements of top management's social capital have positive, but not identical, effects on exploitative and exploratory learning. In addition, the effects of structural social capital on learning, as well as the effects of learning on NPD outcomes, are significantly moderated by the interplay of technology uncertainty and demand uncertainty. The research concludes with implications for theory and practice.     

Ghostbusting: which output gap really matters?

Reflecting domestic demand pressures, the output gap has important implications for economic analysis. This paper assesses the usefulness of four commonly-used gap measures for a small set of European countries. The main results are that the policy implications can be very different depending on the gap measure and that, consequently, care should be exercised when employing any such measure. Moreover the paper investigates in a simple inflation forecasting framework the common assertion that the output gap could improve the forecasting accuracy. For annual observations, however, these measures rarely provide useful information and there is no single best measure across countries.     

Stationary equilibria in bargaining with externalities

This paper studies infinite-horizon bargaining between a seller and multiple buyers when externalities are present. We extend the analysis in Jehiel and Moldovanu by allowing for both pure and mixed equilibria [Jehiel, P., Moldovanu, B., 1995a. Cyclical delay in bargaining with externalities. Rev. Econ. Stud. 62, 619–637]. A characterization of the stationary subgame perfect equilibria in generic games is presented. Equilibria with delay exist only for strong positive externalities. Since each buyer receives a positive payoff when the seller makes an agreement with some other buyer, positive externalities induce a war of attrition between buyers.     

Customer issues related to limited air connectivity

Air access can be crucial for regional economic development, especially when global industries are involved. However, air traffic generates negative impacts, such as noise and air pollution that can lead to politically motivated calls to reduce air traffic. This paper investigates customer issues and potential responses of frequent flyers to non-market-driven limitations on air transport. Based on a survey conducted at Zurich International Airport we show that frequent air travelers tend to be more senior and to work in industries that involve travel outside of the worker's country of origin. Consequently, they are more critical of potential restrictions on air travel.     

The inefficiency of price quantity bargaining

In bargaining between a buyer and several sellers on prices and quantities, strategic inefficiencies arise. By reallocating quantities between agreements, the buyer can increase its share of the surplus. With two symmetric sellers producing substitutes, the quantity in the first agreement will be higher than the efficient quantity, and the quantity in the last lower, thus implying that sellers are strategically discriminated. When asymmetries are not too large and sellers produce substitutes, the buyer first agrees with the seller with the lowest marginal cost and only the most efficient order of agreement is an equilibrium outcome. When goods are complements, both equilibrium quantities are lower than the efficient levels.     

UNEMPLOYMENT,HUMAN CAPITAL DEPRECIATION,AND UNEMPLOYMENT INSURANCE POLICY

This paper presents a structural estimation of a life cycle model with unemployment risk. The model allows for human capital depreciation during unemployment. It is estimated using German and US household‐level data. The data suggest that the adverse impact of unemployment on individual productivity is important in both countries, but quantitatively more relevant in Germany. Moreover, simulations show that the combination of skill depreciation with the generous unemployment insurance system that was in place in Germany until recently is a key factor in explaining the differences in labour market performance between these countries. Copyright © 2012 John Wiley & Sons, Ltd.     

Incumbents’ defense strategies: a comparison of deterrence and shakeout strategy based on evolutionary game theory

This paper addresses the question of how an established firm can successfully defend its market against current and future competitors. Previous studies on this issue are surprisingly scarce and typically concentrate on only a single generic defense strategy. Thus, little is known about the degree and the manner in which different generic defense strategies, such as a deterrence strategy (pursued before competitor market entry) and a shakeout strategy (pursued after competitor market entry), differ in effectiveness and efficiency and about the corresponding role of product and market conditions. As these strategies tend to be costly, an established firm must decide which of these strategies to focus its scarce resources on. Drawing on evolutionary game theory and an empirical calibration and validation study, this paper seeks to fill these research gaps. While both strategies turn out to be viable options for market defense, the authors find that in general, a shakeout strategy tends to be superior to a deterrence strategy. However, the authors also identify product and market conditions under which an established firm is better off focusing on a deterrence strategy. In methodological respects, the paper contributes to the marketing discipline by introducing evolutionary game theory, which has not been used previously for analyzing marketing issues, as well as an evolutionary approach to research on market defense.     

Is local bias a cross-border phenomenon? Evidence from individual investors’ international asset allocation

Extant literature consistently documents that investors tilt their domestic equity portfolios towards regionally close stocks (local bias). We hypothesize that individual investors’ local bias is not limited to the domestic sphere but instead also determines their international investment decisions. Our results confirm the presence of a cross-border local bias. Specifically, we show (i) that the stockholdings of individual investors living within regional proximity to a foreign country display a significantly lower foreign investment bias towards investment opportunities in that country and (ii) that this drop in foreign investment bias levels is disproportionately driven by investments in regionally close neighbor-country companies. The impact of cross-border local bias on investors’ bilateral foreign equity investments is economically significant and holds even after controlling for previously identified explanations of international asset allocation.