On the fairness of random procedures

We consider procedures that use randomness to make a decision that involves several individuals. We asked subjects to compare the fairness of six pairs of seemingly equivalent procedures. We propose a classification of subjects into two categories: those who are “emotional” in the sense that they exhibit a systematic ranking of procedures on the basis of intuitive notions of fairness, and those who are “consequentialists” in the sense that they systematically view each pair of procedures as being equally fair. According to this classification, about 30% of the subjects are emotional while 31% are consequentialists.     

Flexible work arrangements,national culture,organisational characteristics,and organisational outcomes: A study across 21 countries

Using a contingency perspective, we investigated two complementary topics: (a) the influence of the GLOBE national cultural values and key organisational variables on employee use of flexible work arrangements (FWAs), and (b) the contribution of the level of congruence between cultural values and FWA use on absenteeism and turnover. The results, based on Cranfield Network on Comparative Human Resource Management—a large data set across multiple countries—supported the hypothesised effects of the cultural values on employee use of FWAs and the moderating effects of these cultural values on FWA use and organisational outcomes. Specifically, we found that national cultural values and organisational characteristics were related to outcomes via FWA use; and employees' use of FWAs had the overall effect of reducing absenteeism and turnover, but this effect was weakened when the FWAs were not consistent with cultural values. Theoretically, our results add to our knowledge and understanding of the effects of FWA use on absenteeism and turnover under different degrees of “fit” with cultural context. From a practical perspective, our results suggest that organisations should consider national cultural characteristics before implementing FWAs. A misfit between national culture and FWAs would potentially reduce employee use of FWAs and increase the likelihood of absenteeism and turnover.     

Mitigating Negative Water Quality and Quality Externalities by Joint Management of Adjacent Aquifiers

Groundwater basins are usually separated into aquifers that are hydrologically interrelated. This interrelation may take the form of water movement from one aquifer to another. When differentials in water quality exist, pumping from one of the aquifers can cause water movement that may be associated with degradation of its quality. A management policy that considers this interrelation may be preferable to an independent management of each aquifer. This paper develops a dynamic optimal control model to evaluate joint versus independent management. The optimal joint pumping management, in which two adjacent aquifers of different water qualities are interrelated, is analyzed and compared to independent aquifer pumping, and the situations where joint management is not required are identified. Policy implications are then derived and discussed. Finally, the theoretical model is applied to a case of interrelated aquifers in southern Israel. The empirical model identifies conditions (interest rate, agricultural fresh water supply rainfall recharge, price of surface water, drinking water quality standards) under which a joint policy is preferable. The empirical results confirm the theoretical ones.     

“Minding Our Business”: What the United States Government has done and can do to Ensure that U.S. Multinationals Act Responsibly in Foreign Markets

The United States Government does not mandate that US based firms follow US social and environmental law in foreign markets. However, because many developing countries do not have strong human rights, labor, and environmental laws, many multinationals have adopted voluntary corporate responsibility initiatives to self-regulate their overseas social and environmental practices. This article argues that voluntary actions, while important, are insufficient to address the magnitude of problems companies confront as they operate in developing countries where governance is often inadequate. The United States can do more to ensure that its multinationals act responsibly everywhere they operate. First, policymakers should define the social and environmental responsibilities of global companies. They must consistently make their expectations for global business clear – and underscore that this objective can often be accomplished without mandates. Second, the US should closely examine the policies that undermine global Corporate Social Responsibility (CSR) and address the many conflicting signals sent by policymakers. Third, the President should make the US government a CSR model by examining how to use its purchasing power to promote human rights. Finally, the US government should require pension funds to report on the social and environmental consequences of their investments. In these ways, Americans can mind our business – and thus make sure that US based firms do not undermine social and environmental progress when they operate in the developing world. Susan Aaronson is Senior Fellow and Director of Globalization Studies at the Kenan Institute Washington Center, an arm of the Kenan-Flagler Business School, University of North Carolina Chapel Hill. Her scholarly research focuses on international investment and social responsibility issues. Aaronson devised and directed a study, funded by the Ford, UN and Levi Strauss Foundations, that examined how U.S. public policies can promote or undermine global corporate social responsibility. She is now beginning a Levi-Strauss funded project on trade and human rights. Aaronson is a frequent speaker on public understanding of globalization issues and the author of four books on globalization including, Taking Trade to the Streets: The Lost History of Public Efforts to Shape Globalization (Michigan: 2001).     

The impact of climate change on China's agriculture

This article examines how expected changes in climate are likely to affect agriculture in China. The effects of temperature and precipitation on net crop revenues are analyzed using cross-sectional data consisting of both rainfed and irrigated farms. Based on survey data from 8,405 households across 28 provinces, the results suggest that global warming is likely to be harmful to rainfed farms but beneficial to irrigated farms. The net impacts will be only mildly harmful at first, but the damages will grow over time. The impacts also vary by region. Farms in the Southeast will only be mildly affected but farms in the Northeast and Northwest will bear the largest damages. However, the study does not capture the indirect effects on farms of possible changes in water flow, which may be important in China.     

Super‐replication in fully incomplete markets

In this work, we introduce the notion of fully incomplete markets. We prove that for these markets, the super‐replication price coincides with the model‐free super‐replication price. Namely, the knowledge of the model does not reduce the super‐replication price. We provide two families of fully incomplete models: stochastic volatility models and rough volatility models. Moreover, we give several computational examples. Our approach is purely probabilistic.     

Bundling agricultural technologies to adapt to climate change

Farmers can respond to climate change by modifying their technologies or management practices, or both. In this paper, we examine the choice of crop, irrigation, and cover as a bundled decision by a farmer. Using discrete choice analysis and a cross section of farms from Israel, we test whether these decisions are sensitive to climate and find that they are. In the case of Israel, the farmers completely substitute capital for climate. Simulating increase in temperature suggests that warming would lead Israeli farmers to shift mainly to orchards under cover and irrigation. But it is likely that bundling adaptations will provide flexibility and sustainability for future farmers in many locations under climate change conditions.     

Choosing the two finalists

This paper studies a decision maker who for each choice set selects a subset of (at most) two alternatives. We axiomatize three types of procedures: (i) The top two: the decision maker has in mind an ordering and chooses the two maximal alternatives. (ii) The two extremes: the decision maker has in mind an ordering and chooses the maximal and the minimal alternatives. (iii) The top and the top: the decision maker has in mind two orderings and he chooses the maximal element from each.