Dynamic pricing and asymmetries in retail gasoline markets: What can they tell us about price stickiness?

Theoretical explanations for price stickiness used in businesses cycle models are diverse (e.g., information processing delays, rational inattention and fair pricing), with each theory resulting in a different implication for inflation dynamics. Using an autoregressive conditional binomial model and a data set consisting of daily observations of price and cost for 15 Philadelphia retail gasoline stations, we test which of these theories is most consistent with the observed pattern of price adjustment. Our findings of time dependence, asymmetry and the role of cost volatility are consistent with a combination of fairness considerations and rational inattention by producers.     

Mandatory Retirement Rules and the Retirement Decisions of University Professors in Canada

We examine the impact of mandatory retirement on the retirement decisions of professors in Canada using administrative data. Estimation of a discrete time hazard model indicates that faculty members at universities with mandatory retirement at age 65 have exit rates at age 65 that are around 30 to 38 percentage points higher than those of their counterparts at universities without mandatory retirement. This overall difference in exit rates is found when the sample is restricted by discipline, professional rank and type of university. Similar results are found for both men and women; however, the magnitude of this effect is somewhat smaller for women. Restricting the analysis to include faculty members who received their highest degree at age 34 or older does not affect the magnitude of the difference in exit rates between faculty at universities without mandatory retirement and those at universities with mandatory retirement. The estimated survival probabilities indicate that only 22.7% of faculty members employed at age 64 at universities without mandatory retirement will continue to be employed at the same university at age 72.     

The Efficiency of Direct Public Involvement in Environmental Policymaking: An Experimental Test

In collaborative negotiation, stakeholder representatives are charged with the development of a mutually acceptable set of public policies. Although this approach has become popular in environmental negotiations, little is known about the characteristics of the outcomes that are reached. In this paper, we employ an Edgeworth box framework to investigate the nature of bargaining over public goods (environmental policies) that have multiple attributes. We then design and conduct laboratory experiments within this framework to test whether negotiated outcomes satisfy standard axiomatic bargaining predictions under a variety of conditions. Specifically, we test whether two parties with Pareto inefficient endowments of two goods will trade to Pareto improving and Pareto efficient outcomes, and to the Nash bargain in particular. We vary whether the Nash bargain coincides with or diverges from the outcome that maximizes the joint payoff, or the outcome that equalizes payoffs, and whether subjects are provided full or partial information. We find that bargainers reach Pareto improving and efficient outcomes across treatments, but withdraw support for the Nash bargain when it generates unequal payments or when payoff information is private. We conclude that this experimental framework offers a promising method for studying multi-attribute negotiations.     

Modelling gold futures: should the level of speculation inform our choice of variables?

Prior literature provides conflicting evidence about the impact of speculation on gold futures returns, volatility, and the relationship between market fundamentals and prices. In this paper, we exploit trade volume information to determine the most appropriate family of factors to adopt when modelling gold futures. Using the Disaggregated Commitment of Traders report, we find that extreme levels of speculation are informative in that they signify a shift in the relative modelling accuracy of macroeconomic and latent factors. A simple composite prediction framework, incorporating the changing level of speculation, empirically demonstrates the uncovered phenomenon and offers improved predictive accuracy for gold futures prices. Furthermore, our findings are shown to be robust to alternative latent and macroeconomic model specifications.     

Goodbye Germany! The influence of personality and cognitive factors on the intention to work abroad

The demand for internationally mobile employees is increasing with globalization. Being able to assess an employee's intention to work abroad already at the stage of hiring becomes an important criteria for employee selection. Cognitions specified by the theory of planned behavior (TPB) were examined as mediators of the relationship between individuals' personality traits and the intention to work abroad. Utilizing a sample of 518 German business students, mediation analysis suggests that the cognitive constructs contained within the TPB fully mediate the relationships between the personality traits of openness to experience and extraversions and the intention to work abroad.     

Price Rigidities, Inflationary Finance and Long-run Growth*

The paper considers a monopolistically competitive intertemporally optimizing monetary economy featuring long-term growth. Inflation is generated through sluggish price-setting and contributes to budgetary finance through seignorage. This setup permits exploration of the interaction between inflation and growth in a tractable way. Superneutrality holds in the long but not the short run. The budget deficit fuels inflation with a hysteresis. Growth and inflation are negatively correlated in the long run, with causality running from the former to the latter, and positively correlated in the short run regardless of the origin of shocks. Price flexibility precipitates adjustment but appears also to destabilize output.     

Productivity Growth, Participation and Communication

The issue of communication between workers and firms has become important in recent political and economic policy debates. The most obvious example of this is the debate over whether the UK should adopt the Social Chapter of the Maastricht Treaty, which would make it mandatory for many firms to consult and communicate with their workforce. Another example is the debate over whether workers should be regarded as 'stakeholders'. In this paper we use establishment level data from the 1990 WERS survey to show that communication is associated with higher productivity growth. However, the strongest effects come from informal contact rather than through more formal bodies such as works councils. We argue that our results are consistent with a causal relationship where communication leads to higher productivity growth and further argue that the evidence is against the alternative interpretation of reverse causation. Our results have interesting policy implications: initiatives that increase communication can increase productivity growth, but will only be effective if they increase the amount of informal communication.