Product liability and the virtues of asymmetric information

This paper analyzes a two-period setup in which firms differ with respect to costs of care and may use care-taking to signal type to consumers, who are able to observe precaution taken only ex post. Applying the refinement of the intuitive criterion to the concept of the perfect Bayesian equilibrium, we establish a unique separating equilibrium for every share of harm borne by firms. For low levels of victim compensation, we show that (i) firms choose weakly higher care in a setting in which customers do not know the firms’ type than in a setting in which they do, and (ii) the deviation in precaution taken due to asymmetric information on firm type is welfare-improving.     

Die Macht der Meinungsmacher: Ratingagenturen und staatliche Verschuldungsdynamiken

Die Finanzm?rkte reagieren in der gegenw?rtigen Staatsschuldenkrise offensichtlich auf Meinungs?u?erungen der marktbeherrschenden Ratingagenturen — selbst wenn diese in scheinbarem Widerspruch zur vorherigen Bewertung ?konomischer Fundamentaldaten stehen. Das führt dazu, dass private Interessen staatliche Verschuldungsdynamiken beeinfl ussen k?nnen und für sie damit politischer Handlungsspielraum entsteht.     

Environmental and Firm Level Influences on Inter‐Organizational Trust and SME Performance

We investigate the effects of focal firm knowledge intensity and uncertainty on inter‐organizational trust and subsequent performance of small and medium size enterprises (SMEs). We integrate the trust literature with transaction cost literature as both of these offer partial explanations of the dynamics of inter‐organizational trust in the context of an SME. We propose that knowledge intensity of the focal firm will have a positive relationship while uncertainty will have a negative relationship with inter‐organizational trust in an exchange relationship. Further, we propose a positive relationship between trust and SME performance, which will be contingent on the level of external and internal uncertainty faced by the focal firm. Empirical evidence, based on the survey data of 565 German SMEs, mostly supports our arguments.     

Einzelbesprechungen

Ohne Zusammenfassung     

What comes next after recession? – Airline industry scenarios and potential end games

While airline managers learned lessons from the 2001/2003 “double dip” economic crisis, the post 2008 downturn has been more extreme. Airlines reacted quickly in 2008 and adjusted capacities and cost levels but recovery in profits has been slow for many airlines. The dynamics of the downturn has enlarged the gap between successful and less successful business models, and fostered shakeouts of the latter. Furthermore, the occurrence of new business models has accelerated. In 2001, it was the European continental low cost model; this time, we may see new attempts to change the rules of the game in international long-haul traffic. Long-term non-cyclical trends such as deregulation or consolidation will also shape potential end game scenarios, We briefly examine the differences between the last (2001/03) and the recent (2008/09) aviation crises, and evaluate the impact on different types of carriers.     

Stabilizing an unstable economy: Fiscal and monetary policy,stocks, and the term structure of interest rates

Monetary and fiscal policy measures have been applied in order to avert the financial market collapse and counteract the global recession. In this paper we present an integrated macromodel which in particular focuses on the financial markets. We use a Tobin-like macroeconomic portfolio approach, and the interaction of heterogeneous agents on the financial market to characterize the potential for financial market instability. We show that specific but unorthodox fiscal and monetary policies have to be used to stabilize such unstable macroeconomies.