Do Economists Have a Fatherland? How Global and National Efficiency Considerations Influence Economists’ Policy Judgements

This study evaluates whether economists support economic policies such as free trade because they deem them to be good for their home country or because they increase global welfare. In a telephone survey, 100 German economists were asked to judge different policy proposals dealing with immigration, military exports and climate policy. Our results show that the acceptance of the policy proposals is strongly influenced by national efficiency judgements. In contrast, global efficiency judgements exert no significant positive effect on policy proposal acceptance. These effects even hold for economists who self‐reported a global perspective in the assessment of the policy proposals. These judgements might be based on the potentially erroneous assumption that their policy judgements, taken from a national perspective, are consistent with global interests.     

An inequality measure for stochastic allocations

Few papers in the literature on inequality measurement deal with uncertainty, particularly when the ranking of cohorts may not be fixed. We present a set of axioms implying such a class of inequality measures under uncertainty that is a one-parameter extension of the generalized Gini mean over the distribution of average allocations. The extension consists of a quadratic term accounting for inter-personal correlations. In particular, our measure can simultaneously accommodate a preference for “shared destiny”, a preference for probabilistic mixtures over unfair allocations, and a preference for fairness “for sure” over fairness in expectation.     

THE WAR ON DRUGS 2.0: DARKNET FENTANYL'S RISE AND THE EFFECTS OF REGULATORY AND LAW ENFORCEMENT ACTION

U.S. overdose deaths attributed to synthetic opioids, such as fentanyl, have increased from under 3,000 in 2013 to nearly 20,000 in 2016, making up half of all opioid‐related overdose deaths. Using web scrapes of darknet markets from 2014 to 2016, I provide historical prices for fentanyl and its most popular analogues and find that fentanyl vendors priced fentanyl in 2014 at a 90% discount compared to an equivalent dose of heroin. Using regression discontinuity, I evaluate the effects of two major law enforcement and regulatory events. I find minimal lasting effects of U.S. legal actions intended to disrupt darknet markets, but there are statistically significant indications of a price increase corresponding with regulatory action in China. Despite these indications of some regulatory success, fentanyl prices remained approximately 90% cheaper than heroin. (JEL I18, K42)     

International Knowledge Spillovers to Developing Countries: The Case of Indonesia

The successful industrialization and catch up of countries in the East Asian region gave rise to an important debate concerning the role played by technological learning and knowledge creation. This paper seeks to examine this issue for Indonesia, a second‐tier newly industrializing country. It focuses on the relative importance of learning from imported inputs vis‐à‐vis other factors influencing productivity in manufacturing. The concept of learning is operationalized drawing on the literature on technology spillovers on the one hand, and the literature on catch up à la Abramovitz, on the other. Our results indicate that knowledge spillovers have become significant contributors to labor productivity growth after the liberalization of the Indonesian economy.     

Risky procurement with an insider bidder

Procurement auctions carry substantial risk when the value of the project is highly uncertain and known only to insiders. This paper reports the results from a series of experiments comparing the performance of three auction formats in such complex and risky settings. In the experiment, every bidder knows the private value for the project but only a single insider bidder knows the common-value part. In addition to the standard second-price and English auctions we test the “qualifying auction,” a two-stage format commonly used in the sale of complex and risky assets. The qualifying auction has a fully “revealing” equilibrium that implements the revenue-maximizing outcome but it also has an uninformative “babbling” equilibrium in which bidders place arbitrarily high bids in the first stage. In the experiments, the latter equilibrium has more drawing power, which causes the qualifying auction to perform worse than the English auction and only slightly better than a sealed-bid second-price auction. Compared to the two other formats, the English auction is roughly 40% more efficient, yields 50% more revenues, avoids windfall profits for the insider, while protecting uninformed bidders from losses.     

Types of technological scanning in manufacturing SMEs: an empirical analysis of patterns and determinants

As the component of environmental scanning that is concerned with science and technology, products, production processes, hardware and information systems, the concept of technological scanning, especially in small business, has received little empirical attention in the past. This paper aims to better define the different technological scanning practices of small and mediumsized enterprises (SMEs) and identify the main factors that determine these differences. This is done without relation to organizational effectiveness as technological scanning is but one of many potential influences on business performance. Using data obtained from a mail survey on the scanning practices of 324 SMEs, the study hopes to increase our understanding of how various entrepreneurs confront various environments in practice. The research model used is based on the notion that, to define different technological scanning practices in small business, four aspects must be considered: strategic orientation (objectives pursued); types of information sought (on technologies and their costs, human resources necessary, etc.); sources used (customers, fairs, specialized publications, suppliers, research centres, etc.); and scanning management practices (methods used, staff involved, level of formalization, and integration of activities). These aspects are contingent upon four factors: the managers' profile; their perception of the environment; their firm's characteristics; and their information network. A cluster analysis reveals that the sampled firms can be grouped into four separate categories, according to the intensity of their technological scanning activities and the type of strategy used. In the first category, where scanning is most developed, the SMEs emphasize cost reduction and control, followed by improvements in competitiveness; they seek mainly financial and human resource information, and use their own internal resources to obtain it. A second category, where scanning is least developed, puts the emphasis on increasing production capacity and flexibility; these SMEs seek very diverse information from many sources. Of the two intermediate groups, one aims to diversify and increase the quality of products and services; marketing information is obtained through customers, suppliers and subcontractors. The other, whose scanning is better organized, favours increasing production capacity through innovation and market information with the help of governmental and financial institutions. This research concludes that there is no ‘one best way’ to environmental scanning in manufacturing SMEs, and that it all depends upon the organization, its objectives and its environmental pressures.     

Growing Followers: Exploring the Effects of Leader Humility on Follower Self‐Expansion,Self‐Efficacy,and Performance

Although the effectiveness of leader humility has been well documented, our understanding of how leader humility influences followers psychologically is limited. Surpassing a mere leader‐centric understanding of the leader influence process by more fully understanding how leadership behavior shapes followers psychologically has been identified as a critical need by leadership scholars. Drawing on self‐expansion theory, we argue that leader humility triggers followers’ self‐expansion and that this psychological change enhances followers’ self‐efficacy, which in turn contributes to followers’ task performance. We also argue that the relationship between leader humility and followers’ self‐expansion is strengthened when leaders and followers are similar in age and gender. Using a time‐lagged research design with responses from 256 leader–follower dyads, we found support for our proposed model. We discuss the theoretical implications for our findings and suggest areas for future research.     

Wage posting without full commitment

Wage posting models of job search typically assume that firms can commit to paying workers exactly the posted wage. We relax this assumption and impose “downward” commitment; firms can commit only to paying at least their advertised wage. As each firm can only commit to pay at least their advertised wage, workers may demand that the firm pay more than the advertised wage. In labor markets with a finite number of workers and firms, the strategic interaction between firms makes it costly for firms to provide applicants the incentive not to demand wages in excess of the advertised wage. In equilibrium, firms may settle for running job auctions at the cost of losing control of the number of applicants that they can attract. When this strategic interaction between firms vanishes, workers never choose to demand more than the advertised wage.     

How Should the Graduate Economics Core be Changed?

The authors present suggestions by graduate students from a range of economics departments for improving the first-year core sequence in economics. The students identified a number of elements that should be added to the core: more training in building microeconomic models, a discussion of the methodological foundations of model-building, more emphasis on institutions to motivate and contextualize macroeconomic models, and greater focus on econometric practice rather than theory. The authors hope that these suggestions will encourage departments to take a fresh look at the content of the first-year core.     

Assessing techno-economic alternatives for rural development in Northeast Mexico

In the arid zone of Northeast Mexico are located some of the most socially deprived and economically marginal communities in the nation. This paper analyzes the current status of their social and economic organization and suggests alternative techno-economic subsistence activities that could improve productive capacity while preserving the fragile ecological balance between communities and exploitable natural resources. It shows how recent advances in computer mapping, linear programming, and techno-social modelling (SOPA technique) can assist decision makers and planners in choosing the best mix of social, economic, and technical advantages from an array of scenarios of change. A major finding is that the use of cooperatives as a managerial format is not always the best one to utilize, given the variability of community cohesiveness and varying organizational requirements of different techniques of exploiting animal and plant resources.