Calling circles: network competition with nonuniform calling patterns

We introduce a flexible model of telecommunications network competition with nonuniform calling patterns, accounting for the fact that customers tend to make most calls to a small set of similar people. Equilibrium call prices are distorted away from marginal cost, and competitive intensity is affected by the concentration of calling patterns. Contrary to previous predictions, jointly profit‐maximizing access charges are set above termination cost in order to dampen competition if calling patterns are sufficiently concentrated. We discuss implications for regulating access charges as well as on‐ and off‐net price discrimination.     

Dressed to merge — small fits fine: M&A success in the fashion and accessories industry

In this paper we examine the value implications of 192 M&A transactions in the fashion and leather accessories industry during the period from 1994 to 2009. Contrary to general cross-country evidence we find highly significant, positive abnormal returns to acquiring shareholders. Cross-sectional analysis further reveals that the key value drivers are diversifying fashion M&A transactions for smaller, profitable companies that reduce idiosyncratic risk whereas deals executed by large companies that act as frequent acquirers do not, on average, significantly enhance shareholder wealth.     

New Evidence on Housing Wealth and Consumption Channels

The Journal of Real Estate Finance and Economics - This paper provides new evidence on the effect of housing wealth on consumption by focusing on the impact of home-equity extraction. We develop a...     

Does bureaucracy kill individual initiative? The impact of structure on organizational citizenship behavior in the hospitality industry

In their quest for improved service quality, hospitality organizations face a paradox. Standardization and centralization are generally perceived as essential to maintaining high service standards. These bureaucratic mechanisms, however, are suspected to have a negative impact on spontaneous “organizational citizenship” behaviors, which are equally essential for flawless service delivery. Empirical results from the Swiss hotel industry suggest that “helping” behavior is more widespread than “voice” behavior among hotel employees. The results also provide support for the hypothesis that “helping” and “voice” behaviors are negatively affected by a centralized organization structure. Theoretical and practical implications of these results are discussed.     

Heterogeneous Firms,Globalisation and the Distance Puzzle

Despite the strong pace of globalisation, the distance effect on trade is persistent or even growing over time (Disdier and Head, 2008). To solve this distance puzzle, we use the recently developed gravity equation estimator from Helpman et al. (2008) (HMR henceforth). Using three different data sets, we find that the distance coefficient increases over time when ordinary least squares (OLS) is used, while the non‐linear estimation of HMR leads to a decline in the distance coefficient over time. The distance puzzle, thus, arises from a growing bias of OLS estimates. The latter is explained by an increase in the importance of the bias from omitting the number of heterogeneous exporting firms relative to the bias from omitting zero trade flows. Furthermore, we show that including zero trade flows cannot solve the distance puzzle when using HMR. The HMR estimates are strongly correlated with the time pattern in freight costs reported by Hummels (2007).     

Argumente gegen die Reform des Stabilitätsgesetzes wenig überzeugend — eine Replik

In their reply, Dullien and van Treeck criticise the argument of Michaelis, Elstner and Schmidt that the German Stability and Growth law (StabG) from the 1960s must not be reformed. They claim that Michaelis et al. neglect that the concept of sustainability has changed over the past 50 years and that nowadays issues such as social and ecological sustainability should be included. Moreover, the claim by Michaelis et al. that the StabG provides important tools for business cycle management is hardly convincing, given that these tools have not been used since the 1970s and stimulus packages have been passed on other legal grounds. / In their response Michaelis et al. stress that economic policy has to consider equally aspects of economic, social and ecological sustainability. The StabG, however, is a completely inappropriate basis for attempts to address aspects of social and ecological sustainability. The main use of the StabG consists in the possibility to quickly implement fiscal measures that could mitigate the consequences of severe economic downturns. Proposals of Dullien and van Treeck that various dimensions of sustainability are controllable by a predetermined set of instruments neglect the complexity of the social market economy.     

Das leere Versprechen der aktiven Konjunktursteuerung

Since the financial crisis and the ensuing sluggish recovery, a growing number of voices have called for a more active role for fiscal policy to stimulate the economy. We reject this call and argue that in normal times, monetary policy and automatic stabilisers are sufficient to smooth the business cycle. The effectiveness of active fiscal policy is too uncertain and the requirements for a sensible adjustment are too high. Moreover, determining the state of the business cycle is almost impossible in real time. The benefits of active fiscal policy therefore do not outweigh its costs. Only in exceptional situations should policy makers consider active fiscal policy measures as an option.     

Competition versus cooperation: How technology-facilitated social interdependence initiates the self-improvement chain

Consumers are increasingly using technologies such as wearables or mobile apps to achieve their self-improvement goals. Such technologies often contain features that enable social interdependence (competition or cooperation) among users to support them in improving their engagement, performance, and well-being (life satisfaction and personal growth). However, the critical question remains: does competition or cooperation best serve users in attaining these self-improvement goals? Evidence from an online experiment and a field study reveals that competition is more effective in driving performance and personal growth, while cooperation is superior in terms of behavioral engagement and life satisfaction. Furthermore, the results indicate that the effects are mediated by strive for success and fear of failure, two counteracting psychological processes. While competition is the stronger trigger for both pathways, downstream effects vary depending on the self-improvement goal considered. This research thus provides insights into whether and how users can best realize their self-improvement goals using technologies that include social features.     

CEOs' Passion for Inventing and Radical Innovations in SMEs: The Moderating Effect of Shared Vision

Based on a sample of 388 small and medium‐sized enterprises (SMEs), we investigate how a CEO's passion for inventing is associated with radical innovations in SMEs. Furthermore, we examine whether this relationship is moderated by a shared vision. Our results demonstrate that CEOs who are passionate about inventing play a significant role with regard to radical innovation and that the degree to which a firm's members share its vision is positively correlated with this relationship. Our findings enrich upper echelons theory by incorporating insights into how deep‐level psychological traits are related to firm outcomes. In addition, we enhance our understanding of how passion can actually predict firm‐level outcomes.