Bargaining under Uncertainty and the Monotone Path Solutions

Uncertainty with respect to the feasible set of utility vectors is introduced in an axiomatic bargaining model. Given a criterion for nonprobabilistic decision-making under uncertainty, a natural efficiency requirement can be imposed on a bargaining solution. Using the maximin ordering, thestrictly monotone pathsolutions (generalizations of theegalitariansolution) to the bargaining problem are characterized as the only continuous solutions that satisfy this efficiency axiom. If the maximin criterion is replaced by the maximax ranking or a strict convex combination of the maximin and the maximax criterion, imposing our efficiency axiom and continuity leads to thedictatorialsolutions.Journal of Economic LiteratureClassification Number: C78.     

Aggregation of Directional Distance Functions and Industrial Efficiency

Three main objectives are pursued in this paper. First, we intend to analyze the aggregation problem of directional distance functions from a constructive viewpoint. We provide necessary and sufficient conditions concerning the structural properties of the production technology and of the nature of groups of firms. Indeed, exact additive aggregation holds for a linear technology and for a direction solely defined in the output space. Second, since these conditions are somewhat restrictive, we are interested in providing a measure for the aggregation bias through the relationship between industrial and structural technical efficiency. Finally, we show that this aggregation bias is a lower bound for industrial allocative efficiency.     

All politics is local: The effect of fiscal and monetary constitutions on economic policy

The rules of behavior for the monetary authorities changed in 1933 and 1947 and the Fed temporarily changed its operating procedures in 1979, but these changes did not alter the fact that the monetary authorities serve as the agent of the fiscal authorities. On the fiscal side, a shift from a centralized process to one where Congress was composed of a set of individual entrepreneurs altered the fiscal focus from the national economy to one of localized interests. This change led to a more autoregressive and deficit-prone federal budget and changed the interaction between monetary and fiscal policy. It also elevated the status of monetary policy to the extent where financial markets react to every utterance from the monetary authorities.     

Continuous choice functions and the strong axiom of revealed preference

Summary In this note, it is shown that a result due to Uzawa showing that the weak axiom of revealed preference together with a regularity condition implies the strong axiom of revealed preference can be derived from the regularity conditionalone, if the choice function is continuous in prices and in income. The observation that the weak axiom of revealed preference is not needed suggests that this regularity condition is remarkably strong. The main result of the paper is quite general in the sense that the only additional assumption on the choice function is that the whole budget be spent.I thank Charles Blackorby for his comments on an earlier version.     

Karoushi: Stress-death and the meaning of work

The present article is concerned with some of the human factors involved when overtime and overwork become part of the regular and accepted pattern of work, with sometimes tragic results. While the economic miracle of Japan can be much admired, it has not been without human cost. Only recently, national and global attention is being focused on a new and deadly phenomenon in Japan:Karoushi, which the Japanese define as death from overwork, and which I choose to re-define as stress-death related to feelings of helplessness.It is my tentative hypothesis thatkaroushi is not directly caused by overwork, as popularly assumed. Rather, I believe that overwork is only one factor, and that stress-death is actually caused by the cumulative, long-range effects of working in a situation where one feels trapped and powerless to effect any change for the better, which in turn leads to attitudes of hopelessness — attitudes which are exacerbated, rather than ameliorated, by environmental and managerial factors.Dr. Walter Tubbs received his Ph.D. in Neuropsychology and Philosophy after doing work at Stanford and Drew Universities. After involvement in brain research at Stanford, he practiced stress-management counseling and biofeedback training at Loma Linda University, and taught for 13 years at the University of Redlands in California. He has been in Japan for 11 years as a Senior Researcher.     

Organizational climate factors and the evaluation of technical ideas

Based on data obtained from 359 idea evaluators, canonical correlation analysis was used to examine the relationship between several organizational factors and a set of criteria used in the evaluation of technical ideas. In contrast to other studies, it was found that organizational factors—assessed in terms of organizational climate—could be explained in terms of two dimensions: organizational clarity and risk. Technical evaluation criteria could be explained in terms of professional self-gratification and organizational responsibility. In light of the multivariate relationship among the two sets of factors, a number of organizational design implications are outlined.     

The implications of research on the R&D manager's role to the selection and training of scientists and engineers for management

A methodology for improving the process of selection and development of scientists and engineers for management is presented. This involves (1) specifying the R&D management role in terms of both behavior and style; (2) utilizing such a specification to estimate ‘probabilities of trainability’ and (3) employing the probabilities as criteria for the allocation of resources among managerial selection efforts versus training and development.     

The Volatility and Price Sensitivities of Managerial Stock Option Portfolios and Corporate Hedging

We use estimates of the Black–Scholes sensitivity of managers' stock option portfolios to stock return volatility and the sensitivity of managers' stock and stock option portfolios to stock price to test the relationship between managers' risk preferences and hedging activities. We find that as the sensitivity of managers' stock and stock option portfolios to stock price increases, firms tend to hedge more. However, as the sensitivity of managers' stock option portfolios to stock return volatility increases, firms tend to hedge less.