Changing rewards in contests: Has the three-point rule brought more offense to soccer?

In the mid-nineties FIFA decided to increase from two to three the number of points assigned to the winning team of a soccer match played under traditional round-robin national leagues. Since a game of soccer can be regarded as a contest, FIFA's measure provides an interesting case-study for analysing how a change in the system of rewards (from a zero to a non-zero sum rule) may affect the contestants' equilibrium behaviour. In this paper we try to assess, both theoretically and empirically, whether FIFA's new point rule has changed soccer towards a more offensive game, in which teams adopt more risky strategies. In particular, we evaluate the “na?ve hypothesis” according to which the measure would induce every team to play always more offensively, and we explore the extent to which the change in teams' behaviour may be affected by quality differentials between teams. Our most important hypothesis is that when the asymmetry between opposing teams is large enough, an increase in the reward for victory induces the weaker team to play more defensively, rather than the opposite. By looking at a subset of matches held in the Portuguese first division league, which approximate the conditions of our model, we find support for this hypothesis. First version received: July 1999/Final version received: May 2001     

Why are some people (and countries) more protectionist than others?

We analyze two cross-country data sets that contain information on attitudes toward trade as well as a broad range of socio-demographic and other indicators. We find that pro-trade preferences are significantly and robustly correlated with an individual's level of human capital, in the manner predicted by the factor endowments model. Preferences over trade are also correlated with the trade exposure of the sector in which an individual is employed: individuals in non-traded sectors tend to be the most pro-trade, while individuals in sectors with a revealed comparative disadvantage are the most protectionist. Third, an individual's relative economic status has a very strong positive association with pro-trade attitudes. Finally, non-economic determinants, in the form of values, identities, and attachments, play an important role in explaining the variation in preferences over trade. High degrees of neighborhood attachment and nationalism/patriotism are associated with protectionist tendencies.     

Is Private R & D Spending Sensitive to Its Price? Empirical Evidence on Panel Data for Italy

In this paper empirical evidence is presented on theelasticity of private R & D spending on its price. Acensored panel-data regression model with random effectsis applied to a balanced panel of 726 Italian firms overthe 1992–1997 period. Implied estimates point out thatItalian firms' response to policy measures (including taxcredits), aimed at reducing the user cost of R & D capital,is likely to be substantial (1.50–1.77). Furthermore, wealso find that the elasticity of R & D spending is higherin recession (2.01) than in expansion (0.87).     

Endogenous Growth Models and Stock Market Development: Evidence from Four Countries

This paper re‐examines the relationship between stock market development and economic growth. It provides a theoretical basis for establishing the channel through which stock markets affect economic growth in the long run. It examines the hypothesis of endogenous growth models that financial development causes higher growth through its influence on the level of investment and its productivity. The empirical part of this study exploits techniques recently developed to test for causality in VARs. The evidence obtained from a sample of four countries suggests that investment productivity is the channel through which stock market development enhances the growth rate in the long run.     

Distribution Dynamics and Cross‐Country Convergence: A New Approach

Distribution dynamics is a method for studying the evolution in time of an entire cross‐section distribution and has been initially employed to assess cross‐country convergence of per capita incomes. It has subsequently seen a widespread application in many different economic areas. When describing the law of motion of the distribution as a Markovian stochastic process, working in a discrete state‐space set up has several advantages, but the arbitrary discretisation of a continuous state‐space process has the undesired effect of removing the Markov property. This paper outlines a rigorous method for discretising a continuous state‐space Markov chain. The method is then applied to the distribution of per capita income across countries to reassess the (non‐) convergence phenomenon. It is found that the long run polarisation of per capita incomes across countries emerges even more dramatically than in previous studies.     

Employee Rights, Employee Responsibilities and Knowledge Sharing in Intelligent Organization

Much is currently being written about the need to encourage employees to share knowledge in order for companies to maintain a role as an intelligent organization in a technologically sophisticated environment. However, there is little written of the relationship between employee rights to satisfactory employment conditions, employee responsibilities in decision-making, and employee willingness to share their knowledge collaboratively. This paper seeks to redress this gap by discussing the importance of the relationship between employee rights and responsibilities and employee willingness to share knowledge. The reaction of a group of employees (academics) employed in an Intelligent Organization (university) to a reduction in their rights and responsibilities is discussed in order to design a framework of employee rights and responsibilities required for knowledge sharing in intelligent organizations.     

Werbewirkung durch Imagery-Processing

Zusammenfassung Die Frage, warum bestimmte Informationen oder Werbemittel mehr und andere weniger Überzeugungskraft aufweisen, beschäftigt die Marketingforschung und verwandte Gebiete schon seit geraumer Zeit. Eine dieser Thematik zuzuordnende Forschungsrichtung, die in den letzten zwanzig Jahren eine Forschungstradition entwickelte, ist die Imagery-Forschung. Autoren, die sich dieser Forschungsrichtung zuwenden, erklären die Wirkung von Informationen damit, dass die Elemente in dieser Information Gedächtnisinhalte oder Imaginationen (Fantasien bzw. Vorstellungen) bei den Rezipienten auslösen, die ihrerseits die Bewertung des relevanten Meinungs- oder Werbeobjekts beeinflussen. In diesem Beitrag wird zunächst dargestellt, welche Hypothesen im Mittelpunkt der neueren Imagery-Forschung stehen. Der Nutzen dieser Überlegungen besteht zum Beispiel für die Werbepraxis darin, dass konkrete Hinweise für die Werbegestaltung gegeben werden. Anschließend wird der Stand der empirischen Forschung zu diesen Hypothesen vorgestellt. Hier zeigt sich, dass die empirischen Erkenntnisse hinter dem Stand der theoretischen Forschung zurückgeblieben sind. Am Ende dieser Abhandlung werden Vorschläge unterbreitet, wie die theoretischen Überlegungen einer weitergehenden Analyse unterzogen werden können. JEL classifications M31, M37     

Growth at the EU periphery: the next enlargement

In 2004, 75 million people are scheduled to become EU citizens, making this the largest round of expansion of the Western European club to date. Of the 10 new entrants, 8 are former socialist economies, for which membership in the EU represents the coronation of an effort began with the fall of the Berlin wall in 1989. Based on their recent economic performance, the Central and Eastern European countries appear to be well on their way to successfully integrate in the Western European club, while the Baltic Republics still lag behind. The gap between the two groups emerges when we consider the adjustment of the production structure, the composition of trade and FDI flows, and income distribution. The evidence we review appears to support the role of institutional quality to facilitate integration in the world market and overall economic performance.     

Interest rate convergence, capital controls, risk premia and foreign exchange market efficiency in the EMS

This paper examines interest rate convergence between Germany and the other EMS countries. We argue that earlier tests of convergence based on cointegration are not informative, because cointegration only implies that a linear combination of interest rates is stationary. We show that a conclusive judgment about convergence can be made if interest rate differentials exhibit a trend towards zero during the period when convergence occurred, and if the cointegrating vector has unit coefficients. We then establish that convergence has taken place in the “hard” EMS period. We also attempt to identify the sources of nonstationarities in interest differentials by examining the existence of stochastic or deterministic trends in the expected rate of depreciation and in the risk premium. Finally, the possibility of market inefficiencies is discussed.     

DEALING WITH UNCERTAINTY: ROBUST RULES IN MONETARY POLICY

We argue that in seeking to insure against model uncertainty, monetary policy makers are often ready to trade ex post performance for greater certainty in the outcome. They thus look for rules that although not optimal ex post, have certain properties that qualify them as robust. We apply first, Gul's approach of ‘disappointment’ aversion to describe policy makers' aversion to uncertainty and then define the properties the notion of ‘robustness’ entails. With these two tools we then link the desirability of such robust rules to the degree of policy makers' aversion to uncertainty. We thus show that provided such robust rules exist, a larger degree of disappointment aversion leads to a greater emphasis on robustness in policy implementation.