Reliable Inference in Categorical Regression Analysis for Non‐randomly Coarsened Observations

In most surveys, one is confronted with missing or, more generally, coarse data. Traditional methods dealing with these data require strong, untestable and often doubtful assumptions, for example, coarsening at random. But due to the resulting, potentially severe bias, there is a growing interest in approaches that only include tenable knowledge about the coarsening process, leading to imprecise but reliable results. In this spirit, we study regression analysis with a coarse categorical‐dependent variable and precisely observed categorical covariates. Our (profile) likelihood‐based approach can incorporate weak knowledge about the coarsening process and thus offers a synthesis of traditional methods and cautious strategies refraining from any coarsening assumptions. This also allows a discussion of the uncertainty about the coarsening process, besides sampling uncertainty and model uncertainty. Our procedure is illustrated with data of the panel study ‘Labour market and social security' conducted by the Institute for Employment Research, whose questionnaire design produces coarse data.     

Process innovation capability and subsequent collaborative team performance in travel planning: a knowledge exchange platform perspective

Purpose: Backpacker tourism is flourishing in this century as the high development of Internet technology which enables travellers to search for resources they need easier. The research goal of this study was to exam how virtual skill and collective efficacy affect process innovation capability and subsequent team performance of collaborative design team in a virtual community. Design/methodology/approach: In this study, we formulated the virtual team model from the perspectives of open innovation paradigm and virtual competence, and we collected virtual community participation samples from the online communities. Invitation emails were delivered to numerous trip plan initiators in two well-known online travel communities for filling survey questionnaires for this study. In total, 3000 invitation messages were mailed, of which 373 were returned completed. The model and hypotheses were tested by structural equation modelling. Findings: Virtual competence, including collective efficacy and virtual media skill, is the essential key to facilitate process innovation capability and subsequent team performance success. Besides, knowledge sharing significantly moderates the relationship between process innovation capability and the team performance. Originality/value: Backpackers in the online travel communities have to have not only the willingness to collaborate, but also the abilities of using the correct tool to help with their tasks. When a self-efficacy gets into collective efficacy, it enables the collaborative team to develop with good virtual competencies. Accordingly, trip plan initiator and participants of a virtual team are as expertise contributors between conformity in online communities and online compulsive control tendencies.     

The Euro — A Tale of 20 Years: What Are the Priorities Going Forward?

Intereconomics - First, we need to recall the initial objectives set for the euro and how these have changed over time, notably due to the weaknesses that came to the fore throughout the recent...     

Jensen's alpha and the market‐timing puzzle

Theory predicts that market‐timing activities bias Jensen's alpha (JA). However, empirical studies have failed to find consistent evidence of this bias. We tackle this puzzle in a nested model analysis and show that the bias contains an exogenous market component that is unrelated to market‐timing skill. In a comprehensive empirical analysis of US mutual funds, we find that the timing‐induced bias in JA is mainly driven by this market component, which is uncorrelated with measured timing activities. Measures of total performance that allow for timing activities are virtually identical to JA, even if timing activities are present in the evaluated fund. Hence, we conclude that JA is a sufficient measure of total performance.     

Who benefits from privileged peers? Evidence from siblings in schools

By comparing siblings attending the same school at different points in time, we investigate whether the effect of peer quality on long-term labor market outcomes varies with parental background. We find that exposure to better peers—who have higher mean parental education—increases lifetime earnings of disadvantaged students, coming from families with low parental education, but penalizes privileged students from better educated families. These results suggest that desegregation policies that allocate disadvantaged students to schools with better peers produce long-term benefits. We discuss mechanisms and show that human capital accumulation, ordinal rank and network effects contribute to explain our findings.     

THE ECONOMIC AND BEHAVIORAL CONSEQUENCES OF ONLINE USER REVIEWS

Online user reviews have become an increasingly relevant informational tool during product search and adoption. Recent surveys have shown that consumers trust and rely on online reviews more than they do on website recommendations and experts opinions. As a new way of driving consumer purchasing intentions, online user reviews have therefore come under scrutiny by researchers. The objective of this paper is to offer an overview of the literature regarding the impact of online user reviews on economic indicators (e.g., sales, marketing strategies) and on consumer behavior. Furthermore, following the growing interest of academics and professionals alike on the topic, the present work provides an exploratory analysis of the consequences of online reviews on individual rating behavior – empirical regularities showed that online rating distributions tend to be concentrated on extreme values, possibly because of rating biases. As consumers and firms incorporate the heuristic cues from such distributions into their decision-making processes, biased ratings might lead to suboptimal choices. This overview presents established results (e.g., the impact of volume on product sales) and insights as issues for future research.     

Promotion and Prevention Contracts in Industry Level Firm to Firm Dyad

ABSTRACT

Purpose

This article aims to introduce and distinguish two features of contract design – prevention and promotion contracts – and compares their effects on opportunism within the distributor–supplier relationship. It also examines the moderating role of ex post contract enforcement strategies.     

Precautionary retirement and precautionary saving

The paper analyzes the lifetime utility maximization problem of an agent who chooses her saving and timing of retirement in the presence of labor income risk in a simple setting where a pure redistributive pension scheme is in place. In this context, a precautionary motive for retirement, which pushes old workers to replace an uncertain labor income with certain pension payments, and to retire early is identified. The conditions for precautionary retirement and saving to arise are then characterized and interpreted in two settings. In the first setting, utility only depends on income, and a sufficiently low level of absolute prudence is necessary for precautionary retirement. A sufficiently high level is necessary however for precautionary saving, which can coexist with precautionary retirement only for intermediate values of absolute prudence. In the second setting, agent utility also depends on leisure, and three conditions allow the precautionary motive for retirement and saving to jointly operate: prudence, an index of absolute prudence sufficiently low and cross-prudence in leisure.     

Earnings Instability and Tenure

We study the effect of tenure on earnings instability in Italy using the reforms of temporary employment contracts, which affected the average tenure of workers differentially across cohorts. We develop a model of earnings dynamics, and we exploit the variation of tenure and instability over time and across birth cohorts to estimate policy‐relevant parameters. Our results indicate that each year of tenure on the job reduces earnings instability by 11 percent; the drop is faster in the first three years of the match. Workers on a temporary contract have an earnings instability up to 100 percent higher than workers on a permanent contract.