Effective risk aversion in thin risk‐sharing markets

We consider thin incomplete financial markets, where traders with heterogeneous preferences and risk exposures have motive to behave strategically regarding the demand schedules they submit, thereby impacting prices and allocations. We argue that traders relatively more exposed to the market portfolio tend to behave in a more risk tolerant manner. Noncompetitive equilibrium prices and allocations result as an outcome of a game among traders. General sufficient conditions for existence and uniqueness of such equilibrium are provided, with extensive analysis of two‐trader transactions. Even though strategic behavior causes inefficient social allocations, traders with sufficiently high risk tolerance and/or high initial exposure to tradable securities obtain more utility gain in the noncompetitive equilibrium, when compared to the competitive one.     

A Strategic Social Action Framework: Theorizing and analyzing the alignment of social media affordances and organizational social action

Social media is a relatively new and dynamic field dealing with the development and use of social media technologies by individuals and more recently by organizations. Although several frameworks and models have been proposed for studying social media, most provide only limited insights into the complex social activities that are supported by the strategic usage of social media in organizational settings. In this article, we take up this challenge and introduce a Strategic Social Action Framework for analyzing social media technologies and their strategic usage in and by organizations. This framework is based on Habermas’ theory of social action and the idea that social media platforms serve as sets of rules and resources that mediate strategic organizational (inter-)actions involving these platforms. We demonstrate the value of the framework by theoretically delineating the appropriateness of the framework to specific social media tools, as well as by empirically analyzing the strategic use of two publicly available social media platforms—Facebook and Twitter—by three large airlines—Delta, KLM Royal Dutch Airlines, and JetBlue. Our findings reveal that when implementing social media in organizational contexts, developers and managers should critically evaluate (a) the need for supporting a rich variety of action types, (b) the possible role of social media support in the specific action situation, and (c) the strategic alignment of social media affordances and specific social action categories. Finally, we discuss theoretical and practical implications as well as directions for future research.     

Does greater income inequality cause increased work hours? New evidence from high income economies

We explore the extent to which individual's allocation of time between labour and leisure is affected by the consumption standards of the rich. Utilizing a panel data methodology and panel Granger causality tests we investigate the relationship between income inequality and work hours for a cluster of 24 high-income OECD countries over the period 1990–2015. Four alternative measures of income inequality are considered. We find that greater income inequality is associated with longer work hours indicating stronger concern for conspicuous consumption rather than conspicuous leisure. Even though the resulting estimates lend support to the theoretical framework on consumption emulation, the generated evidence also appears to be in line with a Duesenberry's and Frank's expenditure cascading approach. The ambiguity however arising from the Granger Causality tests appears to lead – to a certain extent – to different conclusions about the direction of causality or whether a causal relationship does even exist. It is therefore imperative that caution should be exercised when interpreting the direction of the causal dimension.     

The Effect of the Mandatory Adoption of Corporate Governance Mechanisms on Executive Compensation

This study investigates empirically the effect of corporate governance principles on executive compensation and firm performance prior to and after the adoption of the first Greek Law on corporate governance. Prior to the adoption of the law, managers were not compensated in line with their performance. Since its introduction, a significant link has been observed between executive compensation and company performance as measured by accounting measures of performance. Following the adoption of corporate governance principles by law, the main mechanism that controls executive compensation is the election of independent non-executive board members. The results are robust to alternative accounting measures of performance.     

Rules for the disposition of tariff revenues and the determination of common external tariffs in customs unions

This paper is about the determination of common external tariffs (CETs) in customs unions (CUs). We first examine how the relationship between preferences over CET levels, technology and the distribution of factor ownership in a CU is conditioned by the rule that determines the disposition of tariff revenues. We then explore how majority voting at the country level translates these preferences into an equilibrium CET. Among other things, we find that, when revenues are partitioned in proportion to members’ imports, tariff preferences may be polarized, the trade patterns of some CU members may be endogenous, and, as a result, their payoff functions may not be single-peaked. This leads to voting outcomes that dramatically differ from those arising under other sharing rules (e.g., the ‘population’ and ‘consumption’ rules) and raises the possibility of a Condorcet paradox.     

GENERALIZED SUPERMARTINGALE DEFLATORS UNDER LIMITED INFORMATION

We undertake a study of markets from the perspective of a financial agent with limited access to information. The set of wealth processes available to the agent is structured with reasonable economic properties, instead of the usual practice of taking it to consist of stochastic integrals against a semimartingale integrator. We obtain the equivalence of the boundedness in probability of the set of terminal wealth outcomes (which in turn is equivalent to the weak market viability condition of absence of arbitrage of the first kind) with the existence of at least one strictly positive deflator that makes the deflated wealth processes have a generalized supermartingale property.     

MULTIPLICATIVE APPROXIMATION OF WEALTH PROCESSES INVOLVING NO‐SHORT‐SALES STRATEGIES VIA SIMPLE TRADING

A financial market model with general semimartingale asset–price processes and where agents can only trade using no‐short‐sales strategies is considered. We show that wealth processes using continuous trading can be approximated very closely by wealth processes using simple combinations of buy‐and‐hold trading. This approximation is based on controlling the proportions of wealth invested in the assets. As an application, the utility maximization problem is considered and it is shown that optimal expected utilities and wealth processes resulting from continuous trading can be approximated arbitrarily well by the use of simple combinations of buy‐and‐hold strategies.     

Do Balkan economies catch up with EU? New evidence from panel unit root analysis

This paper explores empirically the issue of income convergence for the Balkans over the period 1994–2011 and the investigation relies on income differentials from both the averages of the European Union’s-15 (EU-15) and the European Union’s-24 (EU-24) as well as within the Balkan group. The adopted methodology deploys the non stationary panel unit root framework to cope with the problem of limited sample providing more reliable insight and, in particular, the analysis uses the univariate and panel minimum Lagrange Multiplier (LM) unit root tests, suggested by Lee and Strazicich (2003, 2004) and Im et al. (2005), that accounts for one and two endogenously determined structural breaks. The overall evidence is in favor of catching up with the EU benchmark cases as well as in favor of convergence within the Balkan area. However, disparities for some countries are confirmed.     

POPULAR COMPANIES IN GREECE: why the need for expansion might threaten their character?

ABSTRACT: In this paper we look at the most successful enterprises in the social sector, the enterprises that have been growing steadily for decades and whose assets today exceed 250 million ECUs. However, they are also facing the need for further expansion and for more and new capital. They must also compete with the capitalistic firms who draw millions of ECUs from the stock exchange. In short, these companies are being told that they can get all the money they need but they must first abandon all the elements that give them their social character .