A look into the factor model black box: Publication lags and the role of hard and soft data in forecasting GDP

We derive forecast weights and uncertainty measures for assessing the roles of individual series in a dynamic factor model (DFM) for forecasting the euro area GDP from monthly indicators. The use of the Kalman smoother allows us to deal with publication lags when calculating the above measures. We find that surveys and financial data contain important information for the GDP forecasts beyond the monthly real activity measures. However, this is discovered only if their more timely publication is taken into account properly. Differences in publication lags play a very important role and should be considered in forecast evaluation.     

Recursive Nash bargaining over a productive asset

We propose an equilibrium concept (the recursive Nash bargaining solution) that describes the outcome of repeated negotiations between two rational agents under the assumptions that the state of the economic system under consideration changes according to the actions of the players and that neither party can make binding commitments to future behavior. This equilibrium is dynamically consistent but typically not Pareto-efficient. As an application, we compute the recursive Nash bargaining solution in a model of two heterogeneous agents bargaining over the use of a productive asset with constant gross rate of return and study how the time-preference rates and the elasticities of substitution affect the solution.     

Proportional Odds Models with High‐Dimensional Data Structure

The proportional odds model is the most widely used model when the response has ordered categories. In the case of high‐dimensional predictor structure, the common maximum likelihood approach typically fails when all predictors are included. A boosting technique pomBoost is proposed to fit the model by implicitly selecting the influential predictors. The approach distinguishes between metric and categorical predictors. In the case of categorical predictors, where each predictor relates to a set of parameters, the objective is to select simultaneously all the associated parameters. In addition, the approach distinguishes between nominal and ordinal predictors. In the case of ordinal predictors, the proposed technique uses the ordering of the ordinal predictors by penalizing the difference between the parameters of adjacent categories. The technique has also a provision to consider some mandatory predictors (if any) that must be part of the final sparse model. The performance of the proposed boosting algorithm is evaluated in a simulation study and applications with respect to mean squared error and prediction error. Hit rates and false alarm rates are used to judge the performance of pomBoost for selection of the relevant predictors.     

Administrative tradition and management reforms: a comparison of agency chief executive accountability in four Continental Rechtsstaat countries

This article investigates perceived accountability patterns of national agencies’ chief executives in four countries with a Rechtsstaat tradition and tests theoretical expectations about potential tensions between managerial reforms and administrative values using survey data (N = 453). All countries combine old and new forms of accountability requirements, while legal and financial accountability have not been replaced with results accountability. Switzerland and the Netherlands score highest on results accountability, though in combination with legal and financial accountability, which are dominant in Germany and Austria. Nation-specific characteristics seem more important for core values of public administration than generic characteristics of the Rechtsstaat model.     

“Want to” Versus “Have to”: Intrinsic and Extrinsic Motivators as Predictors of Compliance Behavior Intention

“Worthless,” “money burning,” or “black holes” is how media and professionals describe compliance practices today. Practitioners are unenthusiastic about control systems, codes of conducts, and systems for compliance management that are increasing in volume but not in effectiveness. In order to help practitioners clarify what actually makes employees comply with their compliance program, this study examines intrinsic and extrinsic motivators of 119 employees from procurement and sales. We contribute to the existing motivation literature, testing the self‐determination theory in low and high hierarchical levels. Our findings show that intrinsic motivators are more strongly and positively related to compliance intention on higher hierarchical levels than the lower ones. However, employees from higher hierarchies show overall less compliance intention than employees from lower hierarchies. © 2015 The Authors. Human Resource Management published by Wiley Periodicals, Inc.     

Privacy Is Precious: On the Attempt to Lift Anonymity on the Internet to Increase Revenue

We investigate the effect of a reduction of anonymity on consumers' purchase decisions (whether to buy, and if so how much to pay) at an online music store with Pay‐What‐You‐Want (PWYW)‐like pricing and in an Internet experiment mimicking the real world situation. Revealing the customer's name, e‐mail, and payment to the artist (seller) led to insignificantly higher payments, although it drastically reduced the number of customers purchasing. Overall, the regime led to a revenue loss of 25%. In the online experiment, revenue drops by 35%. These results suggest that the positive effect of reduced anonymity, previously established for donation or public goods contexts, does not extend to a consumption environment. Instead, the substantial opt‐out of customers is likely to be motivated by concerns about privacy.     

FISCAL POLICY AND OPTIMAL TAXATION: EVIDENCE FROM A TAX SMOOTHING EXERCISE

Testing the tax smoothing hypothesis for the EU‐15, we hypothesise that the introduction of the 3%‐deficit rule of the Maastricht Treaty in 1993 may have inhibited tax smoothing as European Union (EU)‐member states are no longer capable of letting the deficit grow as much as implied by expected decreases in government expenditure. Our results show that for some countries this fiscal rule may have indeed changed the validity of the tax smoothing hypothesis, thus implying that EU accession has caused welfare losses.     

The treatment of seasonality in error correction models as unobserved component: a case study for an Austrian consumption function

This paper deals with an alternative approach to treating seasonality in error correction models for consumption with a parsimonious parameterization as proposed by Harvey and Scott. We introduce an unobserved seasonal component into an error correction model for Austrian consumer expenditures on nondurables and services and compare the results with different approaches. The use of stochastic seasonal results in a definite improvement of the estimated model. First version received: October 1997/Final version received: May 2000     

Decomposing desert and tangibility effects in a charitable giving experiment

Several papers have documented that when subjects play with standard laboratory “endowments” they make less self-interested choices than when they use money they have either earned through a laboratory task or brought from outside the lab. In the context of a charitable giving experiment we decompose this into two common artifacts of the laboratory: the intangibility of money (or experimental currency units) promised on a computer screen relative to cash in hand, and the distinct treatment of random “windfall” gains relative to earned money. While both effects are found to be significant in non-parametric tests, the former effect, which has been neglected in previous studies, has a stronger impact on total donations, while the latter effect has a greater impact on the probability of donating. These results have clear implications for experimental design, and also suggest that the availability of more abstract payment methods may increase other-regarding behavior in the field.