Bargaining and the observability of contractual commitments via third parties

This paper analyzes a two-stage model of bilateral bargaining where one of the agents has the option to delegate. A first approach is to assume that the contract between the agent and his representative is perfectly observable and can be renegotiated. Commitment effects arise although renegotiation is possible. Then, perfect observability of the contract is weakened to observe it with certain probability. Commitment effects as pure-strategy equilibria exist if this probability is sufficiently close to 1, in contrast to Bagwell's [1995] findings that imperfect observability undermines commitment. Considering the realistic case of the actual agreement between two parties being private information, the commitment value as equilibrium outcome disappears since having closed a renegotiation-proof contract offers costless self-insurance against strategic misunderstandings. The author is grateful for helpful comments from Vasco Santos, participants at the International Atlantic Economic Conference, October 7–10, 1999, Montreal, Canada, an anonymous referee, and David M. Aadland.     

ERP On Demand Platform

Platforms for SaaS-based enterprise applications are prospering and the number of on-demand ERP vendors is increasing. We combine both phenomena for the first time and illustrate how the integration of a sustainability benchmarking service into an on-demand ERP platform provides added value beyond pure cost savings. By applying a qualitative system dynamics approach we identify self-reinforcing mechanisms which allow a faster and more comprehensive market penetration compared to providing these services separately.     

Strategic Incentives for Keeping One Set of Books in International Transfer Pricing

We study the equilibrium accounting and transfer pricing policies in a multinational duopoly with price competition in the final product market. We find that the firms in a duopoly can benefit from strategically using the same transfer price for tax and managerial purposes instead of using separate transfer prices for both objectives. According to our results, the practice of one set of books should be the prevalent accounting method in markets with a small number of competitors and similar products.     

The tactical and strategic value of hedge fund strategies: a cointegration approach

This paper analyzes long-term comovements between hedge fund strategies and traditional asset classes using multivariate cointegration methodology. Since cointegrated assets are tied together over the long run, a portfolio consisting of these assets will have lower long-term volatility. Thus, if the presence of cointegration lowers uncertainty, risk-averse investors should prefer assets that are cointegrated. Long-term (passive) investors can benefit from the knowledge of cointegrating relationships, while the built-in error correction mechanism allows active asset managers to anticipate short-run price movements. The empirical results indicate there is a long-run relationship between specific hedge fund strategies and traditional financial assets. Thus, the benefits of different hedge fund strategies are much less than suggested by correlation analysis and portfolio optimization. However, certain strategies combined with specific stock market segments offer portfolio managers adequate diversification potential, especially in the framework of tactical asset allocation.

Why do patients select a hospital? A conjoint analysis in two German hospitals

Patients decide on where to consume hospital services in Germany. Thus, the understanding of the exact hospital selection criteria and their weights is important. This research reviews the antecedents of hospital selection utilizing the conjoint methodology with regard to six questions. (1) Which are the relevant choice criteria, and (2) what are their weights? (3) Which criteria receive an increased importance in the absence of experience? (4) Do differences between compulsory and privately insured patients, (5) between hospitals with regard to their size, and (6) between female and male patients exist? The relevance and importance of nine pre-selected criteria are determined through two conjoint analyses. Experience is found to be most important followed by referral by general practitioner, certified quality management system, positive press coverage, recommendation by relatives and acquaintances and distance to the hospital. Reception area design and the personnel's friendliness, the website quality and the published quality report are less relevant. Without experience, reception area design, personnel's friendliness and distance to the hospital receive an increased importance. In addition, for some criteria notable discrepancies between female and male patients and between patients with different insurance policies are found.     

Investigating the gap between citizens' sustainability attitudes and food purchasing behaviour: empirical evidence from Brazilian pork consumers

Consumers worldwide are increasingly concerned with sustainable production and consumption. Recently, a comprehensive study ranked 17 countries in regard to their environmentally friendly behaviour among consumers. Brazil was one of the top countries in the list. Yet, several studies highlight significant differences between consumers' intentions to consume ethically, and their actual purchase behaviour: the so‐called ‘Attitude‐Behaviour Gap’. In developing countries, few studies have been conducted on this issue. The objective of this study is therefore to investigate the gap between citizens' sustainability‐related attitudes and food purchasing behaviour using empirical data from Brazil. To this end, Brazilian citizens' attitudes towards pig production systems were mapped through conjoint analysis and their coexistence with relevant pork product‐related purchasing behaviour of consumers was investigated through cluster analysis. The conjoint experiment was carried out with empirical data collected from 475 respondents surveyed in the South and Center‐West regions of Brazil. The results of the conjoint analysis were used for a subsequent cluster analysis in order to identify clusters of Brazilian citizens with diversified attitudes towards pig production systems, using socio‐demographics, attitudes towards sustainability‐related themes that are expected to influence the way they evaluate pig production systems, and consumption frequency of various pork products as clusters' background information. Three clusters were identified as ‘indifferent’, ‘environmental conscious’ and ‘sustainability‐oriented’ citizens. Although attitudes towards environment and nature had indeed an influence on citizens' specific attitudes towards pig farming at the cluster level, the relationship between ‘citizenship’ and consumption behaviour was found to be weak. This finding is similar to previous research conducted with European consumers: what people (in their role of citizens) think about pig production systems does not appear to significantly influence their pork consumption choices. Improvements in the integrated management of this chain would better meet consumers' sustainability‐related expectations towards pig production systems.     

Fine-scale conservation planning outside of reserves: Cost-effective selection of retention patches at final harvest

Retaining forest patches at final harvest is a key conservation measure in boreal forests, but guidelines for how to increase its cost-effectiveness are lacking. In a study in boreal Sweden, we compared the cost-effectiveness of three different approaches a forest owner may use to select patches: selection based on the conservation value of patches alone, economic cost alone or both of them combined. We also compared the cost-effectiveness of six different common types of patches. Conservation value was measured as species richness of bryophytes and lichens and as structural characteristics of patches. Compared to the selection approach in which both conservation value and cost were used, cost-effectiveness was 5-14% lower when only conservation value was used, depending on how conservation value was measured. On the contrary, using only the economic cost decreased the cost-effectiveness by only 1-2%. Among the patch types, swamp forest areas and deciduous tree groups were cost-effective types to retain. However, the patch types were complementary in their species composition and all hosted unique species. We argue that, ideally, assessments of both conservation values and economic costs of retaining patches should be made prior to harvest to enable planners to make well-informed and cost-effective decisions.     

Exploring PMOs through community of practice theory

This article explores project management offices (PMOs) through community of practice theory. Preliminary results from a national health care case study are used to confirm the legitimacy of this approach. Today's knowledge‐based economy calls for mechanisms to share knowledge. The issue of making more with less is at stake in order to reuse good practices, support innovative practice, and prevent the reinvention of the wheel. Members of these communities are at the heart of the learning process. The originality of this research is that it sheds light on PMOs in a new theoretical perspective within the field of knowledge management.