Diversity in innovation and productivity in Europe

The diversity in innovation patterns across manufacturing and service industries and in their outcomes in terms of hourly labor productivity are investigated in this article considering six European countries. The Schumpeterian insights into the variety of innovation are developed in this work by identifying different innovation–performance relationships for industries and countries, relying either on the dominant role of product innovation, or on the diffusion of process improvements. Moreover, the “push” effect of innovation is combined with the “pull” effect of demand, by considering the impact of the dynamics of consumption and investment at the sectoral level. The results point out a “North-South” divide across EU countries, with the three countries of Northern Europe closely associated to the model of productivity growth based on product innovation, and the three Southern countries, mainly relying on the mechanisms by which process innovation is at the root of productivity improvements.     

Responsive pricing

We study the efficiency property of responsive pricing, a scheme that proposes to increase prices as a function of the level of capacity utilization in environments where traditional allocation schemes (e.g. competitive markets, non-linear pricing) cannot be implemented in practice. We show that although responsive pricing implements allocations that are arbitrarily close to full capacity utilization (no wasted capacity and no excess demand), these allocations are not always efficient. We identify conditions under which efficiency occurs and discuss implications for the use of responsive pricing. We would like to thank seminar participants at the LSE, Venezia, Toulouse, and Copenhagen as well as Piero Gottardi, Karel Mertens, Marco Ottaviani, Markus Poschke, Karl Schlag, and Sanne Zwart for useful comments.     

Precautionary saving under many risks

This paper studies precautionary saving when many small risks are considered. We first introduce two simultaneous risks: labor income and interest rate risks. We show that, in this context, sufficient conditions for precautionary saving are weaker than in similar models. Moreover, we find that, unlike previous literature, precautionary saving can occur in the case of negative covariance between the two risks and in the case of imprudence. We then extend our analysis to a three-risk framework, where a background risk is included. We derive sufficient conditions for precautionary saving which are interpreted in the light of the previous literature.     

Corporate heritage identity management and the multi-modal implementation of a corporate heritage identity

This article advances the theoretical and instrumental understanding of corporate heritage identities. This exploratory, empirical study focuses on both the nature and the relevance of corporate heritage identity as employed by managers for corporate identity management purposes. The research is undertaken within Britain's oldest brewery – one of the oldest corporate entities in Great Britain with a provenance spanning many centuries – and utilizes a qualitative and theory building case study. The research reveals two classes of management responsibilities vis-à-vis corporate heritage identity management, namely corporate heritage management activities and corporate heritage implementation strategies, which follow a particular corporate heritage identity implementation pattern identified. A normative framework synthesizes and marshals the findings. The empirical study provides insight into corporate heritage identity management and is potentially useful to both scholars and practitioners. This study advances the nascent area of corporate heritage identity management by providing empirical and theoretical insight into the salience and strategic relevance of corporate heritage identity as a resource for corporate marketing. The article provides a normative framework of actionable categories of activities related to the management and implementation of substantive corporate heritage identity dimensions.     

The contribution of trout fly fishing to the economy of Rhodes,North Eastern Cape,South Africa

Recent government legislation, which calls for the eradication of trout from ecosystems where they may cause harm, could damage the tourism appeal of many South African catchments. However, no South African studies have tried to quantify the economic impact of removing trout from rivers and streams. This study aimed first to value the Rhodes trout fishery, North Eastern Cape, South Africa, and second to assess whether the trout fly fishing industry in Rhodes could form the foundation for the implementation of a local economic development initiative. Overall, the study found that the trout fishing industry directly generates approximately R5 658 240 per annum, and sustains a minimum of 39 direct job opportunities for the community of Rhodes, and can therefore provide the impetus for the creation of a tourism-based local economic development programme.     

Do unemployment benefits promote or hinder job reallocation?

According to recent and largely untested theories, unemployment benefits (UBs) could improve the extent and quality of job reallocation even at the cost of increasing unemployment. In this paper, we use a new set of yearly panel data from a large number of countries to evaluate empirically the relationship between unemployment benefits and job reallocation. Unlike previous work assessing the effects of UBs on labor market stocks, we focus on flows and rely on policy “experiments,” notably the introduction from scratch of unemployment benefits in many countries. We exploit the longitudinal nature of our data to lessen the potentially important selection, endogeneity, and omitted variable problems. We find a positive, sizable, and significant effect of the introduction of UBs on job reallocation, arising mainly from the job destruction margin although this effect fades away over time. These findings appear to be robust to changes in the countries in the sample, control variables or estimation methods. We discuss to what extent our results are consistent with equilibrium matching models with or without endogenous sorting of workers into jobs providing entitlement to UBs and stochastic job matching.     

Markov decision processes under model uncertainty

We introduce a general framework for Markov decision problems under model uncertainty in a discrete-time infinite horizon setting. By providing a dynamic programming principle, we obtain a local-to-global paradigm, namely solving a local, that is, a one time-step robust optimization problem leads to an optimizer of the global (i.e., infinite time-steps) robust stochastic optimal control problem, as well as to a corresponding worst-case measure. Moreover, we apply this framework to portfolio optimization involving data of the . We present two different types of ambiguity sets; one is fully data-driven given by a Wasserstein-ball around the empirical measure, the second one is described by a parametric set of multivariate normal distributions, where the corresponding uncertainty sets of the parameters are estimated from the data. It turns out that in scenarios where the market is volatile or bearish, the optimal portfolio strategies from the corresponding robust optimization problem outperforms the ones without model uncertainty, showcasing the importance of taking model uncertainty into account.     

Optimal insurance under maxmin expected utility

We examine a problem of demand for insurance indemnification, when the insured is sensitive to ambiguity and behaves according to the maxmin expected utility model of Gilboa and Schmeidler (J. Math. Econ. 18:141–153, 1989), whereas the insurer is a (risk-averse or risk-neutral) expected-utility maximiser. We characterise optimal indemnity functions both with and without the customary ex ante no-sabotage requirement on feasible indemnities, and for both concave and linear utility functions for the two agents. This allows us to provide a unifying framework in which we examine the effects of the no-sabotage condition, of marginal utility of wealth, of belief heterogeneity, as well as of ambiguity (multiplicity of priors) on the structure of optimal indemnity functions. In particular, we show how a singularity in beliefs leads to an optimal indemnity function that involves full insurance on an event to which the insurer assigns zero probability, while the decision maker assigns a positive probability. We examine several illustrative examples, and we provide numerical studies for the case of a Wasserstein and a Rényi ambiguity set.