Information Cascades in the Labor Market

A model of herding behavior in the labor market is presented where employers receive signals with limited precision about the workers types, and can observe previous employers decisions. Both the employer and the worker can influence the signal probabilities. In particular, the employer tries to increase the precision of the signal about the workers type whereas the worker wants to get a good signal, independent of her type. In a two-period model, we derive conditions for an equilibrium in which only down-cascades occur, i.e., the second employer does not hire a worker with a bad history even if he receives a favorable private signal about the workers type, but he follows his own signal if the workers history is good.     

An input approach to European comparative advantage in advanced products: A study with special emphasis on The Netherlands

Zusammenfassung Eine Input-orientierte Untersuchung der komparativen Vorteile Europas bei fortgeschrittenen Erzeugnissen unter besonderer Berücksichtigung der Niederlande.- Die Autoren zeigen, da\ die EG-L?nder - und besonders die Niederlande - im Laufe der siebziger Jahre den Vorsprung verringerten, den die Vereinigten Staaten ihnen gegenüber in der Verfügbarkeit von Humankapital hatten, das mittelfristig ein wichtiger Produktionsfaktor für eine solide Wettbewerbsposition der fortgeschrittenen Sektoren ist. Dagegen wurde auf dem Gebiet der Forschung und Entwicklung, das für die langfristige Wettbewerbsposition entscheidend ist, der Vorsprung Japans vor den USA und den EG-L?ndern (und besonders vor den Niederlanden) in den siebziger Jahren sogar noch gr?\er. Das sollte bedacht werden, wenn in der EG und vor allem in den Niederlanden z. B. eine Industriepolitik entworfen wird.

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Résumé Une approche d’input des avantages comparatifs européens en biens avancés: Une étude particulièrement sur les Pays Bas. - Les auteurs démontrent que pendant les années soixante-dix les pays CE - et particulièrement les Pays Bas - mitigaient l’avantage des E.U. concernant la disponibilité du capital humain comme facteur essentiel de production pour une solide position compétitive à moyen terme. Regardant recherche et développement comme facteurs essentiels pour la position compétitive à long terme, cependant, l’avance de Japon vis-à-vis les E.U. et les pays CE - et particulièrement les Pays Bas - même s’accr?t dans les années soixante-dix. Ce développement doit être considéré si l’on formule par example des politiques industrielles dans la CE et particulièrement aux Pays Bas.

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Resumen Los insumos en las ventajas comparativas de Europa en productos sofisticados: Un estudio con el énfasis en los Países Bajos. - Los autores demuestran que en los aftos 70 los paises de la CEE, particularmente los Países Bajos, lograron reducir la ventaja que les Uevan los EEUU en cuanto a la dotación con capital humano, que es un factor de producción esencial para llegar an una posición de competencia sólida en el mercado de productos avanzados. En investigación y desarrollo, que constituye un factor crucial para la posición competitiva de largo plazo en este campo, empero, la ventaja que le lleva el Japón a los EEUU y a la CEE y, particularmente, a los Países Bajos llegó a aumentar en los a?os 70. Esto debería ser tomado en cuenta cuando se formulen, por ejemplo, políticas industriales en la CEE y en los Países Bajos en particular.

     

Anchoring Induced Biases in Consumer Price Negotiations

Two studies were conducted with the aim of demonstrating anchoring induced biases in consumer price negotiations.In Study 1, 96 undergraduate students of business administration who were recruited as subjects played the role of buyers of a condominium. All subjects were given the same market information. They were then asked to state whether their reservation price was higher or lower than an arbitrary price example (irrelevant anchor) that for different groups of subjects was either low or high. Finally, subjects indicated their reservation price. As would be predicted if adjustments from the anchor are insufficient, the indicated reservation price was lower when the anchor was low than when it was high.In Study 2, employing 64 undergraduate students of psychology who conducted dyad negotiations about the price of condominiums, the effect of the irrelevant anchor on the initially indicated reservation price was replicated. In addition, an anchoring effect of the seller's initial offer was observed. The results also revealed effects of both irrelevant anchor and initial offer on the purchase price.From a public policy point of view, the results imply that consumers may be strongly influenced by irrelevant anchors provided by sellers. Provision of accurate market price information may however lessen the impact of irrelevant anchors.     

Enlarging the EU: How can the costs be minimised?

Enlargement of the EU will be associated with many costs for all participants— the prospective new members, the old memebers and the EU institutions. A strategy should be pursued that reduces the economic costs as far as possible. This implies a postponement of enlargement until the conditions are more favourable. The author would like to thank Prof. El-Shagi El-Shagi and Dr. Dorothea Witter-Rieder for helful comments on an earlier draft of this paper.     

Evaluation of investment subsidies: when is deadweight zero?

In the evaluation of investment subsidies one of the critical issues concerns the assessment of deadweight, that is, the degree to which projects would have been carried out without grant assistance. With the increasing restrictions on and cuts in subsidies for investment projects in the EU countries maximisation of the impact of the public resources that remain can be achieved through their allocation for projects with minimum deadweight. This paper studies the profile of subsidised zero deadweight investment projects – projects that would be abandoned without public subsidies – in Finland. The empirical analysis is conducted using micro level data on investment projects by private sector firms. The data set comprises 3,423 projects that were granted public investment subsidies between 2001 and 2003. Our results show that the likelihood of zero deadweight is significantly dependent on the characteristics of the subsidised firm, the characteristics of the investment project and the location of the subsidised firm.     

Demokratische Internet-Öffentlichkeit? Ein Vergleich der öffentlichen Kommunikation im Internet und in den Printmedien am Beispiel der Humangenomforschung

The importance of the internet has increased significantly in recent years. The easy access of this »new« medium sparked many hopes for a democratization of the public sphere and of public debate: Many authors argued that the internet will make actors and interpretations of topics visible to those parts of the broader public who are usually marginalized in »old« mass media. In an empirical analysis, we compared print media coverage and internet communication to assess these claims. For the case of human genome research — i.e. a bioscientific topic that reseived extensive media attention in Germany —, we analyzed which actors were given public standing and which frames came to the fore. In contrast to the claims mentioned above, our findings indicate that the debate in the internet does not differ to a significant extent from the offline debate in print media. We could not find a more egalitarian, democratic communication in the internet.