A theory of social license when regulatory pressure is jointly produced by an EPA and an NGO

We develop a model in which social pressure on a firm to behave well is jointly produced by a state regulator (EPA) and an NGO. The EPA and NGO differ in how they trade-off business versus environmental interests and also have access to different instruments in pursuit of their objectives. In particular, while the EPA will typically have the tools for detecting misbehaviour, the NGO can influence the intensity of social hostility directed towards those found to have misbehaved. EPA and NGO efforts may be strategic complements or substitutes, depending upon circumstances. We present a taxonomy of outcomes in the game between EPA and NGO in the spirit of Fudenberg and Tiroles’s (Am Econ Rev Pap Proc 74(2):361–366, 1984) classic taxonomy of business strategies. We also consider strategic delegation from NGO supporters to an NGO that has tastes over environmental and business interests different to their own.     

The role of cognitive ability and personality traits for men and women in gift exchange outcomes

We examine the role of cognitive ability and personality traits in a gift exchange experiment. Controlling for cognitive ability and personality characteristics, men offer higher wages than women, and men and women with greater cognitive ability and greater agreeableness on the Big Five personality scale offer higher wages as well. Men provide greater effort than women do, and respond to higher wage rates with greater increases in effort. For both genders, one standard deviation increases in agreeableness and in wages generate similar increases in effort. Serious biases arise from omitting cognitive ability and pooling men and women.     

Equilibrium selection in similar repeated games: experimental evidence on the role of precedents

We report on an experiment examining behavior and equilibrium selection in two similar, infinitely repeated games, Stag Hunt and Prisoner’s Dilemma under anonymous random matching. We are interested in the role that historical precedents may play for equilibrium selection between these two repeated games. We find that a precedent for efficient play in the repeated Stag Hunt game does not carry over to the repeated Prisoner’s Dilemma game despite the possibility that efficient play can be sustained as an equilibrium of the indefinitely repeated game. Similarly, a precedent for inefficient play in the repeated Prisoner’s Dilemma game does not extend to the repeated Stag Hunt game. We conclude that equilibrium selection between similar repeated games may have less to do with historical precedents and might instead depend more on strategic considerations associated with the different payoffs of these similar repeated games.     

The deep roots of economic development in the U.S. states: an application of Putterman and Weil (2010)

The “Deep Roots” literature investigates the effects of ancient cultural variables on economic outcomes. We extend Putterman and Weil’s (Q J Econ 125(4):1627–1682, 2010) inquiry into the effects of State History and Agricultural History to the economic output in ethnically and racially diverse fifty U.S. States. The ethnic and racial differences across the populations of the fifty U.S. states vary considerably due to historical immigration and slave flows that, as a result, produced radically different State History and Agricultural History scores across the states. Results derived from Putterman and Weil’s methodology do not robustly predict per capita levels of economic output across U.S. States. We also investigate the institutions channel, and find that they impact some measures of institutions, but they do not impact the quality of economic institutions which may be essential for promoting economic growth and development.     

Integrated bio-economic models as tools to support land-use decision making: a review of potential and limitations

Bio-economic modelling has become a useful tool for anticipating the outcomes of policies and technologies before their implementation. Advances in mathematical programming have made it possible to build more comprehensive models. In an overview of recent studies about bio-economic models applied to land-use problems in agriculture and forestry, we evaluated how aspects such as uncertainty, multiple objective functions, system dynamics and time have been incorporated into models. We found that single objective models were more frequently applied at the farm level, while multiple objective modelling has been applied to meet concerns at the landscape level. Among the objectives, social aspects are seldom represented in all models, when being compared to economic and environmental aspects. The integration of uncertainty is occasionally a topic, while stochastic approaches are more frequently applied than non-stochastic robust methods. Most multiple-objective models do not integrate uncertainty or sequential decision making. Static approaches continue to be more recurrent than truly dynamic models. Even though integrating multiple aspects may enhance our understanding of a system; it involves a tradeoff between complexity and robustness of the results obtained. Land-use models have to address this balance between complexity and robustness in order to evolve towards robust multiple-objective spatial optimization as a prerequisite to achieve sustainability goals.     

Interethnic relations,informal trading networks,and social integration: imitation,habits, and social evolution

The ethnically homogeneous middleman groups (EHMGs), which are informal trading networks, are ubiquitous in less-developed economies where the legal infrastructure for contract enforcement is not well developed. This paper develops a formal model of social interaction among members of the EHMG as well as in more general situations in a multi-ethnic or multi-cultural society consisting of identifiable ethnic or linguistic groups. Behavioral patterns are transmitted between generations and altered via imitation in social contacts. The model demonstrates how different discriminatory behavioral patterns can evolve and persist over time. One result is that the trust between such groups can increase due to a higher frequency of inter-group contacts. In concluding the paper, we speculate about how the model can be expanded to include changes in legal structures, especially contract law. This could lead to an increase in the trust between the different groups.     

How many educated workers for your economy? European targets,optimal public spending,and labor market impact

This paper studies optimal taxation schemes for education in a search-matching model where the labor market is divided between a high-skill and a low-skill sector. Two public policy targets - maximizing the total employment level and optimizing the social surplus - are studied according to three different public taxation strategies. We calibrate our model using evidence from thirteen European countries, and compare our results with the target from the Europe 2020 Agenda for achievement in higher education. We show that, with current labor market characteristics, the target set by governments seems compatible with the social surplus maximization objective for some countries, while being too high for other countries. For all countries, maximizing employment would imply higher educational spending than that required for the social surplus to reach its maximum.     

Capital asset pricing model in Portugal: Evidence from fractal regressions

We examine risk profiles of the Portuguese stock market index component stocks using a novel approach to the classical capital asset pricing model (CAPM). Specifically, we estimate the CAPM via fractal regressions that allow studying the marginal effects at selected scales. In this way, we can reveal whether the risk is perceived differently by market participants with different investment horizons. Apart from the analysis itself, we provide new statistical insights into the issue of separating and comparing the scale-specific effects with statistical validity. We find several stocks deviating from an expected risk perception homogeneity across investment horizons. This is true for both analysed periods, i.e. before and after the global financial crisis. There are also several stocks that changed their relationship to the market portfolio in between, which has strong implications for possible portfolio construction. The proposed methodology is not limited to financial topics but can be used in any discipline where the scale-specific marginal effects might be of interest.     

Rekommunalisierung versus Neukonzessionierung der Energieversorgung

The current trend back to municipal utilities (??remunicipalisation??) in the German energy system shows very different approaches and variants in the real cases. Converting the distribution network from privately-owned distribution companies to municipally-owned entities often forms the starting point of such restructuring processes. Ecological or regional development motivations are at the forefront of public debates. The authors emphasize the importance of energy economic aspects of this problem. Advantages and disadvantages of remunicipalisation projects depend strongly on the specific regional circumstances. Important factors are the potentials for cooperation and expansion of the business activities. Moreover, the price which has to be paid for taking over the network infrastructure has to be taken into account as the decisive parameter: The price for buying or renting the network and the possible revenues on the backdrop of incentive-based regulation define the economic viability for the municipality. Many of the often heard arguments pro remunicipalisation, such as the objective of decentralized energy supply, labour effects and municipal contributions to climate protection, do not fully convince in the end; as well the fiscal status of many municipalities in Germany is severe. Nonetheless remunicipalisation must not be rejected in general because there is no general proof for welfare losses resulting from these projects. In fact, it depends mainly on local influencing factors to what extent municipalities should be or become active in the field of energy supply. Among the most important aspects the preferences of the citizens, the environmental and political aims of the municipality (so far they are defined) and the available resources of the municipal decision making persons and bodies must be mentioned. However, in economic terms the leeway for the municipality remains restricted by the costs of operating the network and tariff regulation.     

An Empirical Analysis of the Average Plant Start-Up Size in Turkish Manufacturing Industries

Many studies have found start-up size of a firm to be an important determinant of its subsequent performance and probability of survival. The aim of this study is to investigate the determinants of average plant start-up size in 51 four-digit Turkish manufacturing industries for the period 1993?C1999. The results of the study suggest that while industry characteristics such as industry growth rate and capital intensity have a positive impact on the average plant start-up size, industrial concentration, import penetration, and the change in research and development expenditures are negatively associated with the same variable. In addition, the macroeconomic environment is also an important determinant of the choice of plant start-up size. Finally, we find evidence that may indicate ??following?? (herd) behavior in Turkish manufacturing industries.