A tale of two audiences: Spectators,television viewers and outcome uncertainty in Spanish football

This paper tests for the impact of match outcome uncertainty on two types of audience for Spanish football, fans at the stadium and television viewers. We find that fans inside the stadium prefer games that are less and not more likely to finish with a close score. This is contrary to much theoretical literature in sports economics which argues that fans prefer close contests and imposes this assumption in formal modelling. We also find that television viewers prefer close contests to more predictable contests. The different preferences of fans inside the stadium and television viewers need to be reconciled by the league when considering the effectiveness of policies to redistribute resources amongst teams in the league. We use our empirical model to consider how this tension might be resolved so as to maximise total audience and total league revenues.     

Using Principal‐Agent Theory to Deal with Output Slippage in the European Union Set‐Aside Policy

This paper proposes modifications to the existing EU set‐aside policy which are designed to alleviate the problem of output slippage associated with heterogeneous land quality by using “incentive‐compatible” mechanisms drawn from principal‐agent theory. Specifically, it is suggested that there should be differential reference yields based on land quality to discourage the “adverse selection” of lower quality land for set‐aside, and that the scope of set‐aside monitoring should be expanded to include both the quantity and the quality of land set‐aside so as to discourage “moral hazard” problems. The potential of these modifications is illustrated using a numerical analysis, which is also used to evaluate the role of a range of factors which determine the set‐aside decision. Finally, an estimate of the “benefits” from reducing slippage required to justify the costs of including these modifications is provided.     

Developing a process for the relative valuation of R&D programmes

This paper addresses the issue of R&D programme prioritisation within a manufacturing company in the aerospace industry, in the context of an overall framework for technology management. A review of approaches to R&D project selection leads into a recent case, which describes how the company developed a practical methodology. The benefits of the process and the relevance of the academic contribution are discussed, leading to a practical checklist for in-company development of a prioritisation process.     

Evaluating horizontal mergers in the presence of price promotions

Quantitative Marketing and Economics - In this paper, I investigate the impact of a horizontal merger between firms that use price promotions. I find that after the merger, the merged firms...     

On stochastic comparisons of minimum order statistics from the location–scale family of distributions

We consider stochastic comparisons of minimum order statistics from the location–scale family of distributions that contain most of the popular lifetime distributions. Under certain assumptions, we show that the minimum order statistic of one set of random variables dominates that of another set of random variables with respect to different stochastic orders. Furthermore, we illustrate our results using some well-known specific distributions.     

Beyond silence or compliance: The complexities of reporting a friend for misconduct

Why do employees fail to report a friend's misconduct, and if they do not report, how else do they cope with this ethical dilemma? Through two field studies, we offer a more nuanced understanding of the range of alternative responses between the extremes of silence (ignoring misconduct) and compliance (reporting), and we illuminate the underlying reasons for these choices. Our results reveal that most employees are inclined to attempt to resolve a friend‐reporting situation themselves, and further, that many employees hesitate to report a friend's misconduct for ethical reasons. Specifically, we show how an ethic of care expressed through empathy for the transgressor may play an important and previously unexamined role in friend‐reporting decisions, drawing attention to the consideration of empathy as a key emotion that can reduce compliance with reporting programmes. In addition to these important contributions to the literature, practitioners should also find this study useful, as it suggests new approaches to help employees better align their choices with the compliance goals of the organisation without sacrificing their valued friendships.     

Robust XVA

We introduce an arbitrage‐free framework for robust valuation adjustments. An investor trades a credit default swap portfolio with a risky counterparty, and hedges credit risk by taking a position in defaultable bonds. The investor does not know the exact return rate of her counterparty's bond, but she knows it lies within an uncertainty interval. We derive both upper and lower bounds for the XVA process of the portfolio, and show that these bounds may be recovered as solutions of nonlinear ordinary differential equations. The presence of collateralization and closeout payoffs leads to important differences with respect to classical credit risk valuation. The value of the super‐replicating portfolio cannot be directly obtained by plugging one of the extremes of the uncertainty interval in the valuation equation, but rather depends on the relation between the XVA replicating portfolio and the closeout value throughout the life of the transaction. Our comparative statics analysis indicates that credit contagion has a nonlinear effect on the replication strategies and on the XVA.     

Analyzing companies' interactions with the Sustainable Development Goals through network analysis: Four corporate sustainability imperatives

The alignment between corporate strategies and the Sustainable Development Goals (SDGs) can be an indicator of long-term sustainability success. But which types of companies are most, and which are least, aligned with the SDGs? This paper scores how 67 economic activities—as a proxy for companies' operations and the goods or services they deliver—interact with 59 SDG targets. It then uses network analysis to define which activities are most and least aligned with the SDG Agenda. The results reveal four types of corporate activities, each having a strategic sustainability imperative: (i) “core activities” predominantly generate positive, while having few negative, impacts on the SDGs, challenging companies to scale their contributions to further align with the SDG Agenda; (ii) “mixed activities” have moderate/high degrees of both negative/positive impacts, posing a decoupling imperative; (iii) “opposed activities” provide few benefits yet cause significant adverse impacts, implying that companies must transform in order to better align with the SDGs; and (iv) “peripheral activities” have immaterial positive and negative impacts, creating an imperative to explore innovative avenues for creating SDG contributions. Detailed network graphs are presented that map companies' interactions with the SDGs and guide the creation of corporate sustainability strategies. Policy implications include the potential for using companies' activities as a lever for adopting a “nexus approach” to the SDGs.