Communication of preferences in contests for contracts

This paper models a contest where several sellers compete for a contract with a single buyer. There are several styles of possible designs with a subset of them preferred by the buyer. We examine what happens when the buyer communicates information about his preferences. If the sellers are unable to change their style, then there is no effect on the welfare of the sellers. If the sellers are able to make adjustments, extra information may either boost or damage the sellers?? profits. While the chance that there will be a proposal of a style preferred by the buyer cannot decrease, the buyer??s surplus may increase or decrease.     

Why banks should keep secrets

Summary. We show that it is sometimes efficient for a bank to commit to a policy that keeps information about its risky assets private. Our model, based upon Diamond-Dybvig (1983), has the feature that banks acquire information about their risky assets before depositors acquire it. A bank has the option of using contracts where the middle-period return on deposits is contingent on this information, but by doing so it must also reveal the information. We derive the conditions on depositors preferences and banking technology for which a bank would prefer to keep information secret even though it must then use a non-contingent deposit contract.Received: 5 November 2002, Revised: 19 December 2004, JEL Classification Numbers: D8, G21, G28.I would like to thank an anonymous referee, Sudipto Bhattacharya, Ed Green, Chandra Kanodia, Andy McLennan, Arijit Mukherji, Bradley Ruffle, Neil Wallace, Warren Weber, and especially Nobu Kiyotaki for useful comments and suggestions.     

Good neighbours matter: economic geography and the diffusion of human rights

Using multi-country panel data, this paper investigates the geopolitical and economic aspects of human rights performance. Human rights performance depends on the relative levels of economic development and spatial proximity to ‘good’ and ‘bad’ neighbours. The paper tests for basic effects of income, and applies spatial weighting models, to analyse the neighbours’ impact on human rights levels, treating this impact as partly endogenous. It takes into account size and distance when comparing each country’s human rights performance with what would be predicted from a weighted average of its neighbours’ performance. There are (1) geographical clusters and (2) size and proximity effects for human rights performance.     

Information acquisition,coordination, and fundamentals in a financial crisis

This paper reconciles the two explanations of a financial crisis, the self-fulfilling prophecy and the fundamental causes, in an empirically-relevant framework, by explicitly modeling the costly voluntary acquisition of information about fundamentals in a variant of Diamond and Dybvig [Diamond, D., Dybvig, P., 1983. Bank runs, deposit insurance, and liquidity. Journal of Political Economy 91, 401–419]. The model exhibits strategic complementarity in information acquisition. In the “partial run” equilibrium investors engage in costly evaluation of projects, so that banks with lower-return projects fail. There also exist the classic “full-run” and “no-run” equilibria in which there is no project evaluation. Investors’ coordination on a specific equilibrium is triggered by a self-fulfilling prophecy. So, financial crises are seen as both fundamentals-based and self-fulfilling prophecies-based phenomena.     

A Cooperative Game Theory of Noncontiguous Allies

This paper develops a cooperative game-theoretic representation of alliances with noncontiguous members that is based on cost savings from reducing overlapping responsibilities and sequestering borders. For various scenarios, three solutions (the Shapley value, nucleolus, and core's centroid) are found and compared. Even though their underlying ethical norm varies, the solutions are often identical for cases involving contiguous allies and for rectangular arrays of noncontiguous allies. When transaction costs and/or alternative spatial configurations are investigated, they may then differ. In all cases the cooperative approach leads to a distribution of alliance costs that need not necessarily coincide with the traditional emphasis on gross domestic product size as a proxy for deterrence value (the exploitation hypothesis). Instead, burdens can now be defined based upon a country's spatial and strategic location within the alliance.     

Ability and specialization among economic researchers

It is not obvious whether a firm's more talented workers should be more specialized, and in fact, the relationship between ability and specialization seems to differ across industries. In this paper, I examine the case of knowledge production in economic research, and find that abler economists tend to publish more general research. This result suggests substitutability between general and specialized skill in research. Copyright © 2008 John Wiley & Sons, Ltd.     

Heritage tourism: A question of age

This research analyzes the demographic characteristics and motivations of the senior and non-senior market segments in selecting a heritage site. By studying how these two groups of individuals select heritage sites, planners will be better able to comprehend what these individuals expect from their visit. A survey consisting of a historic preservationist scale, benefits sought scale, services sought scale, historic site preference scale, and demographic information was mailed to a systematic random sample of 700 travelers requesting tourism information about Virginia. The findings show that many similarities exist between the senior and non-senior market. However, the senior market is more likely to visit a historic site that is less convenient to reach, has fewer facilities, and is more authentic and less developed; while the non-seniors are motivated more by opportunity to escape work overloads.     

Compassion as a neglected motivator for sustainable tourism

Compassion is defined and identified in this paper as a powerful and universal motivator for actions that could help attain sustainable outcomes and enable aspirational forms of sustainable tourism, including just tourism, hopeful tourism and enlightened mass tourism that have not yet demonstrated real-world traction. Despite its potential, compassion has been neglected in the tourism literature. This paper reviews the 50-year quest for a “better tourism”, and presents a compassion-scape as a comprehensive and systematic framework for facilitating sector engagement with compassion. “Context” factors associated with tourism settings (e.g. level of development, purpose) and agents (e.g. mindset, psychographics, motivations) influence “encounter” elements, such as the relationship, type and distress characteristics. Subsequent “response” factors, such as type, recipient, timeframe and intention, influence the “implications” for sustainable tourism, which in turn affect the types of “intervention” (e.g. mindful interpretation, social marketing, faith injunction) implemented to achieve sustainable outcomes. The many innate methodological challenges for the researcher in measuring compassion are discussed, along with the issues involved in operationalizing the compassion-scape to engage and reform alternative tourism forms, notably volunteer tourism, pro-poor tourism, religious tourism and fair trade tourism as well as conventional mass tourism. A paper for the thinking reader.     

Role Stressors and Retail Performance: The Role of Perceived Competitive Climate

Cognitive appraisal theory is used to investigate the influence of perceived competitive climate in the retail store upon the relationship between three role stressors (i.e., role ambiguity, role conflict, and family-work conflict) and job efficacy, job satisfaction, and the self- and supervisor-rated performance of retail professionals. Results indicate that the effect of role ambiguity on job efficacy is moderated by perceived competitive climate, such that the harmful effect of role ambiguity is lessened when competitive climate is high, thus highlighting a potential benefit of stress reduction through an increase in perceptions of competitive climate. In addition, the influence of job satisfaction on supervisor ratings of performance is moderated by perceived competitive climate, such that higher levels of job satisfaction result in improved supervisor ratings when the competitive climate is perceived to be high.     

“Top 10” reasons: When adding persuasive arguments reduces persuasion

Across four studies, we show that experts’ efforts to strengthen the persuasiveness of health and civic duty-related appeals actually weakened them. When designing “Top 10” reasons lists to get people to quit smoking, encourage young people to vote, and persuade individuals to engage in fitness, governmental (studies 1–2) and non-profit (study 3) agencies chose to include mildly strong reasons alongside strong ones in their effort to be as persuasive as possible. However, from the target audience’s perspective, those mildly favorable reasons actually decreased the persuasiveness of the message compared to a condition in which fewer but only highly persuasive reasons were used. Building upon the Presenter’s Paradox by Weaver, Garcia & Schwarz (Journal of Consumer Research 39 (3):445–460, 2012), these results demonstrate that averaging in impression formation occurs not only in targets commonly thought of as unified entities such as consumer products and people but also occurs in persuasion contexts where the individual arguments comprising a message are independent of each other.