Unobserved heterogeneity and reserve prices in auctions

This article shows how reserve prices can be used to control for unobserved object heterogeneity to identify and estimate the distribution of bidder values in auctions. Reserve prices are assumed to be monotonic in the realization of unobserved heterogeneity, but not necessarily set optimally. The model is estimated using transaction prices from a used car auction platform to show that the platform enables sellers to capture a large fraction of the potential value from selling their vehicle. Individual sellers benefit mostly from access to a large set of buyers, but the magnitude depends on accounting for unobserved heterogeneity.     

Entry,exit, and the determinants of market structure

This article estimates a dynamic, structural model of entry and exit for two US service industries: dentists and chiropractors. Entry costs faced by potential entrants, fixed costs faced by incumbent producers, and the toughness of short‐run price competition are important determinants of long‐run firm values, firm turnover, and market structure. In the dentist industry entry costs were subsidized in geographic markets designated as Health Professional Shortage Areas (HPSA) and the estimated mean entry cost is 11 percent lower in these markets. Using simulations, we find that entry cost subsidies are less expensive per additional firm than fixed cost subsidies.     

A Free,Open-Source Tool for Identifying Urban Agglomerations using Point Data

This paper describes a software tool for identifying urban agglomerations in low-information settings. The framework outlined in this paper is designed to work using point data. Our tool and all required data are provided free and in open-source format. This paper describes the advantages and disadvantages of using point-based geographies in regional analysis, discusses the practical and ethical challenges of distinguishing urban from rural regions, details the function of our software, and directs the interested reader to the source code. The paper also examines the tool's outputs for Sri Lanka and compares them with published United Nations urbanization figures. Our outputs indicate that Sri Lanka's urban population is significantly undercounted in official statistics.     

The contingent effects of top management teams on venture performance: Aligning founding team composition with innovation strategy and commercialization environment

How does the relationship between founding team composition and venture performance depend on the venture's strategy and business environment? Using data from a novel survey of 2,067 firms, we show that while diverse founding teams tend to exhibit higher performance, this is not universally true. We find that founding teams that are diverse are likely to achieve high performance in a competitive commercialization environment. On the other hand, technically focused founding teams are aligned with a cooperative commercialization environment and when the enterprise pursues an innovation strategy. These results are robust to corrections for endogenous team formation concerns. The findings suggest that ventures cannot ignore founding team composition and expect to later professionalize their top management teams to align with their strategy and environment. Copyright © 2013 John Wiley & Sons, Ltd.     

Is Your Banker Leaking Your Personal Information? The Roles of Ethics and Individual-Level Cultural Characteristics in Predicting Organizational Computer Abuse

Computer abuse (CA) by employees is a critical concern for managers. Misuse of an organization’s information assets leads to costly damage to an organization’s reputation, decreases in sales, and impositions of fines. We use this opportunity to introduce and expand the theoretic framework proffered by Thong and Yap (1998) to better understand the factors that lead individuals to commit CA in organizations. The study uses a survey of 449 respondents from the banking, financial, and insurance industries. Our results indicate that individuals who adhere to a formalist ethical perspective are significantly less likely to engage in CA activities than those following a utilitarian ethical framework. In addition, the results provide evidence that employees with individualistic natures are linked to increased CA incidents, whereas collectivist tendencies are associated with decreases in CA behaviors. Our results also show that collectivism acts as a strong moderator that further decreases the relationships between formalism and CA, and utilitarianism and CA. Finally, we offer detailed suggestions on how organizations and researchers can leverage our findings to decrease CA occurrences.     

The language of US corporate environmental disclosure

We rely on prior work in environmental disclosure and corporate impression management to investigate whether there are self-serving biases present in the language and verbal tone used in corporations’ environmental disclosures. Specifically, we argue that the degree of bias in these narratives varies systematically based on firm environmental performance, hypothesizing that disclosures of worse environmental performers exhibit significantly more “optimism” and less “certainty” than their better-performing counterparts. We test our two hypotheses using a cross-sectional sample of corporate environmental disclosures contained in US 10-K annual reports. Utilizing the content analysis software DICTION to determine “optimism” and “certainty” scores for the disclosures, we find empirical support for both hypotheses. Our study contributes significantly to research in environmental disclosure by investigating bias in the use of language and verbal tone as a tool for managing stakeholder impressions and by finding empirical support for this role. Thus, the language and verbal tone used in corporate environmental disclosures, in addition to their amount and thematic content, should be considered when investigating the relation between corporate disclosure and performance.     

“Resistance is futile”: estimating the costs of managing herbicide resistance as a first‐order Markov process and the case of U.S. upland cotton producers

A 2012 survey of upland U.S. cotton producers was analyzed to determine the factors contributing to changes in weed management costs (WMCs) after the identification of herbicide‐resistant weeds. An ordered probit regression estimated changes in WMC as a first‐order Markov process. The most important determinants of post‐resistance cost increases were initial WMCs, adoption of labor‐intensive remedial practices, and wick application of herbicides. Cultivation and mechanical/chemical‐intensive practices did not increase WMCs. Post‐resistance changes in WMC ranged between $85 and $138 ha^?1, depending on the practices adopted. WMCs increased by $88 ha^?1 when cost‐neutral practices were adopted. The in‐sample aggregate costs of managing herbicide resistance ranged between $25 and $53 million, depending on the types of adopted practices.     

Competition and Regulation of Mobile Money Platforms in Africa: A Comparative Analysis of Kenya and Uganda

Review of Industrial Organization - We analyze the competition issues in mobile money in Kenya–where Safaricom is the market leader–and in Uganda: where the market is duopolistic. We...     

Skilled maintenance trades under lean manufacturing: Evidence from the car industry

This article explores how skilled maintenance trades have fared under lean automotive manufacturing, a cohort of workers relatively neglected in the literature. Historically, such trades possessed a distinct ‘craft consciousness’ derived from apprenticed-acquired skill, autonomy in job execution, strict job boundaries and relative occupational status and prestige. The article assesses how lean has impacted this craft tradition over time, drawing on a case study of one UK car plant to assess its trajectory across three decades. Four different skilled cohorts—electrical, mechanical, control engineers and die maintenance fitters—are examined to gauge respective trends in skill, autonomy, demarcation and status. While the study finds variation in experiences across different trades, the general trend points to a deterioration in work conditions on all four benchmarks of assessment. The article concludes by inferring implications for the future trajectory of skilled trades considering recent accounts provided in Industry 4.0 narratives.