Implementation of optimal contracts under adverse selection

This paper studies a 2-agent, 2-type principal-multiagent model of adverse selection under the assumption that the agents each have complete information. We construct a mechanism implementing the first-best contracts in Nash equilibrium that: satisfies a condition related to individual rationality, is renegotiation-proof, has a small-sized message space, achieves unique implementation and satisfies undomination of Nash equilibrium strategies. Moreover, we prove that other requirements which relate to individual rationality (different from the one satisfied by our mechanism) are not compatible with implementation of the first-best contracts. Received: 27 July 1998 / Accepted: 26 May 2000     

The European response to the challenge of the Japanese steel industry (1950–1980)

Between 1950 and 1980, the European delay with respect to Japan and the relative loss of competitiveness in the integrated steel industry was due to an institutional, geographical and economic logic based largely on historical factors. Europe had a long steel-making history that was closely related to its sources of raw materials. The new technological paradigm turned this former advantage into a clear disadvantage, while the large investments made in the Thomas and open hearth processes and the affordable price of scrap delayed the adoption of the Basic Oxygen Furnace (BOF) until its superiority had been clearly demonstrated. The European steel industry was not at the forefront of the transformation, but merely adapting to the changes, pushed by the threat of a new uncomfortable competitor.     

Economic crisis and benefits of the Internet: differentiated Internet usage by employment status

Using data from the Spanish Survey on Equipment and Use of ICTs in Households for 2007–2011, this paper evaluates the effect of employment status on the diffusion of the Internet among the labor force. We use a bivariate probit with sample selection model to account for a potential selection bias that arises because online usage is only observed for Internet users. Our results show that, controlling for income, employment influences online adoption and usage, and we find evidence of a digital divide in adoption and usage by education and age among the labor force. Employed individuals are more likely to have accessed the Internet and used it more frequently than the unemployed and for different activities. However, conditional on adoption, they do not use the Internet for more personal activities. These findings suggest that firms promote and subsidize Internet access, but this sponsored access does not translate into more personal use.     

A Study of Why Anomic Employees Harm Co-workers: Do Uncompassionate Feelings Matter?

Although anomic feelings have been found to lead employees to unethical performance, little is known about why this relationship is possible. The aim of this study is to test a compassion-based explanation of why anomic employees harm co-workers by displaying interpersonal deviance. The prediction is made that once sociological anomie (from the Greek, an-: absence, and -nomos: law) enters organizations in the form of employees’ private feelings of anomie—i.e., “anomia”—, this anomia will individually move staff to be uncompassionate in the workplace. Three uncompassionate feelings toward co-workers are then hypothesized to mediate the relationship between anomia and interpersonal deviance: (i) negative judgments about others, (ii) over-identification, and (iii) isolation. Data were collected from 280 employees at ten hotels in the Canary Islands (Spain). The results indicated that (a) anomia was significantly and positively linked to uncompassionate feelings and interpersonal deviance, (b) but only negative judgments about others mediated the anomia effects on interpersonal deviance. Findings suggest to managers that by spreading ethical standards that discourage negative judgments about others in the workplace, they can neutralize the mechanisms leading anomia to interpersonal deviance.     

Entrepreneurial Narratives in Sustainable Venturing: Beyond People,Profit, and Planet

Sustainable venturing, the process of starting a new sustainable enterprise, has been studied extensively through the triple‐bottom‐line lens. The narratives employed by sustainable entrepreneurs, however, have proven to be more complex and diverse. In this paper, we set out to inductively explore the narratives underlying sustainable venturing. We conducted an interpretative analysis to elucidate how these entrepreneurs perceive, think about and give meaning to sustainability as they develop their ventures. Findings allow for an expansion of the role of narratives in business venturing toward a more sophisticated conceptualization grounded in how actual entrepreneurs experience and enact sustainability in the context of their ventures.     

Do Unfair Procedures Predict Employees’ Ethical Behavior by Deactivating Formal Regulations?

The purpose of this study was to extend the knowledge about why procedural justice (PJ) has behavioral implications within organizations. Since prior studies show that PJ leads to legitimacy, the author suggests that, when formal regulations are unfairly implemented, they lose their validity or efficacy (becoming deactivated even if they are formally still in force). This “rule deactivation,” in turn, leads to two proposed destructive work behaviors, namely, workplace deviance and decreased citizenship behaviors (OCBs). The results support this mediating role of RD, thus suggesting that it forms part of the generative mechanism through which unfair procedures influence (un)ethical behavior within organizations. The author ends the article by discussing behavioral ethics and managerial implications as well as suggestions for future research.     

Identifying the factors that influence eWOM in SNSs: the case of Chile

ABSTRACT

The factors that influence electronic word-of-mouth (eWOM) in social networking sites (SNSs) in Latin American countries still need to be understood. This paper looks at factors included by prior research, as well as two new factors that have the power to influence eWOM in SNSs in the region. The study is conducted in Chile, a country which already has high Internet and SNSs penetration rates and Hofstede's scores close to the average for Latin America. The results show that tie strength, normative influence, informational influence, self-presentation, and voluntary self-disclosure are all positively directly associated with eWOM in SNSs. The results also show that homophily exerts a positive indirect influence on eWOM through the mediators of tie strength, normative influence, informational influence, and self-presentation. Additionally, the results show that trust exerts a positive indirect influence on eWOM through the mediators of tie strength, normative influence, and voluntary self-disclosure.     

Beyond cash-additive risk measures: when changing the numéraire fails

We discuss risk measures representing the minimum amount of capital a financial institution needs to raise and invest in a pre-specified eligible asset to ensure it is adequately capitalized. Most of the literature has focused on cash-additive risk measures, for which the eligible asset is a risk-free bond, on the grounds that the general case can be reduced to the cash-additive case by a change of numéraire. However, discounting does not work in all financially relevant situations, especially when the eligible asset is a defaultable bond. In this paper, we fill this gap by allowing general eligible assets. We provide a variety of finiteness and continuity results for the corresponding risk measures and apply them to risk measures based on value-at-risk and tail value-at-risk on L ^p spaces, as well as to shortfall risk measures on Orlicz spaces. We pay special attention to the property of cash subadditivity, which has been recently proposed as an alternative to cash additivity to deal with defaultable bonds. For important examples, we provide characterizations of cash subadditivity and show that when the eligible asset is a defaultable bond, cash subadditivity is the exception rather than the rule. Finally, we consider the situation where the eligible asset is not liquidly traded and the pricing rule is no longer linear. We establish when the resulting risk measures are quasiconvex and show that cash subadditivity is only compatible with continuous pricing rules.