Audits,Reputation, and Repeated Interaction in a Capital Budgeting Setting

This experimental study investigates the use of audits as a control instrument in capital budgeting processes and factors that contribute to audit efficiency (or inefficiency) in a repeated relationship. We disentangle reputational aspects of superiors and subordinates from an increased social content in repeated relationships. In settings where subjects face new counterparts every round, we find that reputational aspects strongly affect the superiors' and subordinates' behavior. This leads to a decrease in slack and an increase in the superior payoff. However, in a repeated relationship with an increased level of social content, these benefits are no longer present. In fact, the subordinates' ability to retaliate against their superior for prior punishments in the repeated setting by reporting more slack in later rounds has negative effects on the use of audits and decreases audit efficiency. These findings imply that, in repeated relationships, social factors play an important role and might impair the disciplining effects of audits.     

Mindestlohn: Warnung vor massiven Arbeitsplatzverlusten wenig fundiert — eine Replik

This article by Jürgen Kromphardt argues against the view that the introduction of a legal minimum wage of €8.50 per hour for all jobs will result in a massive reduction of jobs. He finds the theoretical foundation of this forecast very shaky, because the assumptions of this model are not fulfilled in the real world. It is thus unsurprising that empirical analyses do not corroborate it. Groll and Kooths respond that neither demand-side market power in the labour market nor supply-side price-setting capacity in the goods market are sufficient reasons to justify the introduction of minimum wages. They reiterate the major arguments both in the narrow environment of a static market model and in a more enriched framework that puts human action in the centre of economic analysis. They also show that topping up low incomes within the German ALG II transfer system can hardly be considered a wage subsidy.     

Regulierung, Bildung und Wohlstand — der IW-Regulierungsindex

Education is considered as a key factor for the future development of an economy. Therefore, a well-designed education system is indispensable for a society to maintain or increase its welfare. The regulation of the education system is one of the main tools to which a government has recourse in order to infl uence the system. By using the regulation index created by the Cologne Institute for Economic Research (Institut der deutschen Wirtschaft (IW) K?ln), it is possible to quantify this regulation and to identify positive or negative trends. The authors show that a higher extent of regulation usually correlates with negative economic performance. In terms of education, the results indicate that a higher extent of regulation has a negative impact on the labour market, threatening sustainable long-term development of the economy.     

A careful re-examination of seasonality in international stock markets: Comment on sentiment and stock returns

In questioning Kamstra, Kramer, and Levi’s (2003) finding of an economically and statistically significant seasonal affective disorder (SAD) effect, Kelly and Meschke (2010) make errors of commission and omission. They misrepresent their empirical results, claiming that the SAD effect arises due to a “mechanically induced” effect that is non-existent, labeling the SAD effect a “turn-of-year” effect (when in fact their models and ours separately control for turn-of-year effects), and ignoring coefficient-estimate patterns that strongly support the SAD effect. Our analysis of their data shows, even using their low-power statistical tests, there is significant international evidence supporting the SAD effect. Employing modern, panel/time-series statistical methods strengthens the case dramatically. Additionally, Kelly and Meschke represent the finance, psychology, and medical literatures in misleading ways, describing some findings as opposite to those reported by the researchers themselves, and choosing selective quotes that could easily lead readers to a distorted understanding of these findings.     

Vinyl record: a cultural icon

In this paper, we use the case of the vinyl record to show that iconic objects become meaningful via a dual process. First, they offer immersive engagements which structure user interpretations through various material experiences of handling, use, and extension. Second, they always work via entanglements with related material ecologies such as turntables, speakers, mixers, and rituals of object care. Additionally, these engagements are complimented by a mediation process which emplaces the vinyl historically, culturally, spatially, and also politically, especially in the context of digitalization. This relational process means that both the material affordances and entanglements of vinyl allow us to feel, handle, experience, project, and share its iconicity. The materially mediated meanings of vinyl enabled it to retain currency in independent and collector’s markets and thus resist the planned obsolescence and eventually attain the status of celebrity commodity with totemic power in music communities. This performative aspect of vinyl markets also means that consumers read closely the signals and symbols regarding vinyl’s status, as its various user groups and champions try to interpret its future, protect, or challenge its current position. Vinyl’s future, and the larger expansion of pressing plants and innovative turntable production around it, largely depend on processes of cultural and status mobility. In the current phase of market expansion, vinyl’s status might be challenged by its own success. Neither a fashion cycle phenomenon, nor simple market conditions explain vinyl’s longevity. Rather, cultural contextualization of vinyl as thing and commodity is crucial for avoiding symbolic pollution and retaining sacred aura.     

Game Outcome Uncertainty and Television Audience Demand: New Evidence from German Football

Despite its prominence in the economic literature, our knowledge regarding the role of game outcome uncertainty (GOU) in spectator decision‐making is fairly limited. Even worse, studies testing the uncertainty of outcome hypothesis (UOH) by exploring TV demand for European football have further intensified the original ambiguity. In this paper, we revisit the role of GOU in spectator decision‐making by testing the UOH with regard to two different sporting products: (1) domestic league and (2) knockout tournament games. Analyzing TV demand for almost 1,500 German football games, we find support for the UOH in league, though not in knockout tournament games.     

The Impact of Competitiveness on Consumer Responses to Comparative Advertisements

We examine the impact of consumers' competitive tendencies on responses to comparative advertising appeals and the underlying role of schadenfreude: pleasure derived from the misfortunes of others. Consistent with our theory that the depiction of others' misfortunes is compatible with more-competitive consumers' concerns for distinguishing themselves via competition, our studies show that comparative ads are associated with greater schadenfreude, as well as more favorable attitudes and a greater willingness to pay (WTP), among more- (versus less-) competitive consumers. Further results indicate that such relatively more favorable responses among consumers with greater competitive tendencies are limited to comparative ads depicting misfortunes involving brands whose choice is more deserving of failure (i.e., lower-quality brands). Importantly, even less-competitive consumers are revealed to respond favorably to comparative ads and to experience more schadenfreude when they are assured that they will not suffer the depicted misfortune.     

Creativity under the gun

If you're like most managers, you've worked with people who swear they do their most creative work under tight deadlines. You may use pressure as a management technique, believing it will spur people on to great leaps of insight. You may even manage yourself this way. If so, are you right? Not necessarily, these researchers say. There are instances where ingenuity flourishes under extreme time pressure--for instance, a NASA team within hours comes up with a primitive but effective fix for the failing air filtration system aboard Apollo 13. But when creativity is under the gun, it usually ends up getting killed, the authors say. They recently took a close look at how people experience time pressure, collecting and analyzing more than 9,000 daily diary entries from individuals who were working on projects that required high levels of creativity and measuring their ability to innovate under varying levels of time pressure. The authors describe common characteristics of time pressure and outline four working environments under which creativity may or may not flourish. High-pressure days that still yield creativity are full of focus and meaningful urgency--people feel like they are on a mission. High-pressure days that yield no creativity lack such focus--people feel like they are on a treadmill, forced to switch gears often. On low-pressure days that yield creativity, people feel like they are on an expedition--exploring ideas rather than just identifying problems. And on low-pressure days that yield no creative thinking, people work on autopilot--doing their jobs without engaging too deeply. Managers should avoid extreme time pressure when possible; after all, complex cognitive processing takes time. For when they can't, the authors suggest ways to mollify its effects.     

Social marketing: the family planning experience

The authors explore social marketing applications in the Louisiana model of statewide program for family planning. The marketing concept has 4 major elements: 1) consumer orientation; 2) social process; 3) integrated effort; 4) profitable operation. Success of program and continued growth are the results of defining services needed by consumer; determining market target; taking services to customer; and emphasizing concept of selling family planning rather than giving free birth control method. Another important facet is the recognition of many participants--community agencies, the church, the American Medical Association, funding sources, and hospitals. This project used anyaltical marketing tools and defined services as human services rather than the narrow family planning services. It also extended activities to multinational environment and adapted the product offering to meet these needs.