Estimating food demand in Paraguay from household survey data

We estimate a food demand system in Paraguay based on the 1997 national household survey, considering 12 food categories. To obtain demand elasticity estimates from household survey data accounting for quality effects, measurement errors, and censored observations, price indexes are obtained from ordinary least squares predictions of changes in unitary values caused by spatial and temporal variations, and the two‐step estimation procedure ( Shonkwiler and Yen, 1999 ) is applied. Our approach yields reasonable estimates of combined quantity and quality responses with respect to price. Results suggest distinct consumption behavior in urban and rural areas, particularly for chicken, eggs, dairy, and fats and oils, which are likely because of differences in the food distribution system and availability of nonmarket food sources.     

Renegotiation and Collusion in Organizations

It has been argued that collusion among the members of an organization may lead to inefficiencies and hence should be prevented in equilibrium. This paper shows that whenever the parties to an organization can renegotiate their incentive scheme after collusion, these inefficiencies can be greatly reduced. Moreover, it might not be possible to prevent collusion and renegotiation in equilibrium. Indeed, if collusion is observable but not verifiable, then the organization's optimal incentive scheme will always be renegotiated. If, instead, collusion is not observable to the principal, both collusion and renegotiation will occur in equilibrium with positive probability. The occurrence of collusion and renegotiation should therefore not be taken as evidence of the inefficiency of an organization.     

Forward-looking portfolio selection with multivariate non-Gaussian models

In this study, we suggest a portfolio selection framework based on time series of stock log-returns, option-implied information, and multivariate non-Gaussian processes. We empirically assess a multivariate extension of the normal tempered stable (NTS) model and of the generalized hyperbolic (GH) one by implementing an estimation method that simultaneously calibrates the multivariate time series of log-returns and, for each margin, the univariate observed one-month implied volatility smile. To extract option-implied information, the connection between the historical measure P and the risk-neutral measure Q, needed to price options, is provided by the multivariate Esscher transform. The method is applied to fit a 50-dimensional series of stock returns, to evaluate widely known portfolio risk measures and to perform a forward-looking portfolio selection analysis. The proposed models are able to produce asymmetries, heavy tails, both linear and non-linear dependence and, to calibrate them, there is no need for liquid multivariate derivative quotes.     

Microfinance,subsidies and local externalities

We analyse equilibrium borrowers’ effort and the cost of microcredit loans in the presence of moral hazard, project correlation and subsidies under group lending conditions. Our results show that under the assumption of endogenous effort, project correlation has significant effects on borrowers’ effort only when it is determined by asymmetric (positive or negative) shocks. These findings indicate that the well-known negative effect of within-group (symmetric) project correlation on group lending with joint liability disappears once endogenous effort is taken into account. We also analyse the effects of subsidised lending (and asymmetric correlation) on the relative convenience (in terms of borrowers’ effort) of the alternative (1) between group lending and individual lending with notional collateral and (2) among three different market structures of the microfinance industry.     

Toward a Model of Understanding Strategic Decision‐Making in Micro‐Firms: Exploring the Australian Information Technology Sector

This study explores strategic decision‐making (SDM) in micro‐firms, an economically significant business subsector. As extant large‐ and small‐firm literature currently proffers an incomplete characterization of SDM in very small enterprises, a multiple‐case methodology was used to investigate how these firms make strategic decisions. Eleven Australian Information Technology service micro‐firms participated in the study. Using an information‐processing lens, the study uncovered patterns of SDM in micro‐firms and derived a theoretical micro‐firm SDM model. This research also identifies several implications for micro‐firm management and directions for future research, contributing to the understanding of micro‐firm SDM in both theory and practice.     

Why Do We Buy Traditional Foods?

Consumer behavior toward traditional specialties varies according to the cultural context of consumption. It thus becomes crucial to develop marketing strategies that target segments with different levels of familiarity with food. Our article purposes to analyze the purchase drivers of traditional foods known to consumers because of their reiterated consumption. The importance of the product’s attributes, the purchasing motivations, and the information channels are studied by applying the CUB model, which utilizes a probabilistic structure that simulates the individual’s psychological mechanism in adopting a choice of preference. The case study is that of extra-virgin olive oil in Italy, where this product is a fundamental element of the culinary tradition. The results show that in the ambit of traditional specialties, in contexts of elevated familiarity, the traditional information channels of marketing are less effective and call for strategies based on a more direct connection between consumer and producer.     

Human resource management and productivity in the “trust game corporation”

Contemporary production activity is crucially determined by the performance of complex tasks with the characteristics of corporate trust games. In this paper, we outline a productivity paradox showing that, under reasonable conditions, the noncooperative solution, which yields a suboptimal firm output, is the equilibrium of corporate trust games when relational preferences are not sufficiently high. We show that tournaments and steeper pay for performance schemes may crowd out cooperation in the presence of players preferences for relational goods. These findings help to explain firm investment in workers’ relationships and the puzzle on the less than expected use of such schemes.     

Voting with the wallet

The vote with the wallet is a new, emerging feature of economic participation and democracy in the globally integrated market economy. This expression identifies the pivotal role that responsible consumption and investment can play in addressing social and environmental emergencies which have been aggravated by the asymmetry of power between domestic institutions and global corporations. In this paper, we examine (both in general and by using examples drawn from the financial and non-financial sectors) how ??voting?? for producers which are at the forefront of a three-sided efficiency which reconciles the creation of economic value with social and environmental responsibility may generate contagion effects by triggering ethical imitation of traditional profit-maximizing actors, thereby enhancing the production of positive social and environmental externalities. Within this new framework, policies that reduce the search and information costs of voting with the wallet may help socioeconomic systems to exploit the bottom-up market forces of other-regarding preferences, thereby enhancing opportunities to achieve well-being with reduced top-down government intervention.     

Profits and Fractal Properties: Notes on Marx,Countertendencies and Simulation Models

There are new reasons for revisiting Marx’s elaboration on the rate of profit because contemporary debates provide findings from the MEGA Project, long-term data on the rate of profit, and tools for dealing with complexity and non-equilibrium systems. This article proposes that the interplay between the tendency and the countertendencies of the rate of profit to fall can be translated into a simple system of equations, one based on each chapter of Section Three of Capital—as if Marx sought to mathematically formalise his insights. This article reviews previous debates, presents data and runs a simulation model, showing that the rate of profit behaves as fractals.