Bad news does not always travel fast: evidence from Chapter 11 bankruptcy filings

This paper examines the stock price performances of 275 non‐financial, non‐utility U.S. industrial firms that continue trading on the main exchanges after filing for Chapter 11 bankruptcy between 1 October 1979 and 17 October 2005. This paper identifies a negative and statistically significant post‐bankruptcy drift that lasts for at least 6 months. This finding adds to the literature showing that the market is unable to process bad public news events in a timely manner. Further analysis suggests that the theoretical model proposed by Hong and Stein (1999) can be used to help explain this market‐pricing anomaly.     

Gender segregation and earnings differences in the Spanish labour market

This article analyses the effects of different types of gender segregation on the gender wage differential for the Spanish labour market. Matched employer–employee data from a sample of 226,535 workers are used. These workers are employed in 61 occupations within 26,492 establishments in 51 different industries. Workers belonging to the same industry, establishment or job share common factors which cannot be observed and these factors affect wages. If these unobservable variables are correlated with the explanatory variables, their estimated effects will be biased. For this reason, we estimate the effects of each type of gender segregation on the wage gap using a robust specification to these possible correlations. We obtain that industrial segregation by gender explains a lower part of the wage gap between men and women than previous researches found using standard regressions, while the contributions of establishment segregation and occupational segregation within each establishment are greater.     

Tacit collusion in housing markets: the case of Santiago,Chile

In this article, using a detailed micro-database from Santiago, Chile, the potential existence of tacit collusion in housing markets is investigated. In order to perform the test, Santiago’s housing market is split into four different submarkets using hedonic price analysis and household’s socioeconomics characteristics. Then, using a GMM panel data model, regressions are run for each submarket, correlating industry’s markups with the aggregate level of activity. The main finding is that low and middle income submarkets present higher average markups and a pro-cyclical behaviour. This finding is consistent with a market where participants do not face capacity constraints and behave strategically to sustain tacit collusion during increasing demand periods.     

Individual best response in the repeated Cournot model

We propose a particular style of punishments to support collusive behavior in an infinitely repeated Cournot oligopoly model for at least the same range of discount factors as Friedman’s trigger strategies. The punishment lasts for a finite number of periods and asymmetry is introduced in such a way that each punisher’s output is the individual best response.      

Towards a Theory of Organizational Improvisation: Looking Beyond the Jazz Metaphor

abstract This paper calls for research on organizational improvisation to go beyond the currently dominant jazz metaphor in theory development. We recognize the important contribution that jazz improvisation has made and will no doubt continue to make in understanding the nature and complexity of organizational improvisation. This article therefore presents some key lessons from the jazz metaphor and then proceeds to identify the possible dangers of building scientific inquiry upon a single metaphor. We then present three alternative models – Indian music, music therapy and role theory. We explore their nature and seek to identify ways in which the insights they generate complement those from jazz. This leads us to a better understanding of the challenges of building a theory of organizational improvisation.     

Management Efficiency in Football: An Empirical Analysis of Two Extreme Cases

Analysis of managerial efficiency in sport economics typically focuses on evaluating coach decisions instead of assessing the organization as a whole. This paper studies the relative importance of variables related to power and managerial decisions by estimating stochastic production frontiers models for the Chilean and Italian football leagues. We find that historical and geographical variables intended to capture market size play their expected roles in both Italy and Chile. However, the degree of technical inefficiency is lower magnitude in Chile. This difference could be due to a smaller market size and/or to financial constraints faced by small clubs in this country. Copyright © 2014 John Wiley & Sons, Ltd.     

THE DISTRIBUTION OF MONEY AND PRICES IN SEARCH EQUILIBRIUM*

This article considers a search‐theoretic model of monetary exchange. Agents bargain over both the amount of money and the quantity of goods to be exchanged in bilateral meetings, determining endogenously the distributions of money and of prices. I show that money is neutral if changes in the money supply are accomplished via proportional transfers. However, within the class of lump‐sum transfers, an increase of the rate of monetary expansion tends to decrease the dispersion of wealth and prices and to improve welfare when inflation is low; but when inflation is high enough, the opposite effects occur.     

The Business Cycle Associated with Exchange Rate-Based Stabilizations

This article examines the effects of disinflation on economicactivity in countries characterized by chronic inflation. Suchcountries have a long history of inflation at rates exceedingthose in industrial countries as well as labor and capital marketsthat have adjusted to function in an inflationary environment.A sample of disinflation programs in several Latin Americancountries and in Israel demonstrates that stabilization effortsin countries with chronic inflation often do not induce theusual Phillips curve tradeoff in the medium run. Specifically,stabilization programs that use the exchange rate as the mainnominal anchor are often associated with a business cycle thatbegins with a boom and ends with a recession. Stabilizationprograms that use money supply as the nominal anchor generallyinduce the expected Phillips curve result: lower inflation isaccompanied by a recession after the program is implemented.     

Higher Education in the United States: Laissez-Faire,Differentiation, and Research

The U.S. higher education system stands out in three dimensions. First, it has the highest number of leading research universities. Second, it displays significant differentiation: multiple types of institutions offer services that differ in cost, prestige, etc. Third, it has a laissez-faire/free-market orientation: private and public entities are free to open schools and compete; essentially all schools enjoy substantial autonomy. This paper makes the case that these features are systematically related. The development of the American higher education market—which allowed market forces to operate and lacked centralized planning—contributed to the emergence of differentiation and a set of leading research universities.     

Wild cards, weak signals and organisational improvisation

This paper addresses the need for reliable action guidelines which can be used by organisations in turbulent environments. Building on current conceptual and empirical research, we suggest an analytical approach to the management of surprising and potentially damaging events. In order to do so we propose the wild card management system. Wild cards refer to sudden and unique incidents that can constitute turning points in the evolution of a certain trend. As the first of the two components of such a wild card system, we advocate a weak signal methodology to take into account those wild cards that can be anticipated by scanning the decision environment. The second component, the nurture of improvisation capabilities, is designed to deal with unanticipated ongoing crises. This paper can be seen as part of a broader agenda on how to manage in conditions of continuous but unpredictable change.