Relative versus Absolute Speed of Adjustment in Strategic Environments: Responder Behavior in Ultimatum Games

Learning models predict that the relative speed at which players in a game adjust their behavior has a critical influence on long term behavior. In an ultimatum game, the prediction is that proposers learn not to make small offers faster than responders learn not to reject them. We experimentally test whether relative speed of learning has the predicted effect, by manipulating the amount of experience accumulated by proposers and responders. The experiment allows the predicted learning by responders to be observed, for the first time.     

A CONTINGENT VALUATION STUDY OF UNCERTAIN ENVIRONMENTAL GAINS

Acid deposition in a present and future cause of biodiversity losses in vulnerable upland areas of Scotland important for nature conservation. However, the exact nature of damages under the status quo, and both the timing and extent of recovery of upland ecosystems if deposition is reduced, are subject to uncertainty. this uncertainty complicates damages cost estimation. In this paper, we have explored the use of CVM to measure the willingness to pay (WTP) of the Scottish population for uncertain recovery/damage scenarios from reduced acid rain deposition. An optimally-designed referendum format was used utilising the distribution of open-ended bids from a pilot study to determine bid amounts and sampling size for each bid amount. Eight explanatory variables, including future damage level were selected in a non-linear step-wise regression analysis. Average household WTP for abatement of acid rain was £247 and £351 per year when faced with low and high future damage levels respectively. Recovery level and recovery time did not significantly influence WTP. When faced with risky outcomes regarding future damage and recovery level, respondent were found to be risk averse to both environmental gains and losses.     

The Effect of Whistle-Blowing Incentives on Collusion: An Experimental Study of Leniency Programs

Policymakers are increasingly using whistle-blowing incentives aimed at curtailing illegal or unethical behavior. We theoretically and experimentally investigate one version of whistle-blowing incentive: leniency programs aimed at curbing anticompetitive activities by firms, by reducing the punishment faced by a cartel member who reports the cartel's behavior. The theoretical model captures the two important effects of whistle-blowing incentives: the direct effect, a reduction in the stability of cartels, and the counterproductive indirect effect, an increase in the incentives to form cartels in the first place by lowering the cost of exiting them. As these point in opposite directions, the net theoretical effect is indeterminate. Our laboratory experiment compares two leniency programs—full immunity from fines and partial immunity—against a baseline with no whistle-blowing incentives in place. We find evidence of the direct effect but not the indirect effect, and thus both programs reduce the extent of price fixing and the damage associated with it.     

A Framework for a Dynamic Organizational Memory Information System

Organizational memory information systems (OMIS) implement important aspects of organizational memory with the aim of enhancing organizational effectiveness. We propose a 3-layered framework for a dynamic OMIS. The framework consists of a pragmatic layer to support the actual activity, a conceptual layer to store the concepts inherent in that activity, and a process layer to store the experience of performing that activity. Both the conceptual and process layers represent organizational memory repositories in the form of respective models. The implementation of OMIS assumes that any activity is the instantiation of relevant conceptual and process models and includes the reuse of knowledge stored in association with those models. In this way, organizational memory is always mapped to current activity, and its adequacy is constantly evaluated. This provides the potential for the models to evolve as a direct result of the current activity. A partial implementation of this framework to support epidemiological research is illustrated.     

The value impact of name changes evidence from Chinese firms during the technology boom

For a sample of US stocks in the period 1998–1999, Cooper, Dimitrov, and Rau (2001) report dramatic value increases in the 10 days around the announcement of dotcom name changes. We find much smaller value changes for a sample of Chinese listed firms with changes to internet-related dotcom names for the 1998 to 2002 period. This result is surprising given the high proportion of retail trading in China and the prohibition to short sell Chinese stocks. Also in contrast to Cooper, Dimitrov, and Rau (2001), we find that most of the value increase for our sample firms is realized gradually prior to the announcement. Further investigation reveals that our sample firms experience more frequent CEO-turnover, significant increase in return-on-assets, and involve more restructure activities around the name change event. These results suggest that the value increases for firms with name changes are the consequence of substantial and successful operational changes, and that the name change is simply part of that process, instead of the cosmetic effects of name change or investor mania suggested by previous studies.     

Rural versus urban preferences for renewable energy developments

Development of renewable energy resources, such as wind farms and hydro-electric schemes, are being promoted as a new method of expanding and diversifying employment in rural areas. However, such energy projects are associated with a range of environmental impacts which might be detrimental to other economic activities, such as those based on nature tourism. The authors use a Choice Experiment to quantify peoples' preferences over environmental and employment impacts that may result from the deployment of renewable energy projects in rural areas of Scotland, focussing in particular on any differences between the preferences of urban and rural dwellers, and on heterogeneity within these groups. Rural and urban households are shown to have different welfare gains which are dependent on the type of renewable energy technology and on the scale of project under consideration.     

Confidence in formal institutions and reliance on informal institutions in Bosnia and Herzegovina

This article uses survey data to investigate the relationship between citizens’ confidence in formal institutions and reliance on informal institutions in Bosnia and Herzegovina (BiH). We find an endogenous substituting relationship and that the different institutional structures currently existing in the two entities in BiH are significantly linked to respondents’ confidence in formal and reliance on informal institutions. In addition, perceptions of higher indirect costs of institutions and a lack of their improvement are associated with a lower confidence in formal and a greater reliance on informal institutions; the minority ethnic groups in each region are less confident in formal and rely more on informal institutions compared to the majority group; and more reliance on informal institutions is found amongst males and respondents from urban areas.