Unifying exotic option closed formulas

This paper aims to unify exotic option closed formulas by generalizing a large class of existing formulas and by setting a framework that allows for further generalizations. The formula presented covers options from the plain vanilla to most, if not all, mountain range exotic options and is developed in a multi-asset, multi-currency Black?CScholes model with time dependent parameters. It particular, it focuses on payoffs that depend on the distributions of the underlyings prices at multiple but set time horizons. The general formula not only covers existing cases but also enables the combination of diverse features from different types of exotic options. It also creates implicitly a language to describe payoffs that can be used in industrial applications to decouple the functions of payoff definition from pricing functions. Examples of several exotic options are presented, benchmarking the closed formulas?? performance against Monte Carlo simulations. Results show a consistent over performance of the closed formula reducing calculation time by double digit factors.     

TEAMWORK AND INTRA‐FIRM WAGE DISPERSION AMONG BLUE‐COLLAR WORKERS

Using data on a sample of manufacturing establishments in Germany, we find that the use of self‐managed teams is associated with increased intra‐firm wage inequality between skilled and unskilled blue‐collar workers. We also show that moderating factors play an important role. While teamwork interacts positively with employer‐provided further training and a production technology of the most recent vintage, it interacts negatively with the age of the establishment and the coverage by a collective bargaining agreement.     

The Introduction of Works Councils in German Establishments — Rent Seeking or Rent Protection?

Some recent empirical studies seem to suggest that German works councils engage in rent-seeking activities rather than in the creation of joint establishment surplus. However, those cross-sectional studies do not address the issue of causation. We address this issue by investigating the factors that influence the employees' decision to introduce a works council in their establishment. Councils are more likely to be adopted in establishments with a very poor sales situation and poor employment growth. They are also more likely to be adopted in establishments where management does not pursue an expansive market strategy. Altogether, our results support the hypothesis that employees introduce works councils to protect the quasi-rents they have created by their efforts and human capital investments.     

Variable Pay,Industrial Relations and Foreign Ownership: Evidence from Germany

We use a representative sample of German establishments to show that those with foreign ownership are more likely to use performance appraisal, profit‐sharing and employee share ownership than those with domestic ownership. Moreover, we show that works councils are associated with an increased probability of using each of the three practices when under domestic ownership but not when under foreign ownership. These results inform the ongoing debate over institutional duality, the extent to which foreign firms adopt uniform practices independent of local institutions, and the extent to which they adapt and participate in those local institutions.     

Entrepreneurial Spawning: Experience,Education, and Exit

We investigate the career dynamics of high‐tech entrepreneurs by analyzing the exit choice of entrepreneurs: to act as a business angel, to found another firm, or to become dependently employed. Our detailed data from CrunchBase indicate that founders are more likely to stick with entrepreneurship as a serial entrepreneur or as an angel investor in cases where the founder had prior experience either in founding other startups or working for a startup, or had a “jack‐of‐all‐trades” education.     

Savings mobilisation in developing countries

Stagnating development aid and continued reluctance on the part of western commercial banks to grant new loans to problem debtor countries have led many developing countries to pay greater attention to the mobilisation of their own resources. This article outlines a strategy for increasing the extent to which domestic savings are made available for development financing.     

Transport costs, intermediate goods, and localized growth

This paper presents a dynamic, two-regional, general equilibrium model in which interregional production and trade patterns are endogenously determined. Localized growth stems from the geographical concentration of an industrial sector exhibiting permanent productivity increases. Geographical concentration is a result of the interaction between local market size and local competition in the differentiated input industry. Regional factor endowment with an immobile factor is decisive for the long-run specialization, trade and growth patterns between the regions if large endowment differences prevail. With equal-sized regions, multiple equilibria exist. Furthermore, we argue that integration might lead to increasing regional concentration of production and innovation.