Informational Contagion of Sudden Stops in a Global Games Framework

This paper highlights the cross-country spread of self-fulfilling financial crises through an informational channel. It sets up a two-country framework of investment with strategic complementarities and incomplete information about economic fundamentals. Each market may be subject to sudden stops, triggered by agents preemptively withdrawing their investments for fear others do so. After observing a massive capital outflow from one country, agents downgrade common fundamentals, and therefore have higher requirements regarding factors specific to the other country. This in turn may induce a crisis in the latter, which is not justified by idiosyncratic events or economic interdependence.     

Heterogeneity and peer effects in mutual fund proxy voting

This paper studies voting in corporate director elections. We construct a comprehensive data set of 2,058,788 mutual fund votes over a two-year period. We find systematic heterogeneity in voting: some funds are consistently more management-friendly than others. We also establish the presence of peer effects: a fund is more likely to oppose management when other funds are more likely to oppose it, all else being equal. We estimate a voting model whose supermodular structure allows us to compute social multipliers due to peer effects. Heterogeneity and peer effects are as important in shaping voting outcomes as firm and director characteristics.     

THE EMERGENCE OF FREELANCER COOPERATIVES IN SOUTH KOREA

This paper examines freelancer cooperatives that have recently emerged in South Korea. In particular, it investigates the reasons why freelancers have established cooperatives and what conditions are required for freelancer cooperatives to increase their work. A review of the extant literature on the manner in which freelancers have to organize, as well as case studies regarding freelancer cooperatives, shows that freelancer cooperatives have emerged in order to reduce members' job uncertainty and to reduce time variance of projects assigned to a freelancer. Based on an analysis of freelancers’ organizational characteristics relative to entrepreneur cooperatives and worker cooperatives, we propose that the freelancer cooperatives are a hybrid between entrepreneur cooperatives and worker cooperatives. This paper also proposes the conditions required for development of freelancer cooperatives and suggests how those are distinguished from traditional entrepreneur cooperatives.     

The Determinants Of The Adoption Of Advanced Manufacturing Technology

The paper investigates empirically the decision of firms to adopt ‘Advanced Manufacturing Technologies’ (AMT) based on a comprehensive specification of a ‘rank model’ of technology adoption using firm-level data for Swiss manufacturing. The explanatory variables include numerous dimensions of (anticipated) benefits from and costs of technology adoption allowing for uncertainty as well as for information and adjustment costs. Moreover, the effect of complementarities between various functional groups of AMT (design, fabrication, communication, etc.) as well as of learning from the use of previous technology vintages within such functional groups is analyzed, Finally, the size-dependence of the adoption decision is studied in detail. The model yields a quite robust pattern of explanation across estimates with different adoption variables (time period of introduction of AMT, intensity of use of AMT, etc.) with plausible differences of the results based on the alternative adoption measures used.     

The choice of control devices in franchise chains

This article provides evidence on the determinants of the intensity in the use of three control types employed in franchise relationships: outcome-, behavior- and social-based control systems. This is accomplished by the integration and testing of two approaches, the agency and organizational theories. The results support the predictions of both theories for control strategies in franchise chains, and so it appears that the agency and organizational views are complementary in the field studied. The findings also show the existence of substitutabilities between the control types studied, and so such control types constitute a system of interdependent elements.     

The role of clustering,cooperation and complementarities in the visitor attraction sector

Cooperation and complementarity are important but understudied components of tourism clusters, in general, and of the tourist attraction sector, in particular. This paper addresses product similarities, in general, and thematic similarity, in particular, in the context of spatial proximity and clustering among tourist attractions. These relationships are examined by exploring cooperation between tourist attractions in two tourism clusters in Cornwall, UK. Interviews with attraction managers and other key informants, and case studies, reveal that tourist attractions have established cooperative–complementary relationships of production based on external economies at both the local and the regional scales. Differences between the two clusters in terms of interviewees' perceptions of the relationships between factors indicate the importance of understanding the specific features of individual clusters.     

Dynamic coordination games

Summary Gains from coordination provide incentives for delay. In this paper, the extent of delay is studied in a dynamic,N-person, coordination game. There is no social gain from delay, so an equilibrium with delay is always inefficient. For fixedN, there is no coordination failure when the period length is short: all equilibrium outcomes converge to the Pareto efficient outcome as the period length converges to zero. On the other hand, holding period length fixed, there exist equilibria in which delay is proportional toN, for arbitrarily large values ofN. In addition, it can be shown that the possibility of delay depends on the timing of strategic complementarities. However, under certain conditions, delay is shown to be a robust phenomenon, in the sense that well-behaved equilibria exhibit infinite delay forN sufficiently large.This paper grew out of discussions with Christophe Chamley. While writing it I benefited from discussions with Ken Binmore, Russell Cooper, Bob Rosenthal and Michael Manove. Joe Farrell, Drew Fudenberg, Martin Hellwig and Sawoong Kang made very useful comments on an earlier version that led to substantial improvements. Helpful comments were also made by seminar participants at the London School of Economics, the SUNY at Stoney Brook, the NBER Summer Institute, Northwestern University, and the University of Chicago. I would like to thank Nick Yannelis and an anonymous referee for their editorial advice. Financial support for this research was provided by the National Science Foundation under Grant No. SES 9196061.     

Technological standards with local externalities and decentralized behaviour

We model a situation in which agents must choose between two technologies that operate under local, positive network externalities. We find that decentralized behaviour can lead to the emergence of a technical standard, but can also result in a variety of other equilibria. Policy to eliminate non-standardized equilibria can be effected, but in some cases it may be very costly.     

Conservation practice complementarity and timing of on-farm adoption

The adoption of conservation practices is a dynamic process. Factors that vary over time can affect farmers’ decision to adopt and adoption timing. We used a duration model to evaluate the farmer's adoption time for continuous no-till (CNT), cover crops (CCs), and the variable-rate application of inputs (VRA). We found that producers who had previously adopted soil conservation practices were more likely to adopt additional complementary practices. Farmers using crop rotation adopted CNT and CCs approximately 48% and 62% faster than farmers without a crop rotation, respectively. The CC adoption time was also reduced by 70% for farmers who had adopted CNT. Complementarities between conservation practices may enhance the benefits from adoption and allow farmers to adopt bundles of conservation practices more quickly over time. This can be taken advantage of in conservation programs by promoting or requiring practices first that enhance adoption of other practices. We also found important heterogeneity in the adoption speed associated with farm management characteristics, producers’ attitudes, weather patterns, and crop prices.