Equilibria in vector lattices without ordered preferences or uniform properness

This paper extends a result by Mas-Colell and Richard (Journal of Economic Theory, 1991, 53, 1–11) on the existence of an equilibrium for exchange economies over a vector lattice to cover non-ordered preferences. Moreover, it is shown that the uniformity requirement in the properness assumption made by these authors can be weakened. Furthermore, it is shown that, as a consequence of properness, an equilibrium allocation which is supported by a discontinuous prices can also be supported by continuous prices.     

Group cooperation of village officials in Chinese rural resettlement: A lab in the field

We examine decisions made by village officials in a public goods game and their impact on villagers' attitudes toward a resettlement project in seven rural villages in China. The data comes from two sources: (i) a laboratory experiment with village officials, and (ii) a survey of villagers. Villages whose officials exhibited more cooperative behavior in the laboratory reported higher support levels from the villagers. We find that teams with higher average contribution levels in the PGG game relayed the resettlement news to their villagers earlier than other teams and also possess greater altruistic preferences.     

Comparing preferences for employing males and nationals across countries: extending relational models and social dominance theory

We expand relational models theory by integrating it with social dominance theory to examine how national culture influences preferences for males and nationals in employment-related decisions. Data from the World Values Survey (N = 2331), culture scores from the GLOBE project (N = 62 countries), and Hofstede (N = 49 countries) indicate that collectivism is associated with an increased chance of preferences for males and nationals, gender egalitarianism is associated with a decreased chance of preferences for males, and masculinity is associated with more chances for preferences for nationals. Demographic variables (age, sex, and education) were also associated with our dependent variables after taking all the variance of the different cultural dimensions into account. Implications for theory and practice are discussed.     

Performance-related reward systems (PRRS) in Japan: practices and preferences in Nordic subsidiaries

An increasing number of companies in Japan have implemented performance-related reward systems (PRRS) due to the demerits in seniority-based reward systems, economic slowdown, increasing global competition, and an aging workforce. This study focuses on reward systems and preferences in foreign subsidiaries in Japan, an area that has been overlooked. In contrast to the convergence view that best practices are universally applicable, interviews conducted in 60 Nordic subsidiaries show that PRRS have faced considerable resistance, while seniority-based reward systems have proved robust, especially in older subsidiaries. Implications for practice and suggestions for future studies are provided.     

Non-separability and sectoral comovement in a sticky price model

This paper resolves the sectoral comovement problem between nondurable and durable outputs that arises in response to a monetary shock in a two-sector sticky price model with flexibly priced durable goods. We analytically demonstrate that the non-separability between aggregate consumption and labor can generate the comovement between nondurable and durable outputs in response to a monetary policy shock. We then estimate the degree of non-separability, together with other parameters, using a Bayesian approach. We find that the non-separable preferences are supported by the data and our estimated model generates the sectoral comovement in response to a monetary shock.     

Inferring monetary policy objectives with a partially observed state

Accounting for the uncertainty in real-time perceptions of the state of the economy is believed to be critical for monetary policy analysis. We investigate this claim through the lens of a New Keynesian model with optimal discretionary policy and partial information. Structural parameters are estimated using a data set that includes real-time and ex post revised observations spanning 1965–2010. In comparison to a standard complete information model, our estimates reveal that under partial information: (i) the Federal Reserve demonstrates a significant concern for stabilizing the output gap after 1979, (ii) the model׳s fit with revised data improves, and (iii) the tension between optimal and observed policy is smaller.     

Potential games with incomplete preferences

This paper studies potential games allowing the possibility that players have incomplete preferences and empty best-response sets. We define four notions of potential games, ordinal, generalized ordinal, best-response, and generalized best-response potential games, and characterize them using cycle conditions. We study Nash equilibria of potential games and show that the set of Nash equilibria remains the same when every player’s preferences are replaced with the smallest generalized (best-response) potential relation or a completion of it. Similar results are established about strict Nash equilibria of ordinal and best-response potential games. Lastly, we examine the relations among the four notions of potential games as well as pseudo-potential games.     

The endogenous formation of an environmental culture

This paper presents a mechanism explaining the surge in environmental culture across the globe. Based upon empirical evidence, we develop an overlapping generations model with environmental quality and endogenous environmental culture. Environmental culture may be costlessly transmitted intergenerationally, or via costly education.The model predicts that for low wealth levels, society is unable to free resources for environmental culture. In this case, society will only invest in environmental maintenance if environmental quality is sufficiently low. Once society has reached a certain level of economic development, then it may optimally invest a part of its wealth in developing an environmental culture. Environmental culture has not only a positive impact on environmental quality through lower levels of consumption, but it also improves the environment through maintenance expenditure for wealth-environment combinations at which, in a restricted model without environmental culture, no maintenance would be undertaken. Environmental culture leads to a society with a higher indirect utility at steady state in comparison to the restricted model.Our model leads us to the conclusion that, for societies trapped in a situation with low environmental quality, investments in culture may induce positive feedback loops, where more culture raises environmental quality which in turn raises environmental culture. We also discuss how environmental culture may lead to an Environmental Kuznets Curve.