The Effect of Communication Media on Cooperation

Abstract. We examine how communication affects cooperation with the help of seven standard public goods experiments that only differ with respect to the medium of pre‐play communication. Our treatments include bidirectional and unidirectional communication via (mostly electronic) auditory and/or visual channels. The results suggest that successful cooperation is attributable to the opportunity of ‘coordinating’ behavior in the communication phase. Furthermore, both the level and the stability of cooperation significantly interact with the communication medium, even though the content of communication is remarkably similar across the communication treatments.     

Does truth win when teams reason strategically?

We study behavior in the race game with the aim of assessing whether teams can create synergies. The race game has the advantage that the optimal strategy depends neither on beliefs about other players nor on distributional or efficiency concerns. Our results reveal that teams not only outperform individuals but that they can also beat the “truth-wins” benchmark. In particular, varying the length of the race game we find that the team advantage increases with the complexity of the game.     

GRADING JOURNALS IN ECONOMICS: THE ABCS OF THE ABDC

Many institutions and governments grade academic journals for the evaluation of research. In this paper, we implement a multi-bibliometric methodology for the evaluation of such a list of journal grades. We examine the grades assigned by the Australian Business Deans Council (ABDC) for over 750 journals in the fields of economics and statistics. Firstly, we generate up to 48 bibliometric-based grades for each journal based on the grade distribution implied by the ABDC. Secondly, we categorize the bibliometrics employing a cluster analysis of an interrater agreement statistic. Thirdly, we present a visualization of the consistency of the grading by journal. Finally, we list those journals where the majority of the matched bibliometrics indicate a higher or lower grade than their ABDC grade.     

Computer knowledge and earnings: evidence for Australia

This paper uses data on wage and salary workers in Australia in 1993 to examine the relation between computer knowledge and earnings. A unique feature of the data set that is used is detailed information on the types and levels of computer skills possessed by individual workers. The main objectives of the study are to contribute to understanding the magnitude and sources of the relation between computer knowledge and earnings. Similar to existing research it is found that there is a large and significant return to computer knowledge, but that the magnitude of the return is substantially reduced in regressions that include detailed occupation controls. Using the detailed information on workers’ computer skills the main finding is that earnings are significantly positively related to the number of types of skills and average level of skills possessed by a worker.     

Cycle and Trend in Models of the Range of Equilibria

This paper investigates the potential of models of the range of equilibria to yield a pattern of equilibrium rates of unemployment that is consistent with the observed mix of cycle with no trend in the rate of unemployment. To do this the paper considers a model in which wages are determined by a group of unionised insiders bargaining with an employer. In the model the supply of labour is endogenous. Specifications of the utility function are found which are consistent with the mix of cycle and no trend in the rate of unemployment. Of these it is concluded that loss aversion in the evaluation of wage relativities is a crucial ingredient for models of the range of equilibria.     

Evidence on real gains in corporate acquisitions

This study examines the change in operating performance of firms which merge for a sample of 324 combinations which occurred between 1967 and 1987. The results indicate that the performance of the merged firms typically improved following their combination. The results are not sensitive to factors such as offer size, industry relatedness between the bidder's and the target's businesses or bidder leverage. Separately, a positive association was found between the abnormal revaluation of the firms involved around the merger and the changes in operating performance observed. We conclude that the results documented in Healy et al. (1992) for a sample of 50 large mergers which occurred during the period 1979 through mid-1984 are not sensitive to sample size or to the period they investigated. The conclusions presented provide additional support for the idea that takeovers are motivated by expectations of improved performance due to the realization of synergistic benefits.     

Inferential methods for elasticity estimates

Elasticities are often estimated from the results of demand analysis. However, drawing inferences from them may involve assumptions that could influence the outcome. In this paper we investigate one of the most common forms of elasticity which is defined as a ratio of estimated relationships and demonstrate how the Fieller method for the construction of confidence intervals can be used to draw inferences.     

A $15 U.S. Minimum Wage: How the Fast-Food Industry Could Adjust Without Shedding Jobs

We consider the extent to which U.S. fast-food businesses could adjust to an increase in the federal minimum wage from its current level of $7.25 an hour to $15 an hour without having to resort to reducing their workforce. We consider this issue through a set of simple illustrative exercises, whereby the US raises the federal minimum wage in two steps over four years, first to $10.50 within one year, then to $15 after three more years. We conclude that the fast-food industry could absorb the increase in its overall wage bill without resorting to cuts in their employment levels at any point over this four-year adjustment period. We find that the fast-food industry could fully absorb these wage bill increases through a combination of turnover reductions, trend increases in sales growth, and modest annual price increases over the four-year period. Working from the relevant existing literature, our results are based on a set of reasonable assumptions on fast-food turnover rates, the price elasticity of demand within the fast-food industry, and the industry’s underlying trend for sales growth. We also show that fast-food firms would not need to lower their average profit rate during this adjustment period.