Diminishing effects of location? Some evidence from Swiss municipalities, 1950–2000

This paper analyzes how location has affected, in the second half of the twentieth century, the population growth of 2889 municipalities in Switzerland. The analysis demonstrates the temporal relativity of location attributes, even for small territorial divisions, such as the Swiss cantons. However, we also show that, both absolute and relative location attributes have weakened over time as population growth predictors, apparently due to improving road infrastructures, and growing motorization. The study has been made possible by a detailed historical population and accessibility database available for Swiss municipalities. To the best of our knowledge, no database of such scope and quality is available for any other European country.     

When we are onstage,we smile: The effects of emotional labor on employee work outcomes

A growing body of literature has confirmed the deleterious effects of emotional labor on service employees. The study adds to it by investigating two hypothesized antecedents to emotional labor; affectivity and empathy which is conceptualized as a two-dimensional construct composed of emotional contagion and empathic concern. It also examines the impact of emotional labor on job satisfaction and exhaustion. The results confirmed a two-dimensional structure of emotional labor, emotive dissonance, and emotive effort. Hospitality employees with higher positive affect tend to experience less emotive dissonance while individuals with higher negative affect exert more effort to enact emotional labor. A positive relationship was found between emotional contagion and emotive dissonance, and emotive effort and job satisfaction. The results also suggested a negative relationship between emotive effort and emotional exhaustion. An unexpected negative relationship was found between emotional dissonance and emotional exhaustion. Managerial implications discuss training and acting techniques to more effectively manage employee emotional labor.     

Identifying the strategic market

When are markets truly global? Will Europe be a single market after 1992, and how will we know? When are niche strategies sustainable? In this article, John Kay develops answers to these questions by developing the concept of the strategic market–the minimum area, product or geographical, within which it is possible to compete. He identifies the common strategic error involved in confusing the dimensions of the market with those of the industry, and warns that economic integration is not at all the same as the creation of a single market.     

Cyclical correlations, credit contagion, and portfolio losses

We model aggregate credit losses on large portfolios of financial positions contracted with firms subject to both cyclical default correlation and direct default contagion processes. Cyclical correlation is due to the dependence of firms on common economic factors. Contagion is associated with the local interaction of firms with their business partners. We provide an explicit normal approximation of the distribution of portfolio losses. We quantify the relation between the variability of global economic fundamentals, strength of local firm interaction, and the fluctuation of losses. We find that cyclical oscillations in fundamentals dominate average losses, while local interaction causes additional fluctuations of losses around their average. The strength of the contagion-induced loss variability depends on the complexity of the business partner network.     

Modelling the National Greenhouse and Energy Reporting System's Energy Consumption Under‐Coverage

The new data source for the Australian Energy Statistics, the National Greenhouse and Energy Reporting System, does not require businesses using less than 200 terajoules to report their energy consumption. This results in a data gap in the total industry energy consumption. To estimate the gap, this study models business energy consumption using data from the Australian Bureau of Statistics' 2008–09 Energy, Water and Environment Survey and data from the 2008 to 2009 business activity statement unit record estimates. The article discusses the modelling approaches and methodological issues associated with the estimation of the National Greenhouse and Energy Reporting System's energy consumption under‐coverage. It provides estimation results and suggestions for future research, based on available data.

     

Competition with Congestible Networks

We analyse competition between two network providers when the quality of each network depends negatively on the number of customers connected to that network. With respect to price competition we provide a sufficient condition for the existence of a unique pure strategy Nash equilibrium. Comparative statics show that as the congestion effect gets stronger quantities will decrease and prices increase, under both Bertrand and Cournot competition. In an example with endogenous capacities it turns out that equilibrium capacities are at first increasing and then decreasing in the strength of congestion. Furthermore, capacities are higher under Cournot competition. Welfare comparisons between Bertrand and Cournot competition are unambiguous for fixed capacities, but may turn around for endogenous capacities.     

Non-commitment in performance evaluation and the problem of information distortions

Auditing is modeled in a sequential game without commitment. The manager must decide whether and where to audit a worker's output, taking into account all interim information he has obtained. The worker will work just hard enough (and show it) to divert the manager from making an audit or cover up, withholding information about his work to make an audit more difficult. This usually raises the costs of setting work incentives, so incentives are softened, sometimes drastically. Moreover, when a worker's on-the-job information is valuable for entrepreneurial decisions, work incentives must be softened to improve the internal flow of information.