Cognitive ability and human behavior in experimental ultimatum games

Recent researches have shed light on the effect of cognitive ability on economic decision-making. By measuring cognitive ability applying Raven's progressive matrix test, we obtain two significant results that this effect affects decision-making in two types of experimental ultimatum games. First, the higher the cognitive ability, the larger the amount a sender offers when the offer is smaller than or equal to the half split. Second, the higher the responders’ cognitive ability, the smaller the offer they accept, when they accept it or not with the strategy method. This study not only finds new factors that affect decision-making in experimental ultimatum games, but also provides more evidences that cognitive ability influences economic decision-making.     

Optimal investment and pricing in the presence of defaults

We consider the optimal investment problem with random endowment in the presence of defaults. For an investor with constant absolute risk aversion, we identify the certainty equivalent, and compute prices for defaultable bonds and dynamic protection against default. This latter price is interpreted as the premium for a contingent credit default swap, and connects our work with earlier articles, where the investor is protected upon default. We consider a multiple risky asset model with a single default time, at which point each of the assets may jump in price. Investment opportunities are driven by a diffusion X taking values in an arbitrary region . We allow for stochastic volatility, correlation, and recovery; unbounded random endowments; and postdefault trading. We identify the certainty equivalent with a semilinear parabolic partial differential equation with quadratic growth in both function and gradient. Under minimal integrability assumptions, we show that the certainty equivalent is a classical solution. Numerical examples highlight the relationship between the factor process, market dynamics, utility‐based prices, and default insurance premium. In particular, we show that the holder of a defaultable bond has a strong incentive to short the underlying stock, even for very low default intensities.     

Experimental Multimarket Contact Inhibits Cooperation

We experimentally examine the effect of multimarket contact utilizing 2 × 2 Prisoner's Dilemma games and a strict discount factor control. We find that cooperation rates when participants play both games simultaneously are lower than or equal to when they play each game separately. This finding suggests that experimental multimarket contact may inhibit cooperation.     

Counterfeit, imitation, reverse engineering and learning: reflections from Chinese manufacturing firms

In a previous paper, we developed an alternative perspective on product imitation and innovation. In this paper, we explore some of our research questions using empirical data gathered in China. While we do not condone counterfeit activities, we explore the role of counterfeiting, imitation and learning from the perspective of Chinese manufacturers and provide insight from a small number of key informants about the motives and incentives for non-consensual acquisition of technology and their views on what Western firms should be doing to counteract the threat to their technological advantage. In this paper, we argue that where companies use the technology property of others to develop their own technology capability without the consent of the other party (non-consensual acquisition of technology), firms should consider whether there are opportunities for collaboration before resorting immediately to the legal tools at their disposal to enforce intellectual property rights and seek financial recompense from infringers without due consideration of the learning, new product development and innovation context. We believe that the findings from our case studies can make a significant contribution towards a better understanding of non-consensual acquisition of technology in an innovation context. In particular, the information gained from the key informants provides their perspective on the causes of non-consensual acquisition of technology and their views and recommendations of how companies affected by this behaviour might be able to better handle this problem.     

The labour market impact of body weight in China: a semiparametric analysis

While a positive wage effect of Body Mass Index (BMI) is widely observed in low-income developing countries, a negative wage effect of BMI is often observed in high-income developed countries. To fill the gap between these previous findings, we investigate the relationship between body weight and wages in transition economies. We focus on China, whose rapid economic growth of the 1990s was followed by a rapid increase in overweight and obesity while still experiencing significant food insecurity and underweight. we first use several parametric regression strategies to obtain a consistent estimate of the wage effects of weight. Second, we adopt a semiparametric partially linear model that allows for endogeneity of weight. Parametric regressions provide mixed results, and the sign and magnitude of their estimates are sensitive to the choice of samples and regression strategies. Semiparametric estimates provide evidence of a wage penalty for very heavy and thin persons among both men and women. The wage penalty is more significant among men than among women. Semiparametric results also indicate that parametric estimates can overstate and misrepresent the wage effects of weight for healthy weight persons due to their restrictive functional form assumptions.     

Do poverty and poor health and nutrition increase the risk of armed conflict onset?

We analyze the effects of improving the economic, food security and health status on the risk of armed cotntectflict onset, focusing on the factors related to the millennium development goals. We employ the discrete-time hazard model that allows us to examine the time-varying effects of socioeconomic factors controlling for the reverse effect of conflict. Our results show that income poverty and poor health and nutritional status are more significantly associated with armed conflict onset than GDP per capita, annual GDP growth, and the ratio of primary commodity exports over GDP. In particular, poor health and nutritional status seems to play a key role in inducing armed conflicts in poor countries. These results indicate that, when a majority of the poor and the malnourished resides in rural areas and depends on agriculture directly or indirectly, investments in public goods for agriculture and rural areas can be effective tools to achieve the multiple goals of reduced poverty, food security and armed conflict, including riots in early 2008 triggered by high food prices. Food policy can be an effective element of efforts to maintain stability.     

Farewell to the salaryman? The changing roles and work of middle managers in Japan

The 1990s and 2000s witnessed significant organizational change in Japanese firms and accompanying readjustments to the employment system. Such changes potentially have major implications for middle managers, or salarymen, in Japanese corporations. A survey of human resource managers and middle managers in eight medium sized Japanese organizations pointed to fairly significant, if not radical, change. This did, indeed, impact upon middle managers in those organizations. While the middle managers felt reasonably secure in their jobs, the nature of their jobs had reportedly changed, with a greater range of tasks, work intensification, longer hours, greater stress, more accountability, and a worsening work–life balance.     

Does energy substitution affect carbon dioxide emissions – Income relationship?

Considerable discussion has taken place during the last decade regarding the role of economic growth in determining environmental quality. Using data from 30 OECD countries for the period 1960–2003 and the nonparametric method of generalized additive models, which enables us to use flexible functional forms, this paper examines the environmental Kuznets curve hypothesis for carbon dioxide (CO₂). We find that the reduction of coal share in energy use has a significant effect on CO₂. Our results imply that economic growth is not sufficient to decrease CO₂ emissions.