Commitment and choice of partner in a negotiation with a deadline

This paper analyses the effects of partially revocable endogenous commitments of a seller in a negotiation with a deadline. In particular, we examine when commitment is a source of strength, a source of inefficiency and when it does not affect the bargaining outcome at all. We show that when commitment possesses a minimum amount of irrevocability this crucially determines the bargaining outcome. In the bilateral bargaining case, commitment becomes a source of inefficiency since it causes a deadline effect. In the choice of partner framework, however, the deadline effect disappears and there is an immediate agreement and, moreover, commitment becomes a source of strength since it increases the seller's equilibrium payoff by triggering off competition between the buyers.     

Union games: technological unemployment

Summary. Given a production economy, we define union games by considering strategic behavior of the suppliers of factors. We refer to the Nash equilibria of this game as union equilibria. We analyze situations where the unemployment of factors is supported as a union equilibrium. The degree of unemployment depends on technological conditions. This allows us to model a source of unemployment which differs from the usual sources provided in the literature. We state a limit result that demonstrates that, as the market power of unions decreases, the corresponding sequence of union equilibria converges to the Walrasian equilibrium, that is, to full employment of factors. We also provide some examples that illustrate the main results.Received: 21 October 2004, Revised: 14 December 2004, JEL Classification Numbers: D51, C72. Correspondence to: Emma Moreno-GarcíaE. Moreno acknowledges financial support from the Research Grant BEC2000-1388-C04-01 (Ministerio de Ciencia y Tecnología and FEDER). G. Fernández de Córdoba and E. Moreno acknowledge financial support from the Research Grant SA091/02 from Junta de Castilla y León. We are indebted to C. Alós-Ferrer, C. Pita, D. Anisi, J. A. Ortega, F. Jimeno, J. P. Torres-Martínez, M. Steinert and C. Hervés for helpful comments and insights. We are particularly grateful to T. Kehoe and an anonymous referee for suggestions that improved this paper.     

Does expenditure in public governance guarantee less corruption? Non-linearities and complementarities of the rule of law

Corruption is an endemic societal problem with profound implications in the development of nations. In combating this issue, cross-national evidence supporting the effectiveness of the rule of law seems at odds with poorly realized outcomes from reforms inspired in the academic literature. This paper provides an explanation for such contradiction. By building a computational approach, we develop three methodological novelties into the empirical study of corruption: (1) modeling government expenditure as a more adequate intervention variable than traditional indicators, (2) generating large within-country variation by means of bottom-up simulations (instead of cross-national data pooling), and (2) accounting for all possible interactions between covariates through a spillover network. Our estimates suggest that, the least developed a country is, the more difficult it is to find the right combination of policies that lead to reductions in corruption. We characterize this difficulty through a rugged landscape that governments navigate when changing the total budget size and the relative expenditure towards the rule of law. Importantly our method helps identifying the—country-specific—policy issues that complement the rule of law in the fight against corruption.

     

Differences Between Short‐ and Long‐Term Risk Aversion: An Optimal Asset Allocation Perspective

This paper studies the long‐term asset allocation problem of an investor with different risk aversion attitudes to the short and the long term. We characterize investor's preferences with a utility function exhibiting a regime shift in risk aversion at some point of the multiperiod investment horizon that is estimated using threshold nonlinearity methods. Our empirical results for a portfolio of cash, bonds and stocks suggest that long‐term risk aversion is higher than short‐term risk aversion and increases with the investment horizon. The exposure of the investment portfolio from stocks to bonds and cash increases with the degree of risk aversion.     

Evidence of different models of socially responsible HRM in Europe

Socially responsible human resource management (SR‐HRM) is becoming increasingly important for academics and managers. The interface between HRM and corporate social responsibility (CSR) is the subject of analysis in this article. It adopts a contextual perspective to analyze whether the institutional context influences the implementation of socially responsible HRM (SR‐HRM). Considering the differences in the national institutional contexts across Europe, this study explores the different models of SR‐HRM in that region. The research is focused on a sample of 153 companies headquartered in Germany, Spain, Sweden, and the United Kingdom. The findings evidence the influence exerted by the national institutional context on the implementation of SR‐HRM. Differences among country clusters suggest the existence of different models of SR‐HRM in Europe. However, these models do not correspond to the blocks on HRM or on CSR identified by the literature but instead provide a novel categorization.     

Distinctive Features of Environmental Innovators: An Econometric Analysis

This paper analyzes the main determinants influencing environmental innovators (i.e. firms developing or adopting environmental innovations) in Spain with respect to non‐environmental innovators. Similarly to other contributions in the literature, our results show that Spanish environmental innovators respond to regulatory stimulus in the form of demand‐pull and technology‐push instruments. They have a high internal technological capability and combine internal and external information sources, mostly in cooperation with knowledge institutions. Environmental innovators are more concentrated in mature, traditionally highly polluting sectors, but new firms are not more environmentally innovative than incumbents. Most importantly, in contrast to other environmental innovation studies, mostly carried out in a German context, we have not found evidence of a market pull from either the domestic or international markets. Furthermore, cost savings are not found to be a distinctive driver for environmental innovators. These differential results are possibly related to the special features of Spain regarding its national innovation system and the degree of stringency of environmental regulation and environmental consciousness of its consumers. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

Tournament Winner Proportion and its Effect on Effort: An Investigation of the Underlying Psychological Mechanisms

This study investigates the effects of the psychological mechanisms activated by different proportions of tournament winners on effort. Using a real-effort experiment that allows the evolution of social comparison, which is central to our theory, we show that firms can increase employee effort (and performance) by increasing the proportion of winners. Based on a causal model, we generate evidence for our theory that this effect is driven by relative performance concerns and bonus concerns, both of which depend on the proportion of tournament winners. In addition, we find that, over time, the change in effort is more negative the lower the proportion of winners. This effect is driven by the different behaviors of winners and losers in a previous tournament.     

Managerial Problem-Solving Styles: A Cross-Cultural Study

ABSTRACT

The literature suggests that North American business-people differ from their Latin American counterparts with respect to specific behavioral traits. Our particular interest is in problem solving and in effecting changes in behavior to achieve better problem-solving capability. The purpose of the present study is to assess whether there are differences in problem-solving styles between two culturally different groups of managers registered in MBA Programs: Anglo American and Latin American. Using Kolb's (1984 2006) Learning Style Inventory, it was found that Anglo American managers tended to be relatively action-oriented, “Convergers” (they emphasize decision-making and use deductive reasoning), while Latin American managers tended to be reflection-oriented, “Assimilators” (they emphasize planning and like to create models in their analyses) in their problem-solving styles. The positive and negative aspects of each style are discussed and suggestions for improved decision-making are offered.

RESUMEN. La literatura sugiere que los empresarios norteamericanos difieren de sus contrapartes latinoamericanos, en lo que atañe a ciertos trazos comportamentales específicos. Nuestro interés particular se orienta a la solución de problemas e implementación de cambios comportamentales, con el propósito de adquirir habilidades específicas para la solución de problemas. El propósito de este estudio es evaluar si existen diferencias entre los estilos empleados para solucionar problemas entre diferentes grupos culturales de gerentes matriculados en Programas MBA angloamericanos y latinoamericanos. Usando el sistema de estilos de Kolb (1984 2006) denominado Learning Style Inventory, descubrimos que los gerentes angloamericanos tienden a orientarse con bastante frecuencia en la acción, los llamados ‘Convergentes’ (que hacen hincapié en la toma de decisiones y el uso del razonamiento deductivo), mientras que los gerentes latinoamericanos tienden a volcarse a la reflexión, los llamados ‘Asimiladores’ (que hacen hincapié enplanear y les gusta crear modelos en sus análisis), como característica de sus estilos para solucionar problemas. Discutimos los aspectos positivo y negativo de cada estilo, y hacemos sugerencias para mejorar la toma de decisión.

RESUMO. A literatura sugere que os homens de negócios norte-americanos diferem de seus colegas latino-americanos em traços comportamentais específicos. Nosso interesse particular recai sobre a resolução de problemas e a introdução de mudanças de comportamento para obter uma melhor capacidade de resolução de problemas. O objetivo deste estudo é avaliar se existem diferenças nos estilos de resolução de problemas de dois grupos culturalmente diferentes de gerentes matriculados em cursos de MBA: anglo-americanos e latino-americanos. Utilizando o inventário LSI (learning style inventory) de Kolb (1984 2006), constatou-se que os gerentes anglo-americanos tendiam a ser relativamente orientados para a ação, “convergentes” (eles enfatizam a tomada de decisões e o raciocínio dedutivo), enquanto os gerentes latinoamericanos tendiam a ser orientados para a reflexão, “assimiladores” (eles enfatizam o planejamento e gostam de criar modelos em suas análises) em seus estilos de resolução de problemas. Os aspectos positivos e negativos de cada estilo são discutidos, e sugestões para melhorar a tomada de decisões são oferecidas.     

Note on the applicability of the VCG mechanism to capacitated assignment problems and extensions

For the allocation of heterogeneous items, it is known that the buyers-are-substitutes condition is necessary and sufficient to ensure that a pricing equilibrium can yield the same allocation and payments as the VCG mechanism. Furthermore, concavity of the corresponding transferable utility TU-game guarantees that this VCG outcome can also be achieved by an ascending price auction. We show that concavity, and hence the buyers-are-substitutes condition, holds for the TU-game of the assignment problem with general capacities. Therefore, the VCG mechanism is supported by a pricing equilibrium which can also be achieved by an ascending auction. We also show that the buyers-are-substitutes condition, and hence concavity, does not hold anymore for very natural and straightforward extensions of this problem. This shows that the necessity of the substitutes property is a considerable restriction on the applicability of the VCG mechanism.     

A legal and economic study of the new Consolidated Text of the Land Use Act of 2008 in Spain

The study conducts a legal and economic analysis comparing the new Consolidated Text of the Land Use Act of 2008 (Texto Refundido de la Ley de Suelo) and the Land Law 6/1998, April 13 now repealed. The study examines various articles contained in the new law and the old law. Although the study analyzes every title in both laws, it focuses on Title III regarding valuations for the expropriation of property owners.