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.     

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.     

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.     

The structure of sustainability research in marketing, 1958–2008: a basis for future research opportunities

Recent changes in the business environment have prompted marketing scholars to pay particular attention to sustainability as a topic of inquiry. Despite the progress made in the study of sustainability, there is a paucity of research on the topic in premier marketing journals. To address this issue, we focus on marketing-related journals and assess the intellectual structure of sustainability research in detail. Drawing on social network theory, we perform an extensive co-citation analysis using multidimensional scaling to examine 76,342 citations made in 1,320 sustainability-focused articles from 36 journals over 51 years (1958–2008). This study specifies that the topics of citizenship behavior, stakeholder theory, corporate performance, and the triple bottom line are integral sustainability research areas. In addition, the results indicate five required topics for examining sustainability in the marketing context: external-internal focus, social-environmental emphasis, legal-ethical-discretionary intent, marketing assets, and financial performance. Supported by the capabilities-based resource perspective, the sustainability-focused typology and framework advanced provide directed structure for future research.     

Economic Integration and Model Building

A certain amount of economic integration between countries of the North American continent is widely accepted as an appropriate compromise between complete integration and complete independence. There are, however, important inter- and intra-regional considerations. Methods for studying economic integration are proposed based on linear programming models. Two models are outlined for testing the consequences of economic integration on agriculture .
L'inTÉGRATION ÉCONOMIQUE ET LA CONSTRUCTION DES MODÈLES:
Un certain montant d'intégration économique entre les pays du continent de l'Amérique du Nord est grandement accepté comme compromis entre une intégration compléte et une indépendance complète. On s'intéresse, par conséauent, à plusieurs considérations inter- et intra-régionales. Des méthodes pour étudier l'intégration économique sont discutées et deux modèles sont suggérés pour prédire des conséquences pour l'agriculture de l'intégration économique .     

EVALUATING DEMAND FOR DEER HUNTING: A COMPARISON OF METHODS

This study compares two methods of estimating hunters' demand for deer hunting in an area in Southwest Manitoba. Benefits to hunters are calculated from estimated demand using the concept of consumers' surplus. Methods used to estimate demand are: (1) a travel-cost approach and (2) an interview on hunters' willingness to pay for hunting. The results from the two methods are not identical. Likely reasons for this and suggestions for further research are discussed. Although the two methods probably measure different things and may be subject to different errors, it is felt that use of both methods provides a useful check on the validity of results
Cette étude compare deux méthodes d'estimation de la demande de la chasse au chevreuil dans un terrilore donne du sud ouest Manitoba. En utilisant le principe de l'excédent aux consommateurs, les bénifices aux chasseurs sont déduits à partir de la demande estimée. Les méthodes utilisées afin d'estimer cette demande sont: (1) le coût de transportation, et (2) une entrevue afin de sonder le degré d'acceptance de payer pour chasser. Les résultats obtenus par ces deux méthodes ne sont pas identiques. Les raisons probables de tels résultats et les suggestion apportées en vue de recherches futures y sont discutées. Malgre que ces deux méthodes calculent probablement des entilés différentes et q'elles sont sujettes a des erreurs differentes, l'on croit que utilisation de pair de ces méthodes apporte une vérification fort utile de la validité des résultats     

The Hot Versus Cold Effect in a Simple Bargaining Experiment

In this paper, the strategy method's impact on behavior in sequential bargaining games is investigated. Besides the decision procedure (hot versus cold), we varied the second mover punishment costs (high versus low). Significant impacts of both treatment variables were observed. For example, second movers punished significantly more often in the hot version of the low cost game. Furthermore, first mover behavior was significantly different in the hot and cold versions of both games. In the hot games, first mover behavior suggests an expectation of decreased rewards and/or punishments from second movers. We observed, however, no decrease in reward and an increase in punishment. The hot cold variable only informs first movers that the decision procedure used by second movers has changed. Therefore, first mover behavior must be shaped by their perceived assessment concerning how second movers make decisions. We argue that first mover behavior can be explained by the interaction of two well-known psychological effects: the consensus and positive self-image effects.     

A Real Options Approach to Economic Exposure Management

Exchange rate volatility is not only a source of concern for firms but also of profit opportunities. If adjustment costs and lags are low, managers can adjust their input or output decisions to raise the firm's expected profits. Notwithstanding the resulting higher profit variability, the actual risk perceived by the managers may fall as they are probably more averse to downside risk—such as financial distress—than to risk in general. Hence, this paper argues that optimal economic exposure management consists of exploiting the upward profit potential of real exchange rate volatility, while keeping downside risk under control. It is shown that option theory provides useful new principles for economic exposure management by bringing out the crucial role of adjustment costs.