Maximum efforts in contests with asymmetric valuations

Efforts may be reduced when players with different valuations participate in a contest. This paper considers the problem of designing a contest to elicit maximum aggregate effort from players with asymmetric valuations. Optimal designs for different classes of contest technologies are computed and characterized. A value weighted contest is optimal in the concave case. In the unconstrained case, the optimal contest is equivalent to a first price all-pay auction with a reserve price. The optimal design discounts the effort of the high valuation player in order to induce him to compete vigorously.     

A note on odds in the cattle futures market

This paper investigates the odds of generating a 100-fold return in the cattle futures market. We employ cattle futures data for the period October 11, 1978, through July 31, 1979, to compute the probability of obtaining such a return. The tests are constructed to give the investor the benefit of the doubt whenever doubt exists. The most conservative finding is that the probability is one in approximately thirty-one trillion. Assuming that the return is made in the most efficient way possible, this probability falls to approximately 1.5×10⁻¹⁶.     

Behavioral portfolio selection and optimization: an application to international stocks

The behavioral approach of decision making has emerged as a diversified solution in the presence of risk and uncertainty. Using the popular cumulative prospect theory as an objective function for portfolio selection, this study implements the classical mean–variance model to compare the portfolio performance of high behavioral stocks with that of stocks with lower behavioral values. Based on a sample of 37 international stocks over the period from October 1998 to November 2017, empirical results from D-vine pair copula GARCH-GEV indicate that the portfolio of high behavioral prospect stocks outperforms the portfolio of stocks with low behavioral scores. This finding may suggest that portfolios with high behavioral values coincide with rational efficiency sets.     

Measuring stress in money markets: A dynamic factor approach

We extract an index of interest rate spreads from various money market segments to assess the level of funding stress in real time. We find that during the 2007–2009 financial crisis, money markets switched between low and high stress regimes except for brief periods of extreme stress. Transitions to lower stress regimes are typically associated with the non-standard policy measures by the Federal Reserve.     

Going green,going clean: Lean‐green sustainability strategy and firm growth

Despite the widespread recognition of the paybacks of “going green” and “going clean,” limited research has focused on the impact of lean‐green strategy on firm growth. In this study, we contribute to strategy and environmental sustainability literatures by investigating the possibility that the influence on lean‐green strategy and firm growth is driven by different levels of industry competition, managerial power, and family ties. Using panel data from 732 firms in four major industrialized economies (the United States, Germany, France, and the United Kingdom), we found that lean‐green strategy positively relates to firm growth and this relationship is amplified at higher levels of competition, managerial power, and family ties. Theoretical and practical implications of the study are also discussed.     

Super returns to Super Bowl ads?

This paper uses a natural experiment—the Super Bowl—to study the causal effect of advertising on demand for movies. Identification of the causal effect rests on two points: 1) Super Bowl ads are purchased before advertisers know which teams will play; 2) home cities of the teams that are playing will have proportionally more viewers than viewers in other cities. We find that the movies in our sample experience on average incremental opening weekend ticket sales of about $8.4 million from a $3 million Super Bowl advertisement.     

Producing Localized Commodity Frontiers at the End of Cheap Nature: An Analysis of Eco‐scalar Carbon Fixes and their Consequences

There is no single ‘great’ commodity frontier whose exploitation under current socio‐technical conditions could fuel capital accumulation at the global scale. According to Jason Moore, this represents the ‘end of Cheap Nature’ and signals a terminal crisis for capitalism as we know it. In this article we complicate this assertion by showing how, in the context of global environmental governance frameworks of carbon control, a diverse range of actors situated at multiple scales are intensifying the use of cities and their hinterlands for the production/transgression of localized commodity frontiers. We draw on scholarship on uneven geographical development, state‐led restructuring and eco‐scalar fixes to present two case studies from different segments of the carbon cycle in the global South. The first case demonstrates how the introduction of waste‐to‐energy technology in Delhi facilitated the generation of ‘carbon credits’ while waste matter itself became a commodity. The second discusses attempts by the Brazilian state of Amazonas (Amazônia) aspiring to shift from rainforest exploitation to financialized conservation supported by the ‘green global city’ functions of metropolitan Manaus. These cases demonstrate that although the global carbon‐control regime may enable accumulation, implementation remains speculative, and localized commodity frontiers provoke social resistances that jeopardize their durability.     

Blocked But Not Tackled: Who Founds New Firms When Rivals Dissolve?

Research summary: This article examines the role of competitive shocks in creating opportunities for new firm foundings. I argue that the sudden dissolution of rival firms may release resources that create opportunities for firm formation, particularly among employees facing impediments to capturing value in their current organizations. Analyzing microdata from the legal services industry, I use unexpected deaths of solo‐practicing attorneys as quasi‐exogenous sources of rival dissolution. Results indicate that these shocks increase the odds of founding by about 30%, with stronger effects among attorneys with weaker social connections or higher competition for promotion. The article thus highlights the role that founders play in reallocating dissolved rivals' resources while demonstrating that founding may be an important outlet for “blocked” employees to capture value from opportunities. Managerial summary: This article finds that the shutdown and dissolution of a rival organization may spur employees to found new firms. As a consequence, managers may find it valuable to pay attention to employees' turnover intentions following the dissolution of a rival. Findings suggest that employees who are having trouble advancing in the firm may be the most likely to found a new organization when a rival dissolves, so managers may want to focus retention efforts on these individuals. To the extent that managers wish to capture customers, employees, and other resources that were formerly attached to a dissolved rival, managers may wish to be aware that they could be in competition with their own employees for these resources and opportunities. Copyright © 2017 John Wiley & Sons, Ltd.     

Money,reserves, and the transmission of monetary policy: Does the money multiplier exist?

With the use of non-traditional policy tools, the level of reserve balances has risen in the US from roughly $20 billion before the financial crisis to well past $1 trillion. The effect of reserve balances in macroeconomic models often comes through the money multiplier, affecting the money supply and the bank lending. In this paper, we document that the mechanism does not work through the standard multiplier model or the bank lending channel. If the level of reserve balances is expected to have an impact on the economy, it seems unlikely that a standard multiplier story will explain the effect.