institutional determinants of power sector reform in pakistan the electricity supply sector in pakistan has performed poorly in recent years reforms were introduced in the mid 1990s to improve the sector but progressed slowly with no significant impacts on pre reform performance this study uses new institutional economics as a theoretical basis to elucidate reasons for the failure of power sector reforms in pakistan to make improvements interviews with 23 experts using q methodology generated 215 statements that were used as a q concourse of these 51 statements were selected for the q sample and ranked by 34 respondents depending on their importance analysis revealed four important discourses on the determinants of power sector reform failure in pakistan these included weak governance structure country and sectoral endowments inefficient regulator and unspecified political institutions or unfriendly political contexts the study recommends establishment of institutions that support a market based power supply sector and improvements to the contractual arrangements between stakeholders to reduce opportunistic behaviour

post normal science in practice a q study of the potential for sustainable forestry in washington state usa abstract some ecological economists have advocated participatory decision methods in which people act as citizens rather than consumers as an epistemologically preferable alternative to a price based valuation approach for determining the disposition of ecosystems q method is a research technique advocated by proponents of discursive democracy to assess the self described attitudes of participants in discourse around a particular topic techniques that attempt to discern public values around ecological systems without imposing contrived e g only monetary or unintentionally biased frameworks can be seen as advancing ecological economics as a post normal science understanding the attitudes of groups involved in conflict over ecosystem use is crucial for designing policies that have a chance of being implemented as well as being equitable and sustainable thus the use of q method is an essential step for supporting successful public participation in decisions affecting ecosystem sustainability this paper reports the results of a q study designed to ascertain 1 the potential to find a common basis for cooperation among groups with a long history of conflict over forest management issues in the pacific northwest of the united states and 2 the extent to which current science pertaining to sustainable forest ecosystem management is commonly understood among these same actors participants were asked to rank 64 statements about forest management in the region including definitions of sustainable forestry on a scale of 4 strongly agree to 4 strongly disagree thirty people with a wide variety of backgrounds and experience with forest issues performed this q sort and then were interviewed to provide context for their answers the individual q sorts were correlated and factor analyzed to derive ideal discourse types three distinct discourses about sustainable forestry emerged from the factor analysis results indicate a strong desire across stakeholder groups to engage in participatory decision making with people from all sides of the issues there also appears to be a lack of consensus about the exact meaning of sustainable forestry and a lack of familiarity with scientific concepts of ecosystem resilience among some groups recommendations for additional ways in which q method can be applied by ecological economists as a practical means of advancing the field as a post normal science are described in the concluding section

seeking sustainability discourses with q methodology abstract this paper outlines the potential benefit of q methodology for the study of environmental issues within ecological economics based on research into lets local employment and trading systems in the united kingdom q methodology is a qualitative but statistical approach to enable the discovery of a variety of discourses concerning how individuals understand their behaviour and how they understand the social and environmental worlds in which they live q methodology thus has the capacity to allow a more effective form of policy making and implementation process the paper introduces some of the basic tenets of q methodology illustrates these with results drawn from the study mentioned above and concludes by indicating the potential this methodology holds for ecological economics research

a major in science initial beliefs and final outcomes for college major and dropout taking advantage of unique longitudinal data we provide the first characterization of what college students believe at the time of entrance about their final major relate these beliefs to actual major outcomes and provide an understanding of why students hold the initial beliefs about majors that they do the data collection and analysis are based directly on a conceptual model in which a student s final major is best viewed as the end result of a learning process we find that students enter school quite optimistic about obtaining a science degree but that relatively few students end up graduating with a science degree the substantial overoptimism about completing a degree in science can be attributed largely to students beginning school with misperceptions about their ability to perform well academically in science copyright 2014 oxford university press

persistence of interindustry wage differentials a reexamination using matched worker firm panel data we estimate interindustry wage differentials using new french longitudinal data that allow a tracking of workers and their firms over time we find that when measured on a cross sectional basis they primarily reflect the interindustry variations in unmeasured labor quality however interindustry wage differentials are only a minor component of interfirm wage differentials the average differential in wages paid to the same workers by different firms is about 20 30 in a given industry wage policies are more favorable to workers in large capital intensive firms

constrained after college student loans and early career occupational choices abstract in the early 2000s a highly selective university introduced a no loans policy under which the loan component of financial aid awards was replaced with grants we use this natural experiment to identify the causal effect of student debt on employment outcomes in the standard life cycle model young people make optimal educational investment decisions if they are able to finance these investments by borrowing against future earnings the presence of debt has only income effects on investment decisions we find that debt causes graduates to choose substantially higher salary jobs and reduces the probability that students choose low paid public interest jobs we also find some evidence that debt affects students academic decisions during college our estimates suggest that recent college graduates are not life cycle agents two potential explanations are that young workers are credit constrained or that they are averse to holding debt we find suggestive evidence that debt reduces students donations to the institution in the years after they graduate and increases the likelihood that a graduate will default on a pledge made during her senior year we argue this result is more likely consistent with credit constraints than with debt aversion

payments for pioneers revisiting the role of external rewards for sustainable innovation under heterogeneous motivations abstract acknowledging the diversity of preferences goals and motivations of individuals is key to promote the effectiveness of incentive based conservation interventions this paper analyses the heterogeneity of motivations to adopt silvopastoral practices a social ecological innovation for soil conservation and carbon emission reduction we use q methodology to identify smallholders views with regard to these practices in a community in the forest frontier in chiapas mexico the analysis uncovers three main perspectives self sufficient pioneers environmentally conscious followers and payment dependent conservatives we discuss these perspectives around three topics smallholders predisposition to adopt silvopastoral practices their views about needing external payments to sustain their livelihood and the diffusion of innovative sustainable practices we relate these perspectives with livelihood characteristics and with observed adoption levels under a pilot programme to promote silvopasture our findings suggest that incentives other than payments may be more appropriate for those more likely to adopt and that payments could encourage rent seeking strategies and not necessarily promote permanent behavioural change we suggest ways for designing more effective and adaptive environmental conservation programmes to foster adoption and continuation of social ecological innovations

value based adaptation to climate change and divergent developmentalisms in turkish agriculture there is an increased recognition and attention on human values with respect to their role in shaping climate change adaptation policies furthermore as the recent literature suggests values held by policy actors are centrally located in the debates linking adaptation to development however different values tend to give way to diverging adaptation policy preferences which often appear as a dichotomy of adjustment incremental change versus transformation this study enquires the assumptions and values in adaptation policy by using q methodology and advances value based approach to adaptation policy with an empirical case from turkey a developing country with key vulnerabilities in its agricultural system by exploring the narratives of 29 policy actors who participated in the making of turkey s climate change adaptation strategy the analysis suggests that assumptions regarding an economic growth driven development agenda often shape adaptation concerns further analysis of the 4 emerging discourses productivism techno managerialism eco localism and authoritarianism suggests that while discourses agree that the ultimate goal of adaptation is safeguarding a developmentalist vision in agriculture they differ on the means and agents for reaching this goal i argue that this divergence can enhance the transformative potential of adaptation by bringing how for whom and why questions back to policymaking

determinants of college major choice identification using an information experiment this article studies the determinants of college major choice using an experimentally generated panel of beliefs obtained by providing students with information on the true population distribution of various major specific characteristics students logically revise their beliefs in response to the information and their subjective beliefs about future major choice are associated with beliefs about their own earnings and ability we estimate a rich model of college major choice using the panel of beliefs data while expected earnings and perceived ability are a significant determinant of major choice heterogeneous tastes are the dominant factor in the choice of major analyses that ignore the correlation in tastes with earnings expectations inflate the role of earnings in college major choices we conclude by computing the welfare gains from the information experiment and find positive average welfare gains

peer effects in financial decision making abstract peer effects might play an important role in complex financial decisions because many consumers lack experience with them and the costs of thinking through such decisions can be very high we study peer effects in retirement savings life insurance purchase and two charitable giving programs in a military setting with plausibly exogenous assignment of individuals to social groups peers defined broadly as social groups which may include members of different ranks appear to play an important role in the charitable giving programs but not in the other outcomes we assess a number of potential reasons for the disparate findings and provide suggestive evidence that the observability of individuals choices is key

on transparency in organizations when is it best for the principal to commit to not disclosing all that he she knows in moral hazard interactions i show that whenever the agent would choose the same action under complete information at several distinct states then full transparency can generically be improved upon this implies that full transparency is generically suboptimal whenever the dimension of the information held by the principal exceeds the dimension of the agent s action in a simple class of problems i make further progress on the best disclosure policy assuming the principal can either disclose fully the state or remain silent

peer effects in medical school abstract using data on the universe of students who graduated from us medical schools between 1996 and 1998 we examine whether the abilities and specialty preferences of a medical school class affect a student s academic achievement in medical school and his choice of specialty we mitigate the selection problem by including school specific fixed effects and show that this method yields an upper bound on peer effects for our data we estimate positive peer effects that disappear when school specific fixed effects are added to control for the endogeneity of a peer group we find no evidence that peer effects are stronger for blacks that peer groups are formed along racial lines or that students with relatively low ability benefit more from their peers than students with relatively high ability however we do find some evidence that peer groups form along gender lines

the firm as a nexus of treaties part 1 knowledge its acquisition sharing and or asymmetry the participatory generation of information rents and the theory of the firm masahiko aoki common knowledge and the co ordination of economic activities jacques cremer profit sharing information and employment matti pohjola part 2 vertical integration and the strategic management of the enterprise what is vertical integration michael h riordan vertical integration transaction costs and learning by using kurt lundgren the firm as a nexus of internal and external contracts torger reve part 3 issues of labour organization the viability of worker ownership an economic perspective on the political structure of the firm henry hansmann intellectual skill and the role of employees as constituent members of large firms in contemporary japan kazuo koike the implicit contract for corporate law firm associates ex post opportunism and ex ante bonding robert h mooking part 4 finance and the political structure of the firm capital structure as a mechanism of control a comparison of financial systems erik berglof long term contracts in financial markets hakan lindgren the principle of external accountability in competitive markets herbert gintis union militancy and plant designs kar ove moene can transaction cost economics explain trade associations marc schneiberg and j rogers hollingsworth

peers at work we study peer effects in the workplace specifically we investigate whether how and why the productivity of a worker depends on the productivity of coworkers in the same team using high frequency data on worker productivity from a large supermarket chain we find strong evidence of positive productiv ity spillovers from the introduction of highly productive personnel into a shift worker effort is positively related to the productivity of workers who see him but not workers who do not see him additionally workers respond more to the presence of coworkers with whom they frequently interact we conclude that social pressure can partially internalize free riding externalities that are built into many workplaces jel j24 l81 m54

oecd organisational discourse peer reviews and sustainable development an ecological institutionalist perspective as part of the recent ideational turn in research on international organisations the study of organisational discourse has gained popularity yet ecological economics has thus far paid little attention to the role of organisations as sites for the discursive battles over the meaning of sustainable development for an international organisation without regulatory powers such as the oecd organisation for economic cooperation and development discourse is the main vehicle for policy influence but it also plays a key role in re defining the organisation s identity and authority the oecd s organisational discourse has been strongly dominated by modern mainstream economics and has given little room for marginalised discourses this paper compares from the perspective of institutionally oriented ecological economics ioee and borrowing from critical discourse analysis the experience from attempts to integrate the concept of sustainable development within two oecd peer review mechanisms the economic surveys and the environmental performance reviews the extent to which the respective conceptions of sustainable development in the two reviews are in line with the principles of ioee and the reasons for the apparent failure of sustainable development discourse to gain foothold within the organisation are analysed

non commitment in performance evaluation and the problem of information distortions abstract 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

occupational choice under uncertainty an econometric problem in estimating models of occupational choice is that the agents forecasts of future wages and occupational tenure are unobservable this paper solves the problem by assuming that agents have rational expectations and by considering the effects of arbitrage both within and between cohorts the solution consists of two time series regressions of the demand and supply functions of entrants into an occupation from these regressions one obtains estimates of the rate of return to education the direct cost of education and other parameters that influence the market the model was estimated with data from the market for lawyers 1 many occupations require the agent to acquire some schooling before he can practice how does the agent choose between two occupations that require different schooling periods since adam smith 17 book i chapter 10 economists have assumed that the agent decides by comparing the expected present value of incomes between the two occupations e g friedman and kuznets 7 schultz 15 becker 1 and mincer 10 see 13 for a survey of the literature while the decision rule is well known the problem of uncertain wages plagues empirical applications of models embodying the decision rule most empirical works rely on cross section data or short panel data sets thus the total wages over the lifetime of the agent are not observed the question of ex ante expectations cannot of course be known short term macroeconomic factors tend to confound estimates of costs and returns to education rosen 13 rosen also raised the question of dropouts that is agents may leave an occupation in which they practiced therefore the question of uncertain wages is complicated by the additional uncertainty of occupational tenure there was an important attempt to solve the problem of uncertain wages by richard freeman 3 4 5 freeman recognized that demand conditions in the market affected the supply of new students he argued that new entrants made their decisions to enter by comparing current wages in the relevant occupations since future conditions may change current wages may not be good predictors of future wages these systematic forecast errors lead to cycles in the supply of new entrants these cyclical models are known as cobweb models this paper also considers the problem of occupational choice under uncertainty an agent s decision problem based on maximizing expected discounted value of income is explicitly solved the result is a generalization of mincer s schooling model 10 i also close the model by positing a demand curve for the

inter industry wage differentials in eu countries what do cross country time varying data add to the picture this paper documents the existence and main patterns of inter industry wage differentials across a large number of industries for 8 eu countries belgium germany greece hungary ireland italy netherlands and spain at two points in time in general 1995 and 2002 and explores possible explanations for these patterns the analysis uses the european structure of earnings survey ses an internationally harmonised matched employer employee dataset to estimate inter industry wage differentials conditional on a rich set of employee employer and job characteristics after investigating the possibility that unobservable employee characteristics lie behind the conditional wage differentials a hypothesis which cannot be accepted the paper investigates the role of institutional industry structure and industry performance characteristics in explaining inter industry wage differentials the results suggest that inter industry wage differentials are consistent with rent sharing mechanisms and that rent sharing is more likely in industries with firm level collective agreements and with higher collective agreement coverage jel classification j31 j41 j51

arm s length relationships without moral hazard i show that cutting the flow of information between a principal and an agent can increase the power of the incentives of the agent to reveal private information jel d23 d82 d86 l20

discursive ethics in ecosystems valuation and environmental policy abstract discursive ethics has its origin in the frankfurt school of critical theory as an applied ethic it is also associated with practical philosophy in this paper discursive ethics is discussed as a conceptual and practical framework for ecosystems valuation and environmental policy the discussion focuses on three main strengths of discursive ethics 1 it offers an integrated process for ecosystems valuation 2 it offers a decision making framework for responding to uncertainty and risk and the reality of action in indeterminacy 3 it offers a process for deconstructing common valuation concepts and identifying conditions for their critical reconstruction the theoretical discussion is followed by a case study example which illustrates the usefulness of discursive ethics in identifying valuation biases hidden behind disciplinary assumptions and conceptual norms these include cultural norms of rationality information biases which consider hard facts over soft values and disciplinary valuation biases which distinguish between hard and soft expert contributions as the case study illustrates a successful application of discursive ethics in ecosystems valuation and environmental policy demands sensitivity to such underlying biases beyond its policy relevance discursive ethics may also offer a framework for an extended peer discourse through which new foci in research and education can be identified

choosing the right pond social approval and occupational choice we model the endogenous emergence of social perceptions about occupations and their impact on occupational choice in particular an individual s social approval increases with his community s perception of his skill in his chosen career these perceptions vary across communities because individuals better assess the skill of those in occupations similar to their own such imperfect assessment can distort choices away from comparative advantage when skill distributions differ across occupations and or correlate positively the community perceives one occupation more favorably this favored sector experiences overcrowding but misallocation occurs across both sectors furthermore a positive skill correlation can produce multiple steady states

the non economics of the nuclear fuel cycle an historical and discourse analysis abstract the development of commercial nuclear power seems irrational while the nature of the nuclear fuel cycle has been well known since the early days of nuclear power the problem of disposing of nuclear waste has only recently become a central area of concern and research also commercial nuclear power has probably never been truly economically competitive as it has received large subsidies it is argued that the rise of nuclear power can be understood through the use of discourse analysis where the discourse of the modernising and interventionist state is well matched to the discourse of nuclear power as offering control and modernity

commitment through renegotiation proof contracts with third parties the paper analyzes contracts as means of strategic commitment that is commitment against outside parties to the agreement it considers the example of an incumbent firm which enters a contractual relationship with its workers in order to deter entry it assumes away the possibility for the parties to precommit not to make pareto improving renegotiations of the agreement once entry has taken place under symmetric information the contract is thus found to be useless for entry deterrence if the incumbent firm or workers possess some private information excessive post entry production levels can however be sustained ex post since output reductions may not be incentive compatible while information asymmetries are usually welfare decreasing when the goal is optimal risk sharing they can thus be welfare improving for the contracting parties when commitment against outsiders is the goal of the contract the role of the renegotiation process as a constraint on sustainable agreements is stressed in the paper and the general relevance of strategic contractual commitment is discussed

strategic ignorance and the robustness of social preferences participants in dictator games frequently avoid learning whether their choice to maximize their own earnings will help or hurt the recipient and then choose selfishly exploiting the moral wiggle room provided by their ignorance however this is found in an environment in which the dictator must actively learn the true payoffs so inaction means ignorance does this effect persist when one must actively choose either to be ignorant or to be informed or when one must actively choose to remain ignorant in fact whereas 45 of dictators remain ignorant when one must click to become informed this drops to 25 when one must click in either case and to 3 when one must click to remain ignorant although the exploitation of moral wiggle room is not merely an artifact it is much like social behavior itself subject to environmental and psychological factors that may reinforce or undermine its impact data as supplemental material are available at http dx doi org 10 1287 mnsc 2014 1989 this paper was accepted by uri gneezy behavioral economics

do peers influence occupational preferences evidence from randomly assigned peer groups at west point abstract there is substantial variation across occupations in outcomes such as earnings job satisfaction and health yet little is known about how occupational preferences are shaped and evolve this paper assesses a channel that may influence occupational preferences peer effects by exploiting unique institutional features and a natural experiment at west point to document the way students i e cadets occupational preferences evolve and to test for peer effects after graduation cadets must enter the u s army as an officer in one of 16 occupational branches and are required to rank order their preferences for the branches repeatedly over four years west point randomly assigns cadets to social groups both at broad company and narrow roommate levels we leverage the timing of the randomization and preference elicitations to test for peer effects at the company roommate and older peer levels with the possible exception of the first few weeks of exposure we find little evidence of peer effects we also use a survey of cadets to explore mechanisms and find evidence that peer information may not be credible in this case but rather cadets rely on mentors and job characteristics when making this decision

linking material and energy flow analyses and social theory the paper explores the potential of habermas theory of communicative action to alter the social reflexivity of material and energy flow analysis with his social macro theory habermas has provided an alternative critical justification for social theory that can be distinguished from economic libertarianism and from political liberalism implicitly most flow approaches draw from these theoretical traditions rather than from discourse theory there are several types of material and energy flow analyses while these concepts basically share a system theoretical view they lack a specific interdisciplinary perspective that ties the fundamental insight of flows to disciplinary scientific development instead of simply expanding micro models to the social macro dimension social theory suggests infusing the very notion of flows to the progress of disciplines with regard to the functional integration of society material and energy flow analyses can rely on the paradigm of ecological economics and at the same time progress the debate between strong and weak sustainability within the paradigm however placing economics at the centre of their functional analyses may still ignore the broader social integration of society depending on their pre analytic outline of research and the methods used

estimating and interpreting peer and role model effects from randomly assigned social groups at west point abstract the random assignment of cadets to social groups at west point provides a rare opportunity to highlight potentially misleading estimates of social group effects found in many studies estimates of contemporaneous group effects in human capital production are typically positive and significant however evidence in this study suggests that occurrences common to a group may account for much of this correlation models that address these biases provide little evidence of group effects in academic performance although there is evidence of group influences in choice outcomes such as the selection of academic major and the decision to remain in the army

credit and efficiency in centralized and decentralized economies we study a credit model where because of adverse selection unprofitable projects may nevertheless be financed indeed they may continue to be financed even when shown to be low quality if sunk costs have already been incurred we show that credit decentralization offers a way for creditors to commit not to refinance such projects thereby discouraging entrepreneurs from undertaking them initially thus decentralization provides financial discipline nevertheless we argue that it puts too high a premium on short term returns the model seems pertinent to two issues soft budget constraint problems in centralized economies and differences between anglo saxon and german japanese financing practices

on the equivalence of general and specific control in organizations most principal agent relationships in firms are multidimensional in the presence of multiple tasks and multiple performance signals the contract between principal and agent not only has to motivate the agent but also has to direct the agent to allocate effort among different tasks the value of efforts for a specific task accrues not only through the principal s expected returns but also through its contribution to overall risk and therefore to the risk diversification of the task portfolio hence if the agent is risk averse multitask relationships can be considered as a portfolio problem coupled with incentive constraints we examine the relationship between specific control sc and general control gc for multitask principal agent problems under sc the principal observes the outcome of each individual task and uses this set of information for compensation under gc contracts are based only on the aggregate signal such as cumulative profits of all tasks we describe two sets of multitask problems for which gc and sc are equivalent that is contracts based only on aggregate performance signals impose the same incentives for the agent as a contract that is based on the outcome of each task the first multitask problem is characterized by homogeneous tasks in the second multitask problem all activities are perfect substitutes in the cost function of the agent the equivalence of sc and gc arises since gc provides insurance to the agent and yields the same overall risk premium as specific control moreover gc allows the principal to set the same incentives as sc since the marginal returns from gc are equal to the sum of the marginal returns for each task under sc the results described in this paper can serve as benchmarks where gc and sc are equivalent we show how the equivalence can be relevant for a variety of business situations such as the compensation of sales persons or managers at all hierarchy levels we also discuss the reasons when gc and sc differ suppose for instance that tasks are technologically separable and the precision of the performance of one task is low then the principal is forced under gc to adopt an incentive scheme that implements only a low effort across all tasks since the average precision matters under sc however the principal can tailor the optimal efforts to each task

transaction network analysis for studying local exchange trading systems lets research potentials and limitations the numerous studies of local exchange trading systems lets have so far been based mostly on qualitative approaches the aim of this paper is to introduce the method of transaction network analysis as an important complement to these studies enabling one to quantitatively describe functioning of lets in terms of the actual flows of currency materialized transactions and topology of the exchange network the types of information markedly missing in most of the existing lets studies we demonstrate the potentials of the method on the case of the lets initiative rozle se based in brno czech republic looking at the transaction flows using the network analysis approach we identify the key members of the group network characteristics of the exchange system and its development over time this allows us not only to provide a complex description of the system but also to simulate certain scenarios e g removal of a key person from the network within the discussion of potentials and limitations of applying transaction network analysis for studying lets and other community currency initiatives e g time banks on a larger scale we also provide a free accessible software tool for doing so and invite other researchers to cooperate on the task

the patent paradox revisited an empirical study of patenting in the u s semiconductor industry 1979 1995 we examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to r d yet the propensity of semiconductor firms to patent has risen dramatically since the mid1980s we explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 u s semiconductor firms during 1979 1995 the results suggest that the 1980s strengthening of u s patent rights spawned patent portfolio races among capital intensive firms but it also facilitated entry by specialized design firms

purchasing sleeping patents to curtail budget padding abstract this paper provides an explanation for sleeping patents based not on their ability to deter external competitors but rather on their ability to discipline actions of the firm s employees by acquiring a patent upfront a firm is able to issue a credible threat that it will switch technologies if a manager s cost budget for the existing technology is too high this threat reduces the manager s propensity to pad budgets

matching with branch of choice contracts at the united states military academy branch selection is a key decision in a cadet s military career cadets at usma can increase their branch priorities at a fraction of slots by extending their service agreement this real life matching problem lls an important gap in market design literature although priorities fail a key substitutes condition the agent optimal stable mechanism is well dened and in contrast to the current usma mechanism it is fair stable and strategy proof adoption of this mechanism benets cadets and the army this new

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

leaving the mainstream behind uncovering subjective understandings of economics instructors roles in the wake of the economic crisis a number of student organizations and researchers highlighted the lack of pluralism and heterodox approaches in economics curricula the relevance of pluralism becomes clear once set within the implications of a given scientific discourse on reality e g economics and policy making this study explores the role of instructors in co constructing the pluralism discourse and debates while recognizing the role of institutional obstacles to change within the discipline an empirical field study is conducted with lecturers in introductory economics courses at the wu vienna university of economics and business where they place themselves within the pluralism discourse via a q study a mixed method employed for studying subjectivity in socially contested topics in q a set of statements undergo a sorting procedure on a relative ranking scale followed by factor rendering four voices are identified moderate pluralist mainstreamers responsible pluralists and applied pluralists the implications of their ideas are discussed from the viewpoint of discursive institutionalism stressing the role of ideas and discourse in institutional change although a discursive readiness for changes towards more pluralism is claimed strategies for overcoming the difficulties on the institutional level need to be developed

managerial legacies entrenchment and strategic inertia this paper argues that the legacy potential of a firm s strategy is an important deter minant of ceo compensation turnover and strategy change a legacy makes ceo replacement expensive because firm performance can only partially be attributed to a newly employed manager boards may therefore optimally allow an incumbent to be entrenched moreover when a firm changes strategy it is optimal to change the ceo because the incumbent has a vested interest in seeing the new strategy fail even though ceos have no specific skills in our model legacy issues can explain the empirical association between ceo and strategy change this paper proposes a model of ceo replacement and puts forward a novel determinant for turnover decisions the legacy potential of a firm s strategy we mean by this the extent to which a manager s decisions affect future firm cash flows potentially beyond the manager s own tenure the replacement of a ceo is arguably one of the most important decisions a firm takes yet the theoretical and empirical finance literature has relatively little to say about the firm and manager specific characteristics that lead to one manager being fired and replaced by another as brickley 2003 points out the only variable that predicts turnover empirically is poor firm performance but it has little pre dictive power theoretical papers on managerial turnover tend to reduce ceo successions to a sequence of static interactions see below for more details as such they do not distinguish between a ceo who is hired and can start a fresh project or one who is constrained in this choice because he inherits a prede cessor s long term strategy our paper focuses on this latter phenomenon and investigates turnover decisions when strategy choices have a legacy potential the fact that a dynamic link exists between a ceo and his predecessor is probably more recognized in the accounting literature than in finance pourciau both authors are from the toulouse school of economics and the institut d administration des

preemption and rent equalization in the adoption of new technology we study the adoption of a new technology to illustrate the effects of preemption in games of timing we show that the threat of preemption equalizes rents in a duopoly but that this result does not extend to the general oligopoly game if the gain to preemption is sufficiently small then the optimal symmetric outcome which involves late adoption is an equilibrium this contrasts with reinganum s result that in precommitment equilibria there must be diffusion we develop a new and richer formalism for modeling games of timing which permits a continuoustime representation of the limit of discrete time mixed strategy equilibria

information expropriation and moral hazard in optimal second source auctions abstract government mandated technology transfers from the developer of a product to a second source offer a potential gain of reduced information rents and procurement costs to provide appropriate incentives technology must sometimes be transferred even when the second source is less efficient than the first additionally when developer moral hazard exists with respect to investments in cost reducing technology the optimal auction will make the developer s success in the auction more sensitive to the developing firm s announced costs

arm s length relationships we show that lowering the cost of acquisition of information that a principal obtains about the performance of an agent may make it more difficult for the principal to commit to threats hence it will weaken incentives and can therefore be counterproductive this phenomenon is explored in a framework where improving the quality of information makes a commitment not to renegotiate less credible applications to the theory of the firm are briefly explored

regulating a monopolist with unknown costs we consider the problem of how to regulate a monopolistic firm whose costs are unknown to the regulator the regulator s objective is to maximize a linear social welfare function of the consumers surplus and the firm s profit in the optimal regulatory policy prices and subsidies are designed as functions of the firm s cost report so that expected social welfare is maximized subject to the constraints that the firm has nonnegative profit and has no incentive to misrepresent its costs we explicitly derive the optimal policy and analyze its properties in their classic papers dupuit 2 and hotelling 5 considered pricing policies for a bridge that had a fixed cost of construction and zero marginal cost they demonstrated that the pricing policy that maximizes consumer well being is to set price equal to marginal cost and to provide a subsidy to the supplier equal to the fixed cost so that a firm would be willing to provide the bridge this first best solution is based on a number of informational assumptions first the demand function is assumed to be known to both the regulator and to the firm while the assumption of complete information may be too strong the assumption that information about demand is as available to the regulator as it is to the firm does not seem unnatural a second informational assumption is that the regulator has complete information about the cost of the firm or at least has the same information about cost as does the firm this assumption is unlikely to be met in reality since the firm would be expected to have better information about costs than would the regulator as weitzman has stated an essential feature of the regulatory environment i am trying to describe is uncertainty about the exact specification of each firm s cost function in most cases even the managers and engineers most closely associated with production will be unable to precisely specify beforehand the cheapest way to generate various hypothetical output levels because they are yet removed from the production process the regulators are likely to be vaguer still about a firm s cost function 12 p 684 as this observation suggests it is natural to expect that a firm would have better information regarding its costs than would a regulator the purpose of this paper is to develop an optimal regulatory policy for the case in which the regulator does not know the costs of the firm one strategy that a regulator could use in the absence of full information about costs is to give the firm the title to the total social surplus and to delegate the pricing decision to the firm in pursuing its own interests which would then be to maximize the total social surplus the firm would adopt the same marginal cost pricing strategy that the regulator would have imposed if the regulator had

inter industry wage differentials job content and unobserved ability the authors estimate inter industry wage differentials using the bureau of labor statistics s national compensation survey ncs dataset the ncs dataset has a number of distinct advantages over ho