the 1985 86 oil price collapse and afterwards what does game theory add this paper focuses on the strategies used by opec to generate cartel profits over the period 1983 90 the evidence supports the hypothesis that opec adopted a swing producer strategy from 1983 to 1985 but when saudi arabia s profits fell below the level of coumot profits in the summer of 1985 it abandoned the role of swing producer driving prices to the cournot level subsequently saudi arabia appears to have adopted a tit for tat strategy designed to punish excessive cheating by other opec members based on these findings the strengths and limitations of game theory are assessed

nonrenewable resource scarcity nonrenewable resource theory often is summarized by hotelling s rule this paper reviews theoretical extensions and empirical investigations of resource extraction models observed data are often inconsistent with the hotelling rule suggesting that other characteristics of nonrenewable resource supply including exploration heterogeneous ore quality technological progress and capital investment are important determinants of the dynamic behavior of resource prices given the persistent recurrence of concern about nonrenewable resource scarcity measures of nonrenewable resource scarcity and the empirical evidence for the time trends of those measures are reviewed finally the implications of nonrenewable resource scarcity for economic growth are examined

social influence and mne strategic response to political risk a global network approach abstract according to the conventional view of mne host country relations mnes faced with political risk condition their strategic responses on each party s relative power positions or bargaining influence drawing insight from network theory institutional theory and international relations research i argue that firm sensitivity to political risk is contingent upon a complementary concept social influence social influence arises through the mutual embeddedness of mne and host government in a complex global network of nations to test my hypotheses i construct a global network of trade relations that i combine with a unique transaction level dataset from the global petroleum industry my results demonstrate that social influence as modeled by home host structural equivalence moderates the effects of political risk further my findings provide support for a conceptual and empirical distinction between social influence and the traditional bargaining influence examined in the literature

buy local pollute less what drives households to join a community supported farm this paper examines which factors determine the participation of households in long term contracting with local farmers are households motivated by reducing the environmental impacts of their food consumption a discrete choice model of community supported agriculture csa participation is applied to a sample of 264 french households the findings suggest that difficult to measure attributes notably environmental considerations play a major role in explaining csa participation

the relation of risk attitudes and other regarding preferences a within subjects analysis abstract in this paper we provide experimental evidence on the relation of individual risk attitudes and subjects aversion to favorable inequality in a within subjects design we expand blanco et al s 2011 modified dictator game by the risk elicitation task of eckel and grossman 2002 our data show strong support for a significant negative correlation between risk tolerance and an aversion to favorable inequality the results are independent of gender i e women and men show a similar correlation in these traits

preference heterogeneity in experiments comparing the field and laboratory do laboratory experiments provide a reliable basis for measuring field preferences economists recognize that preferences can differ across individuals but only a few attempts have been made to elicit individual preferences for representative samples of a population in a particular geographical area region or country our primary objective is to directly compare estimates of preferences elicited from a convenience sample and the estimates for the wider population from which that sample is drawn we examine the strengths and weaknesses of laboratory and field experiments to detect differences in preferences over risk and time that are associated with standard observable characteristics of the individual

individual risk attitudes measurement determinants and behavioral consequences this paper studies risk attitudes using a large representative survey and a complementary experiment conducted with a representative subject pool in subjects homes using a question asking people about their willingness to take risks in general we find that gender age height and parental background have an economically significant impact on willingness to take risks the experiment confirms the behavioral validity of this measure using paid lottery choices turning to other questions about risk attitudes in specific contexts we find similar results on the determinants of risk attitudes and also shed light on the deeper question of stability of risk attitudes across contexts we conduct a horse race of the ability of different measures to explain risky behaviors such as holdings stocks occupational choice and smoking the question about risk taking in general generates the best all round predictor of risky behavior

decisions error and heterogeneity probabilistic choices or choice errors may play an important supporting role in shaping observed risky choices and a variety of restrictions on such choice probabilities play the role of identifying restrictions in empirical decision research we test six restrictions in the context of common ratio effect data for a general class of theories of risky choice two restrictions one for aggregate and one for individual data are supported but none of the heterogeneity restrictions that make the aggregate data model powerful survive scrutiny nor do estimable parametric versions of the individual data model there is room for new stochastic identifying restrictions in empirical decision research

cultural industries in international business research progress and prospect cultural industries systems of organizations that produce and distribute cultural goods with substantive symbolic aesthetic or artistic value represent an important exciting and complex context that receives growing scholarly attention as the first review of management research on cultural industries this paper aims to provide a systematic synthesis of current research summarizing distinctive characteristics of cultural industries and highlighting research gaps we also illustrate how the unique nature dynamics and evolution of cultural industries provide opportunities to broaden international business theories in four research themes i e internationalization strategy cross border innovation social inclusion in the global economy and emerging market research

just luck an experimental study of risk taking and fairness choices involving risk significantly affect the distribution of income and wealth in society this paper reports the results of the first experiment to our knowledge to study fairness views about risk taking specifically whether such views are based chiefly on ex ante opportunities or on ex post outcomes we find that even though many participants focus exclusively on ex ante opportunities most favor some redistribution ex post many participants also make a distinction between ex post inequalities that reflect differences in luck and ex post inequalities that reflect differences in choices these findings apply to both stakeholders and impartial spectators

how does anwr exploration affect opec behavior a simulation study of an open loop cournot nash game exploring petroleum reserves in the alaskan arctic national wildlife refuge anwr has been proposed to reduce the dependence on foreign oil and to ease the energy shortage in the united states to investigate the impacts of the anwr exploration on strategic behavior of opec members a calibrated dynamic model of oligopolistic competition and cartel collusion in the u s petroleum market is built in this paper numerical simulations on an open loop game are used here to examine the scope and magnitude of strategic interactions between opec s decisions and anwr exploration the simulation results show that opec s strategic postures have much stronger effects on the u s petroleum market than the anwr exploration the simulations in this paper indicate that preventing cartel collusion by opec is more effective than the anwr exploration in alleviating short petroleum supplies of the united states in the near future

what s to know about hypothetical bias in stated preference valuation studies abstract hypothetical bias arises in stated preference valuation studies when respondents report a willingness to pay wtp that exceeds what they actually pay using their own money in laboratory or field experiments although this bias is not found in all stated preference surveys hypothetical wtp typically exceeds the actual value by a factor of two to three unfortunately there is no widely accepted general theory of respondent behaviour that explains hypothetical bias therefore two meta analyses are reviewed to test current hypotheses regarding the causes of this overstatement of wtp and the associated recommendations to mitigate the bias suggestions for future research are made including the development of a general theory

heterogeneity in risky choice behaviour in a broad population we analyse risk preferences using an experiment with real incentives in a representative sample of 1 422 dutch respondents our econometric model incorporates four structural parameters that vary with observed and unobserved characteristics utility curvature loss aversion preferences towards the timing of uncertainty resolution and the propensity to choose randomly rather than on the basis of preferences we find that all four parameters contribute to explaining choice behaviour the structural parameters are significantly associated with socio economic variables but it is essential to incorporate unobserved heterogeneity in each of them to match the rich variety of choice patterns in the data

the impacts of local markets a review of research on farmers markets and community supported agriculture csa a growing interest in sourcing local food prod ucts is reflected in two recent best selling books kingsolver hopp and kingsolver 2007 pollan 2008 that make the case for going local darby et al 2008 recently found that consumers prefer locally grown over u s grown even when freshness is held constant and are willing to pay almost double for a product from a closer location a sur vey by the hartman group 2008 found that many consumers define local in terms of dis tance from their home one half said that local meant made or produced within 100 miles while one third of consumers 37 under stood local to mean made or produced in my state farmers markets could be considered the historical flagship of local food systems and their numbers in the united states have grown significantly over the last decade a 150 in crease from 1994 through 2006 ams 2007 total nationwide sales for the 2005 season were estimated at 1 billion reflecting 13 sales growth since 2000 usda 2006 re search on farmers markets is not new an in ventory of farmers market research brown 2002 mentions studies as far back as the 1940s brown s literature review however ends with research in 2000 since that time the number of farmers markets has increased by 53 ams 2007 and research on farmers markets has also grown community supported agriculture csa is a marketing strategy where consumers buy shares in the farm before planting begins and receive a portion of whatever is available each week of the growing season these shares gen erally cost several hundred dollars and provide enough fresh produce for a family some shares include other products such as eggs honey flowers and or meat first introduced into the united states in 1985 and estimated at only 50 farms in 1990 csa farms now number over 1 900 localharvest 2008 research on csa has also increased although much is descrip tive research or case studies of a small number of farms afsic 2008 this review of litera ture focuses on research that examines the im pacts that csa and farmers markets have on farmers consumers and communities follow ing up on brown s 2002 findings by reviewing research conducted on farmers markets since 2000

country level institutions and management earnings forecasts using a comprehensive sample hand collected from the original texts of management earnings forecasts from 27 countries we provide descriptive evidence on the country level institutional determinants and economic consequences of forecast characteristics using principal component factors constructed from a number of country level institutional variables we find that forecast disaggregation frequency precision and attribution vary significantly with the business and accounting environment of a country we further document that better quality management forecasts are generally associated with stronger stock market reactions and higher investment efficiency together our findings suggest that country level institutions play a vital role in voluntary disclosure characteristics

are people inequality averse or just risk averse individuals preferences for risk and inequality are measured through choices between imagined societies and lotteries the median relative risk aversion which is often seen to reflect social inequality aversion is between 2 and 3 most people are also found to be individually inequality averse reflecting a willingness to pay for living in a more equal society left wing voters and women are both more risk and inequality averse than others the model allows for non monotonic swfs implying that welfare may decrease with an individual s income at high income levels which is illustrated in simulations based on the empirical results

incorporating a stochastic element into decision theories abstract recent papers by harless and camerer 1994 and hey and orme 1994 have employed two rather different models of errors in decision making under uncertainty the present paper develops a third approach and shows how different stochastic specifications of the same deterministic core theory may generate very different and sometimes surprising hypotheses

opec and the u s oil import tariff open loop nash extraction plans of exhaustible resource producers in which producers take the plans of others as given are time consistent but proposed open loop oil import tariffs are almost always time inconsistent the paper derives a time consistent open loop nash tariff that can be readily computed for both competitive and a nash cournot specification of the oil market the authors illustrate the time sequence of the optimal import tariff for a simple model of the united states facing a duopolistic version of opec and a comparative fringe of oil producers and compare the outcome with the competitive equilibrium copyright 1991 by royal economic society

opec behavior a test of alternative hypotheses since interpretations of past and future oil price patterns depends on the model chosen the author tests and compares alternative theories of opec as a first step in validating the choice on any one model the results show that among opec countries the partial market sharing cartel model is the only model not rejected by at least some of the 11 members and gives the best explanation of production in comparison with 11 non opec countries the competitive model could not be rejected for 10 of the 11 non opec producers this raises the question of why if opec is a cartel friedman s predictions have not come true and introduces new questions for future research 19 references 3 tables

understanding the structural characteristics of a firm s whole buyer supplier network and its impact on international business performance building on the network theory and the concept of organizational ambidexterity we investigate the impact of structural characteristics of a firm s whole buyer supplier network network density betweenness centralization and average clustering coefficient on its international business ib performance we also explore the moderating roles of average path length and pagerank centrality using a manually collected dataset and a robust empirical methodology we find that while network density is negatively related betweenness centralization and average clustering coefficient have an inverted u shape and a u shaped relationship with ib performance respectively we also find significant moderation effects and in the process we show the economic importance of firms whole buyer supplier network to their ib performance we contribute to the international business and whole buyer supplier network literature

adapting and sustaining operations in weak institutional environments a business ecosystem assessment of a chinese mne in central africa multinational enterprises mnes sometimes pursue opportunities in largely uncharted distinctive institutional environments how do these firms sustain operations in such settings we explore how mnes tailor and maintain operations in institutionally weak precarious and challenging host country environments such as those devastated by conflicts we draw on the business ecosystem framework and analyze a qualitative longitudinal case study of a chinese state owned mne that entered and developed its operations in the democratic republic of congo drc in central africa our findings indicate that after entry the mne sustained its operations in the drc by engaging in collective actions and coevolving with key stakeholders within its business ecosystem these stakeholders included the home and host governments state owned enterprises privately owned enterprises and local communities our qualitative data further suggest that the mne s business ecosystem evolved through three stages exploring establishing and embedding and that within this ecosystem the key stakeholders also coevolved with the mne by adopting new roles over time

risk aversion and incentive effects comment charles a holt and susan k laury 2002 develop an experimental design to determine the risk attitude of an individual they use their observations to argue that increased incentives appear to change risk attitudes leading to greater risk aversion popular utility functions that do not allow for such effects are therefore misspecified building on this finding they estimate a flexible utility function that characterizes their aggregate data well but that does not assume constant absolute or relative risk aversion the basic holt and laury 2002 hl design should become an important tool for the interpretation and design of experiments in which risk attitudes could play a role however their most important result showing the effect of scaling up the stakes of the lottery choice task is confounded by a possible order effect an order effect occurs when prior experience with one task affects behavior in a subsequent task the primary methodological contribution of experiments in economics is to enhance control ideally such control makes the explanatory variables of interest in this case scale orthogonal to other explanatory variables such as order allowing clearer inferences about behavior than one could get from field econometric data we argue that not controlling for order effects results in a misspecification of utility functions that is as important as that of scale the subjects in the hl design were given sequences of three or four tasks as shown in table 1 task 1 involved choices over lotteries with a baseline level of prizes which we will refer to as the 1 scale task 2 involved hypothetical choices over prizes with a scaled up level of prizes either 20 50 or 90 task 3 repeated task 2 but with choices that involved real payoffs task 4 was a return to the baseline task with real 1 prizes in some sessions subjects were not given task 2 or task 3 what could one infer from the comparison of measured risk attitudes in the 1 and 20 tasks in hl unfortunately any observed difference could be due either to the scale of the prizes involved or the task order or some combination of both thus the effect of scale is intrinsically confounded with the possible effect of task order this is a logical flaw in their design which

eliciting von neumann morgenstern utilities when probabilities are distorted or unknown this paper proposes a new method the gamble tradeoff method for eliciting utilities in decision under risk or uncertainty the elicitation of utilities to be used in the expected utility criterion turns out to be possible even if probabilities are ambiguous or unknown a disadvantage of the tradeoff method is that a few more questions usually must be asked to clients also the lotteries that are needed are somewhat more complex than in the certainty equivalent method or in the probability equivalent method the major advantage of the tradeoff method is its robustness against probability distortions and misconceptions which constitute a major cause of violations of expected utility and generate inconsistencies in utility elicitation thus the tradeoff method retains full validity under prospect theory rank dependent utility and the combination of the two i e cumulative prospect theory the tradeoff method is tested for monetary outcomes and for outcomes describing life duration we find higher risk aversion for life duration but the tradeoff method elicits similar curvature of utility apparently the higher risk aversion for life duration is due to more pronounced deviations from expected utility

consumer inequality aversion and risk preferences in community supported agriculture abstract in community supported agriculture csa consumers face a tradeoff between i the desire to support a csa farmer and obtain environmentally friendly goods and ii the risk associated with a long term commitment we elicit inequality aversion and risk preferences of a sample of 162 french csa consumers using incentivized field experiments we find that csa consumers are concerned about payoff inequalities while we obtain evidence of advantageous inequality aversion toward csa farmers we also find disadvantageous inequality seeking we find that csa consumers are risk averse and loss averse and distort probabilities we also observe that inequality and risk preferences in the loss domain might complement each other to strengthen consumers support for csa farmers

violations of cumulative prospect theory in mixed gambles with moderate probabilities in a classroom choice experiment with mixed gambles and moderate probabilities we find severe violations of cumulative prospect theory cpt and of markowitz stochastic dominance our results shed new light on the exchange between levy and levy 2002 and wakker 2003 in this journal

an index of loss aversion to a considerable extent risk aversion as it is commonly observed is caused by loss aversion several indexes of loss aversion have been proposed in the literature the one proposed in this paper leads to a clear decomposition of risk attitude into three distinct components basic utility probability weighting and loss aversion the index is independent of the unit of payment the main theorem shows how the indexes of different decision makers can be compared through observed choices

estimating individual discount rates in denmark a field experiment we estimate individual discount rates with respect to time streams of money using controlled laboratory experiments these discount rates are elicited by means of field experiments involving real monetary rewards the experiments were carried out across denmark using a representative sample of 268 people between 19 and 75 years of age individual discount rates are estimated for various households differentiated by socio demographic characteristics such as income and age our conclusions are that discount rates are constant over the 12 month to 3 year horizons used in these experiments and that discount rates vary substantially with respect to several socio demographic variables hence we conclude that it would be reasonable to assume constant discount rates for specific household types but not the same rates across all households

consistency and heterogeneity of individual behavior under uncertainty by using graphical representations of simple portfolio choice problems we generate a very rich dataset to study behavior under uncertainty at the level of the individual subject we test the data for consistency with the maximization hypothesis and we estimate preferences using a two parameter utility function based on faruk gul 1991 this specification provides a good interpretation of the data at the individual level and can account for the highly heterogeneous behaviors observed in the laboratory the parameter estimates jointly describe attitudes toward risk and allow us to characterize the distribution of risk preferences in the population

the rise of the digital economy rethinking the taxation of multinational enterprises the international tax regime in relation to multinational enterprises mnes is ineffective and a rethink is required we illustrate that the tax avoidance motive of mnes can incentivize managers to locate profits in low tax jurisdictions without affecting the locations of their real operations we also argue that proposals to tax shareholders and consumers rather than corporate profits face significant theoretical and practical obstacles finally we extend a recently proposed model to tax mnes using a sales based allocation of consolidated worldwide profits this aims to prevent mnes shifting profits to low tax jurisdictions and reduces incentives for tax competition between countries

impact of informal institutions on the prevalence strategy and performance of family firms a meta analysis family controlled firms fcfs prevalence strategies and performance differ across countries we explain these differences through the lens of informal institutions suggesting that different countries have different levels of appreciation for family business to capture this effect we introduce the construct of family business legitimacy fbl and an associated index fbli we empirically measure fbli scores for 83 countries spanning both developed and emerging economies by combining meta analytic and archival data we show that fcfs prevail follow unique strategies and outperform non fcfs in countries with high fbli scores as a new contingency variable fbl advances the literature on the informal institutional embeddedness of organizations and family business

imperfect cartelization in opec a model of global oil production is applied to study cartelization by opec countries we define a measure for the degree of cooperation analogous to the market conduct parameter of cyert et al 1973 geroski et al 1987 lofaro 1999 and symeonidis 2000 this parameter is used to assess the incentives of different opec members to collude we find that heterogeneity in opec and the supplies of the non opec fringe create strong incentives against collusion more specifically opec s supply strategy although observed to be substantially more restrictive than that of a cournot nash oligopoly is found to still be more accommodative than that of a perfect cartel the strategy involves allocating larger than proportionate quotas to smaller and relatively costlier producers as if to bribe their participation in the cartel this is in contrast to predictions of the standard cartel model that such producers should be allocated relatively more stringent quotas furthermore we demonstrate that cartel collusion is more likely to be sustained for elastic than for inelastic demand since global oil demand is well known to be inelastic this observation provides another structural explanation for why opec behavior is inconsistent with that of a perfect cartel our study points to multiple headwinds that limit opec s ability to mark up the oil price 2016 elsevier b v