property rights externalities and resource degradation locating the tragedy abstract resource degradation in the third world is largely driven by the demands of farm households for fuelwood and land for agriculture since resources are often controlled through indigenous systems of property the tragedy of the commons has been used to explain resource degradation as a result private property is suggested as a solution to resource degradation a dynamic model capable of examining household incentives for resource use under private and common property is developed results of the model reject the conventional wisdom that gives rise to the presumed optimality of private individual property in natural resources and the correlated indictment of group management regimes

towards an attention based view of the firm the central argument is that firm behavior is the result of how firms channel and distribute the attention of their decision makers what decision makers do depends on what issues and answers they focus their attention on what issues and answers they focus on depends on the specific situation and on how the firm s rules resources and relationships distribute various issues answers and decision makers into specific communications and procedures the paper develops these theoretical principles into a model of firm behavior and presents its implications for explaining firm behavior and adaptation 1997 by john wiley sons ltd

information processing theory and the multinational enterprise this paper attempts to extend information processing theory so that it can be meaningfully applied to mncs a specific multidimensional framework is developed that can be used to measure the information processing capacities of macro level features of mnc organizational design an applied example transnationalism is used to illustrate how to apply the framework and demonstrate that it can contribute meaningful new insight to this complex organizational problem

is tiger woods loss averse persistent bias in the face of experience competition and high stakes although experimental studies have documented systematic decision errors many leading scholars believe that experience competition and large stakes will reliably extinguish biases we test for the presence of a fundamental bias loss aversion in a high stakes context professional golfers performance on the pga tour golf provides a natural setting to test for loss aversion because golfers are rewarded for the total number of strokes they take during a tournament yet each individual hole has a salient reference point par we analyze over 2 5 million putts using precise laser measurements and find evidence that even the best golfers including tiger woods show evidence of loss aversion jel d03 d81 l83

family involvement and firms establishment mode choice in foreign markets abstract extant literature on foreign entry increasingly recognizes firms heterogeneity as a potential reason for inconsistency in results on the establishment mode choice that is whether and under which conditions firms should choose to enter a new country through a greenfield investment or an acquisition our study contributes to this debate by identifying family ownership and family involvement in management as potential powerful sources of such heterogeneity integrating international business studies with both corporate finance literature on family firms and recent contributions from the socio emotional wealth perspective on family ownership we claim that due to greater risk aversion and lower access to information the family involvement both in the firm ownership and management leads to a higher propensity towards greenfield initiatives vs acquisitions however we also find that such a propensity decreases with international experience especially in family owned firms given the greater ability of professionalized management to overcome family related concerns on making acquisitions our analysis on 1045 foreign initiatives undertaken by 311 italian family and non family firms between 2003 and 2013 confirms our expectations indicating family ownership as a significant driver of firms international strategies

population growth and savings in ldcs a survey article both population growth and savings have traditionally taken a certain place of pride among models of growth and development the purpose of this paper is to examine the literature concerning the hypothesis that the savings rate itself is a function of the population growth rate and this effect exacerbates the negative effect of population on economic growth the evidence is examined from three perspectives i macroeconomic effects of variations in the age structure of the population ii choice theoretic models of family decision making particularly the joint determination of fertility decisions and savings decisions and iii market level interactions of variables which determine individual decisions the paper concludes that both population growth and savings rates are inextricably tied up in the process of economic development there are many ways in which the two variables may interact but no generalizations can be safely made across countries

citizens of the green world cosmopolitan orientation and sustainability contemporary consumer markets are characterized by both a heightened need for sustainability and an increasingly cosmopolitan lifestyle this article bridges these two trends and studies two untapped questions 1 how do cosmopolitan consumers relate to sustainable behavior and 2 how should environmental messages be framed to successfully target cosmopolitan consumers four studies in three countries show that high cosmopolitan consumers demonstrate environmental concern and engage in sustainable behavior to successfully target this promising segment with sustainable products or messages to promote sustainable behavior marketers and public policymakers should highlight the benefit of these products behaviors for the global rather than the local environment however the findings also show that high cosmopolitan consumers can be successfully targeted to support local environmental initiatives when activating their local identification the article offers implications for businesses non government organizations and public policymakers in designing effective messages to promote sustainable behavior

a note on the extinction of renewable resources abstract this paper presents two sets of conditions under which a sole owner of a renewable resource stock who maximizes a nonlinear benefit function would find it more profitable to harvest the stock to extinction than follow a continuous harvesting strategy when the minimum viable resource stock is positive extinction is optimal as long as the initial resource stock is sufficiently small regardless of the discount rate when the minimum viable resource stock is zero and the discount rate exceeds the growth potential of the species extinction is optimal for sufficiently small initial stocks

cosmopolitan consumers as a target group for segmentation for international companies the literature recommends directing segmentation efforts at customer characteristics rather than country characteristics consumers degree of cosmopolitan orientation has been suggested as a powerful segmentation base as this characteristic is expected to drive consumers tastes and preferences to advance research on this segmentation base this article offers a conceptualization of the consumer cosmopolitanism construct by 1 delineating its conceptual domain 2 highlighting its key dimensions namely open mindedness diversity appreciation and consumption transcending borders and 3 examining its links with theoretically relevant variables specifically consumer ethnocentrism and global consumption orientation based on the aforementioned conceptualization a consumer research specific and psychometrically sound measurement instrument the c cosmo scale is subsequently developed and tested in a series of complementary studies finally empirically based insights into the characteristics of cosmopolitan consumers are offered by 1 profiling them on consumption relevant variables innovativeness risk aversion susceptibility to normative influence consumer ethnocentrism and demographic characteristics 2 examining the link between consumer cosmopolitanism and willingness to buy foreign products and 3 developing an empirically based typology of cosmopolitan local consumers using a cluster analysis approach from a managerial perspective findings suggest that the identification and subsequent targeting of cosmopolitan consumers may well represent an appropriate strategy for internationally active companies

foreign locals a cautionary tale on the culture of mnc local employees multinational corporations mncs rely heavily on local employees when conducting their international operations yet the international business literature provides few instances of true focus on these employees the commonly used label host country nationals hcns confers them an identity strongly related to the culture of their country prompting both researchers and practitioners to know them through the knowledge about the local culture this paper provides evidence that a more sophisticated view of the culture of hcns is needed through an ethnographic exploration of hcns working in local subsidiaries of american mncs in romania i reveal that hcns are not always culturally interchangeable with the rest of the host country population hcns can display a variety of cultural profiles more or less reflective of the national culture depending on their enacted stance towards the native culture and the cultural landscape of the mncs themselves the findings call for further specification of theories relying on the assumed localness of hcns and should contribute to the ongoing conversation on the interplay between the cultures specific to the mnc and its host countries

does market experience eliminate market anomalies the case of exogenous market experience a vibrant literature has emerged that suggests willingness to pay and willingness to accept measures of value are quite different for inexperienced consumers but that value differences erode with market experience one potential shortcoming of this literature is that market experience is endogenous this study presents a framed field experiment that exogenously induces market experience empirical findings support the premise that market experience alone can eliminate an important market anomaly

salience in experimental tests of the endowment effect starting with knetsch 1989 experiments on the endowment effect thaler 1980 typically rely on a two stage procedure in the first stage subjects are endowed with a good such as a mug in the second stage the same subjects are given the opportunity to trade this good for another good of similar value such as a pen the endowment effect holds that very few subjects chose to trade sometimes as few as ten percent in related experiments subjects state selling prices for their endowment that are much higher than their buying prices for the same good these patterns are hard to reconcile with standard choice theory which predicts that about half the subjects would trade and that selling prices and buying prices are similar the common explanation of this evidence relies on prospect theory s loss aversion tversky and kahneman 1979 because the pain of parting with the endowment looms larger in the decision maker s mind than the pleasure of acquiring a good of similar value kahneman knetsch and thaler 1990 a decision maker endowed with a mug is unwilling to trade it for a

optimal inattention to the stock market with information costs and transactions costs recurrent intervals of inattention to the stock market are optimal if consumers incur a utility cost to observe asset values when consumers observe the value of their wealth they decide whether to transfer funds between a transactions account from which consumption must be financed and an investment portfolio of equity and riskless bonds transfers of funds are subject to a transactions cost that reduces wealth and consists of two components one is proportional to the amount of assets transferred and the other is a fixed resource cost because it is costly to transfer funds the consumer may choose not to transfer any funds on a particular observation date in general the optimal adjustment rule including the size and direction of transfers and the time of the next observation is state dependent surprisingly unless the fixed resource cost of transferring funds is large the consumer s optimal behavior eventually evolves to a situation with a purely time dependent rule with a constant interval of time between observations this interval of time can be substantial even for tiny observation costs when this situation is attained the standard consumption euler equation holds between observation dates if the consumer is sufficiently risk averse

a reference price theory of the endowment effect abstract the common finding that selling prices exceed buying prices the so called endowment effect is typically explained by the assumptions that consumers evaluate potential transactions with respect to their current holdings and that the owners of a good regard its potential loss to be more significant than nonowners regard its potential acquisition in contrast to this pain of losing account the authors propose that the endowment effect reflects a reluctance to trade on terms that appear unfavorable with respect to salient reference prices in six experiments and eight more summarized in appendixes the authors show that manipulations that reduce the gap between valuations and reference prices reduce or eliminate the endowment effect these results suggest that the endowment effect is often best construed as an aversion to bad deals rather than an aversion to losing possessions

allocation of initial public offerings and flipping activity abstract there is a general perception that the large trading volume in initial public offerings is mostly due to flippers that are allocated shares in the offering and immediately resell them on average however flipping accounts for only 19 of trading volume and 15 of shares offered during the first two days of trading institutions do more flipping than retail customers and hot ipos are flipped much more than cold ipos institutions do not quickly flip cold ipos to take advantage of price support activities by the underwriter explicit penalty bids are rarely assessed against flippers

an economic model of soil conservation by introducing soil depth and soil loss into a simple model of agricultural production this paper seeks to determine when the private path of erosion differs from the socially optimal path considering the depletion of soil only and abstracting from the environmental disruption caused by erosion the paper argues that under most institutional arrangements the social and private rates of erosion are the same the paper concludes that public policy should be directed toward reducing erosion only when it leads to significant pollution externalities

do professional traders exhibit myopic loss aversion an experimental analysis two behavioral concepts loss aversion and mental accounting have been combined to provide a theoretical explanation of the equity premium puzzle recent experimental evidence supports the theory as students behavior has been found to be consistent with myopic loss aversion mla yet much like certain anomalies in the realm of riskless decision making these behavioral tendencies may be attenuated among professionals using traders recruited from the cbot we do indeed find behavioral differences between professionals and students but rather than discovering that the anomaly is muted we find that traders exhibit behavior consistent with mla to a greater extent than students

the strategic bequest motive although recent research suggests that intergenerational transfers play an important role in aggregate capital accumulation our understanding of bequest motives remains incomplete we develop a simple model of strategic bequests in which a testator influences the decisions of his beneficiaries by holding wealth in bequeathable forms and by conditioning the division of bequests on the beneficiaries actions the model generates falsifiable empirical predictions that are inconsistent with other theories of intergenerational transfers we present econometric and other evidence that strongly suggests that bequests are often used as compensation for services rendered by beneficiaries

is there a relationship between a geocentric mind set and multinational strategy this paper operationalizes and tests relationships between a geocentric managerial mind set geographic scope and the structural and strategic characteristics of firms and industries relationships are tested using data from a survey of senior corporate international hrm managers of large u s based manufacturing multinationals an index of a geocentric mind set is found to correlate with geographic scope and various aspects of ihrm policy and practice however no relationship is found with measures of multinational strategy or organizational structure the paper concludes with a speculative hypothesis development of a geocentric mind set may relate to the information or knowledge intensity of the firm rather than its position on the strategic continuum

an optimal path to extinction poverty and resource degradation in the open agrarian economy this paper constructs a model of the open agrarian economy in order to explore the tendency of many such economies to evolve along paths characterised by severe environmental degradation it pays special attention to the importance of commodity prices and the transfer system in determining agricultural activity levels in ecologically delicate systems

explaining the effect of rapid internationalization on horizontal foreign divestment in the retail sector an extended penrosean perspective we adopt a penrosean perspective to study the effect of rapid international expansion on the subsequent divestment of international operations we draw on regional strategy theory and differentiate penrosean managerial resources by their geographical fungibility to argue that the effect of rapid international expansion on the divestment of international operations varies with the regional patterns of firms international expansion and international experience we test our hypotheses using two stage least squares 2sls estimation on data that capture the international expansion and divestment of retailers over the period 2003 2012

repatriating knowledge variables influencing the transfer process because of the strategic importance of organizational learning in a global economy the knowledge that repatriates acquire during international assignments is a valuable resource few multinational enterprises however actively harvest this knowledge and little quantitative empirical research on this topic exists to date we propose an original model and propositions that delineate the facilitative and inhibiting factors affecting repatriate knowledge transfer to work units we conclude with suggestions for future research and practical implications

the family as an incomplete annuities market families can self insure against uncertain dates of death through implicit or explicit agreements with respect to consumption and interfamily transfers interfamily transfers need have nothing to do with altruistic feelings they may simply reflect risk sharing behavior of completely selfish family members although family annuity markets are incomplete even small families can substitute by more than 70 percent for perfect market annuities given adverse selection and transaction costs family risk pooling may be preferred to public market annuities in the absence of public annuities these risk sharing arrangements provide powerful incentives for marriage and family formation

an endowment effect for risk experimental tests of stochastic reference points recent models of reference dependent preferences indicate that expectations may play a prominent role in the presence of behavioral anomalies a subset of such expectations based models predicts an endowment effect for risk that risk attitudes differ when reference points change from certain to stochastic in two purposefully simple risk preference experiments eliminating often discussed confounds i demonstrate both between and within subjects such an endowment effect for risk these results provide needed separation between expectations based reference dependent models allow for evaluation of recent theoretical extensions and may help to close a long standing debate in decision science on inconsistency between utility elicitation methodologies

tied transfers and paternalistic preferences why do parents make inter vivos transfers to their children and leave them postmortem bequests 1 gary becker s notions of altruism 1981 ch 8 by which he means that children s utilities are arguments of their parents utility function provides one explanation denoting the children s utility functions by u ci where ci denotes consumption by child i the preferences of parents with two children can be represented by a utility function of the form w cp u1 c1 u2 c2 where cp is the parents own consumption 2 in the altruistic model parents sole motive for intergenerational transfers is to increase their children s utility in other models however parents may have nonaltruistic as well as altruistic motives for transferring resources to their children the literature on economic development emphasizes old age support as a motive for fertility and to a lesser degree as a motive for providing children with human capital as part of an explicit or implicit intergenerational contract when human capital formation is the primary focus of the analysis as in discussions of education and earnings it is useful to decompose inter vivos transfers into human capital formation and other inter vivos transfers such a decomposition can mislead in discussing intergenerational transfers however because it obscures the fact that the provision of human capital by parents constitutes an intergenerational transfer laurence kotlikoff and avia spivak 1981 analyze another old age support model one in which the family operates as an incomplete annuities market in their model children make regular transfers to their aging parents and the share that each child contributes to the parents determines his or her share of the parental estate although the prospect of old age support may be an important motive for downstream intergenerational transfers i e from parents to children in some societies in the united states today upstream transfers appear too small and too uncertain to make this motive credible to explain downstream transfers in the united states today economists have investigated other models in which parents have selfish as well as selfless motives for example b douglas bernheim andrei shleifer and lawrence summers propose a model in which parents use the prospect of bequests to exact services from their children we envision a testator who though altruistic is also affected by actions taken individually by a number of potential beneficiaries he may e g enjoy receiving attention from his children 1985 p 1046 bernheim et al assume that such actions increase parents utility and decrease children s utilities in their model the children s utility functions become u1 ai ci where ai denotes services the ith child provides the parents and the parents utility function becomes w cp al a2 ul al c1 u2 a2 ca to measure these services bernheim et al use frequency of contact i e visits plus telephone calls between parents and children this approach expands the concept of child services to include those provided by adult children who live outside the parents household in an attempt to explain bequests and inter vivos transfers child services originally appeared in discussions of fertility and the allocation of resources to young children living with their parents and thus tends to evoke the joys of young parenthood university of pennsylvania philadelphia pa 19104 and university of washington i am grateful to the national science foundation and the national institutes of health for financial support to gary becker samuel preston david stapleton and paul taubman for helpful comments and to judith farnbach for editonal assistance 1 even if bequests are unplanned as some versions of the life cycle savings model assume inter vivos transfers must be intentional 21 ignore the possible dependence of the children s utility on their own children s utility etc because it is not relevant to the issues discussed in this paper

the intergenerational state education and pensions allocation is inefficient when generations overlap this failure can be mitigated by properly designed social arrangements we show that public financing of education and public pensions can be designed to implement an intergenerational transfer scheme supporting the complete market allocation neither the public financing of education nor the pension scheme we consider resemble standard ones in our mechanism via the public education system the young borrow from the middle aged to invest in human capital they pay back the debt via a social security tax the proceedings of which finance pension payments when the complete market allocation is achieved the rate of return implicit in this borrowinglending scheme should equal the market rate of return

the bidder s curse traditional explanations for the popularity of auctions are efficiency and revenue maximization we argue that another reason is the potential for overbidding i e buyers bidding above their willingness to pay outside the auction the auction mechanism ensures that even if only few buyers overbid they affect prices and allocations we employ a novel approach to identify overbidding in the field comparing auction prices to simultaneous fixed prices for identical items on the same ebay webpage we argue that fixed prices provide an upper bound for auction bids in a detailed data set of board game auctions we find that the final price exceeds the simultaneous fixed price in 42 percent of the auctions the result is not explained by differences in item quality shipping costs or seller reputation prior auction experience does not eliminate overbidding the finding replicates in a second broad data set of a cross section of auctions 48 percent overbidding the substantial fraction of overbid auctions is induced by a small number of bidders only 17 percent ever bid above the fixed price using a simple model of second price auctions with alternative fixed prices we show that transaction costs of switching between auctions and fixed prices cannot explain the results given that even the expected auction price is higher than the fixed price consistent with limited attention the closer the fixed price is listed relative to an auction the less likely are overbids this effect is strongest for bidders first bids when they are likely to examine the auction and fixed price listings more closely

international attention and multinational enterprise performance this study examines the performance consequences of international attention defined as the extent to which headquarters executives in the multinational enterprise mne invest time and effort in activities communications and discussions aimed at improving their understanding of the global marketplace using detailed questionnaire and archival data on 135 mnes our analysis revealed three significant findings first international attention can be operationalized as a meta construct that consists of three interrelated and reinforcing dimensions second international attention has a curvilinear inverted u shape relationship with mne performance third the performance benefits of international attention increase with three categories of moderating factors the international assignment experience of top executives the independence of value adding activities across country locations and the degree of industry dynamism

expectations as endowments evidence on reference dependent preferences from exchange and valuation experiments while evidence suggests that people evaluate outcomes with respect to reference points little is known about what determines them we conduct two experiments that show that reference points are determined at least in part by expectations in an exchange experiment we endow subjects with an item and randomize the probability they will be allowed to trade subjects that are less likely to be able to trade are more likely to choose to keep their item in a valuation experiment we randomly assign subjects a high or low probability of obtaining an item and elicit their willingness to accept for it the high probability treatment increases valuation of the item by 20 30 copyright 2011 oxford university press

why do ipo underwriters allocate extra shares when they expect to buy them back i argue that overallocation is used as a marketing strategy to increase the offer price and aftermarket price of an initial public offering ipo i show that when there is weak demand it can be optimal for the underwriter to oversell an issue and take a naked short position the issuing firm benefits from a higher expected offer price this is in spite of the fact that in equilibrium allocating more shares when there is weak demand requires greater underpricing when there is strong demand

reference dependent risk attitudes we use koszegi and rabin s 2006 model of reference dependent utility and an extension of it that applies to decisions with delayed consequences to study preferences over monetary risk because our theory equates the reference point with recent probabilistic beliefs about outcomes it predicts specific ways in which the environment influences attitudes toward modest scale risk it replicates classical prospect theory including the prediction of distaste for insuring losses when exposure to risk is a surprise but implies first order risk aversion when a risk and the possibility of insuring it are anticipated a prior expectation to take on risk decreases aversion to both the anticipated and additional risk for large scale risk the model allows for standard consumption utility to dominate reference dependent gain loss utility generating nearly identical risk aversion across situations

is the endowment effect an expectations effect a hallmark result within behavioral economics is that individuals choices are affected by current endowments a recent theory due to k szegi and rabin 2006 quarterly journal of economics 121 1133 1165 explains such endowment effect with a model of expectations based reference dependent preferences departing from past work we conduct complementary experiments to disentangle expectations verified probabilistic beliefs held by subjects from other features of endowment such as assignment to a good hence allowing us to compare the effect of expectations with that of other variations while mere assignment can affect choices we do not find a large role in the effect for k szegi rabin expectations

an intergenerational model of population growth the problem of population growth has been only partially formulated in an intertemporal context therefore a link between population theory and economic growth theory is still missing this paper attempts to provide such a link by analyzing an intergenerational model of optimum population growth the model accommodates the idea that decisions on increases in population should consider the new population s quality of life this concept is elaborated upon in a static framework by gary becker and gregg lewis dennis de tray and robert willis other literature on population growth such as harold votey disregards this consideration altogether 2 more explicitly this paper assumes that the utility of each generation is a function of the level of its consumption and the number and utility of the newly born people we are thus led to consider the utility of an infinite number of generations this model differs from paul samuelson s intergenerational model of pure consumption in which the utility of each generation depends only on that generation s own consumption recently philip neher 1971 analyzed a model of fertility in primitive economies it is based on the assumption that parents use children as investments to insure future consumption needs neher s analysis focuses entirely on the pension motive for having children 3 our model assumes that fertility is determined so as to balance the parents welfare derived from additional children against that derived from the children s quality of life we first outline a general model of optimum population growth in order to discuss explicitly various economic aspects of population we use a simple case in the analysis section i sets up the basic model

the effects of within country linguistic and religious diversity on foreign acquisitions this article explores how within country diversity of both language and religion influences the ownership structure of foreign acquisitions commentators have acknowledged the potential importance of within country diversity but to date this issue has received minimal empirical attention we propose that diversity plays two distinct roles namely diversity within the host country may be an additional source of behavioral uncertainty and information asymmetry over and above the effects arising from cross national differences moreover diversity within the home country may increase the cognitive complexity of the decision makers moderating the firm s response to the distance and diversity of the host country results based on foreign acquisitions across 67 acquirer and 69 target countries confirm both of these roles while the main focus of this article is on the role that within country diversity plays in international business decisions it also makes contributions in terms of expanding the range of dimensions of distance investigated in the cross border acquisition literature in highlighting a potentially positive role that diversity might play in such acquisitions and in providing a potential explanation for asymmetries in distance that is differences in cognitive complexity

an anatomy of state control in the globalization of state owned enterprises integrating agency theory with institutional analysis in international business we propose a state control perspective to analyze government control mechanisms in emerging economies globalization of state owned enterprises soes we identify two types of state control that influence soes globalization decisions and the degree of globalization dog state ownership control and executives political connections both of which are contingent upon the home country s evolving institutional environments using a two step corporate globalization decision model and 17 272 firm year observations of non financial chinese listed companies we find a strong impact of both types of state control on soes globalization although the impacts differ between the periods before and after domestic governance reform and across different globalization decision steps the diminishing impact of executives political connections and the increasing impact of state ownership control on firms dog demonstrate the evolving relationship between the state and the managers as well as the dynamics of state control in globalizing soes

household borrowing constraints fertility dynamics and economic growth abstract in this article we provide a model of growth with endogenous fertility in which multiple steady states derive from the modelling of household liquidity constraints we put forward an innovative approach to the finance of higher education by assuming that youths can borrow because their parents guarantee the loan repayment with their income young individuals can renege on their debt and lenders provide them credit only up to an amount which is commensurate to a collateral provided to children by their families parents care about children s education and choose a collateral which depends positively on family income and negatively on family size a stable trap of low development is characterized by high fertility rates and low investment in human capital on the other hand in economies with a sufficiently low starting rate of fertility borrowing constraints gradually vanish and the process of growth reaches a steady state characterized by the optimality of fertility and schooling choices government subsidies to education may reduce population growth and promote human capital investment if fertility at steady states is lower than thresholds

what we talk about when we talk about global mindset managerial cognition in multinational corporations recent developments in the global economy and in multinational corporations have placed significant emphasis on the cognitive orientations of managers giving rise to a number of concepts such as global mindset that are presumed to be associated with the effective management of multinational corporations this paper reviews the literature on global mindset and clarifies some of the conceptual confusion surrounding the construct we identify common themes across writers suggesting that the majority of studies fall into one of three research perspectives cultural strategic and multidimensional we also identify two constructs from the social sciences cosmopolitanism and cognitive complexity that underlie the perspectives found in the literature we then use these two constructs to develop an integrative theoretical framework of global mindset we then provide a critical assessment of the field of global mindset and suggest directions for future theoretical and empirical research

cultural intelligence a theory based short form measure this article reports the development and validation of a theory based short form measure of cultural intelligence sfcq the sfcq captures the original theoretical intent of a multifaceted culture general form of intelligence that is related to effective intercultural interactions the validity of the scale is established with 3526 participants in five language groups from around the world results provide evidence for construct and criterion related validity of the measure and indicate that cultural intelligence is a single latent factor reflected in three intermediate facets in support of construct validity the measure is modestly related to but distinct from emotional intelligence and personality and correlates positively with several indicators of multicultural experience with regard to criterion related validity it relates as predicted to several dimensions of intercultural effectiveness implications for the measurement and understanding of culture and the influence of culture on management practice are discussed

is the threat of reemployment services more effective than the services themselves evidence from random assignment in the ui system we examine the effect of the worker profiling and reemployment services system this program profiles unemployment insurance ui claimants to determine their probability of benefit exhaustion and then provides mandatory employment and training services to claimants with high predicted probabilities using a unique experimental design we estimate that the program reduces mean weeks of ui benefit receipt by about 2 2 weeks reduces mean ui benefits received by about 143 ana increases subsequent earnings by over 1 050 most of the effect results from a sharp increase in early ui exits in the treatment group relative to the control group jel j650

welfare measurement in the household production framework the household production approach to consumer behavior developed from the work of gary becker william gorman and kelvin lancaster has considerable descriptive appeal in modelling the decisions of households the approach derives from the observation that households frequently purchase market goods that do not yield utility directly but are combined to produce commodity service flows which the household values thus observed behavior is determined by household production technology as well as by tastes the advantage of this distinction is that we can pose reasonable hypotheses about characteristics of technology though we rarely possess useful a priori information regarding tastes the putative advantages of the household production approach are questioned on empirical and conceptual grounds by robert pollak and michael wachter 1975 they show that jointness in production or nonconstant returns to scale cause implicit commodity prices to depend on both tastes and technology raising serious econometric difficulties in the estimation of commodity demand functions in addition since commodity prices become functions of the commodity bundle consumed the analogy to traditional demand theory breaks down joint production occurs when a good enters several production processes simultaneously or equivalently when a good in one production process also enters directly into the individual s utility function the most common example is time which provides the context for all production processes and is often associated with the production of several commodities simultaneously since joint production in the household is likely to be pervasive the critique by pollak and wachter cannot be ignored in response to the comment by william barnett pollak and wachter 1977 suggest dispensing with the notion of commodity prices and treating the demand for commodities as a function of goods prices this approach confounds tastes and technology but it eliminates the troublesome concept of commodity prices as parameters when in fact they are likely to be endogenous in this paper we show that results from positive analysis such as the critique by pollak and wachter have implications for the use of the household production framework for welfare analysis the household production function approach has had considerable appeal for measuring welfare effects of public actions in the environmental and natural resource areas gardner brown john charbonneau and michael hay elizabeth wilman yet traditional approaches to welfare measurement are frequently inapplicable we argue that welfare measurement in this framework is complicated by the difficulties of unravelling tastes and technology we extend pollak and wachter s results by demonstrating that marshallian demand functions for commodities cannot be uniquely defined thus marshallian functions cannot be used to derive exact compensated functions in the manner of jerry hausman and of george mckenzie and i f pearce nor can compensating and equivalent variation measures be bounded by marshallian consumer s surplus estimates following robert willig in fact duality results that normally allow us to move between marshallian and hicksian functions are not assistant and associate professors respectively department of agricultural and resource economics university of maryland college park md 20742 this paper is scientific article no a3404 contribution no 6476 of the maryland agricultural experiment station we wish to thank darrell hueth james opaluch v kerry smith and elizabeth wilman for comments on an earlier draft

contextualizing leadership a typology of global leadership roles while the global leadership literature has grown rapidly over recent years the context in which global leadership occurs remains ill defined and under conceptualized this lack of contextualization risks equating global leadership roles that are qualitatively very different and prevents sufficient clarity for empirical sampling to foster more cohesive theoretical and empirical work we develop a typology of global leadership roles that considers context as a critical contingency factor drawing on role and complexity leadership theories we propose four ideal typical global leadership roles incremental operational connective and integrative global leadership that differ in their 1 task complexity characterizing the variety and flux within the task context and 2 relationship complexity reflecting the boundaries and interdependencies within the relationship context we further delineate how these contextual demands relate to specific sets of behaviors and actions that allow global leaders to fulfill the requirements of their corresponding ideal typical global leadership roles our article concludes with a discussion of implications the typology presents for global leadership research and practice contextualization of the leadership construct more broadly and the field of international business

children and savings in less developed countries abstract a commonly cited motive for childbearing in ldcs is the support in old age provided by one s children alternative means of retirement support become available as a country develops this paper presents a simple two period model in which financial institutions are allowed to substitute for children in the provision of this service the quality of financial institutions is given an operational definition and the hypothesis of the model are tested on a cross section sample of countries

optimal stock trading with personal taxes implications for prices and the abnormal january returns abstract the tax law confers upon the investor a timing option to realize capital losses and defer capital gains with the tax rate on long term gains and losses being about half the short term rate the law provides a second timing option to realize losses short term and gains long term if at all our theory and simulation over the 1962 1977 period establish that taxable investors should realize long term gains in high variance stocks and repurchase stock in order to realize potential future losses short term tax trading does not explain the small firm anomaly but predicts a seasonal pattern in trading volume which maps into a seasonal pattern in stock prices the january anomaly only if investors are irrational or ignorant of the price seasonality

peasants procreation and pensions producers and consumers durable goods yielding a stream of benefits which are compared with a stream of costs births occur if the present value of the benefits exceeds the present value of the costs the theory has been used by malthusians to rationalize the casual observation that population growth rates increase during the early stages of economic development and then perhaps fall later on as

capital accumulation income distribution and endogenous fertility in an overlapping generations general equilibrium model abstract this paper studies the intertemporal relationships among population growth income distribution inter generational social mobility skill composition of the labor force and household income in an overlapping generations general equilibrium model that aggregates household decisions regarding fertility savings and investment in human capital of children it shows that as a consequence of endogenous fertility the equilibrium path attains steady state from the second generation income tax transfer child taxation and social security taxation policies that can be devised to affect these variables are also analyzed the model provides a structural explanation for the inverse household income child quantity and negative child quality quantity relationships that are observed in developing countries it also shows that group interests may hinder the emergence of perfect capital markets with private initiatives

how the west invented fertility restriction europeans restricted their fertility long before other parts of the world did so by raising the marriage age of women and ensuring that a substantial proportion remained celibate the european marriage pattern emp reduced childbirths by up to 40 we analyze the rise of this first socio economic institution in history that limited fertility through delayed marriage our model emphasizes changes in agricultural production following the black death the production of meat wool and dairy pastoral products increased while grain production declined women had a comparative advantage producing pastoral goods they often worked as servants in husbandry where they remained unmarried long after they had left the parental household in a malthusian world this translated into lower population pressure raising average wages by up to a quarter the black death thus set into motion a virtuous circle of higher wages and fertility decline that underpinned europe s high per capita incomes we demonstrate the importance of this effect in a calibration of our model

dual values based organizational identification in mnc subsidiaries a multilevel study dual organizational identification with both the whole corporation and the local subsidiary is considered valuable for subsidiary employees international assignees and multinational corporations mncs while extant research has examined antecedents of separate targets of identification it has not fully addressed the challenge of identifying factors capable of supporting both simultaneously this study examines the influence of individual and organizational level factors on the dual values based identification of foreign subsidiary employees drawing on acculturation and organizational socialization theory we test hypotheses on multilevel data from 793 managers and professionals in 90 foreign subsidiaries belonging to 11 nordic mncs the results show that dual values based identification is associated with acculturation and first hand contact at the individual level and a supportive social context for affective learning at the organizational level through its emphasis on higher order elements that connect different parts of the mnc rather than those that lead to the formation of in groups and out groups the values based approach to identification contributes to our understanding of dual identification in mnc subsidiaries and represents a more positive treatment of cultural diversity the findings have heightened practical relevance given the emphasis individuals are placing on values congruence in career choices and mnc efforts at instilling shared values

the structure of a contract and the theory of a non exclusive resource the process of arriving at a useful concept of analysis is not only slow and painful but also may go astray and attain nothing useful someone begins with one example or observation followed by a theory which is intuitively plausible a theoretical term associated with a vague concept is coined examples of a seemingly different type emerge which call for another theory the process goes on as examples and theories continue to accumulate the different categories under the same heading of analysis serve only to confuse and each associated theory becomes ad hoc such has been the fate of the concept of externality a more useful approach i think is via contractual conditions the example chosen for illustration is marine fisheries where the fishing right is taken

old age pensions and fertility in rural areas of less developed countries some evidence from mexico this paper reviews the theoretical relationship between old age pensions and human fertility and offers preliminary evidence from mexico on the direction and magnitude of the effect on fertility of the introduction of a formal old age pension system the security motive is an untested but plausible hypothesis especially for rural areas where alternative methods for caring for the elderly if they exist are likely to be relatively risky and unprofitable a number of different effects can theoretically be expected following introduction of a system of old age pensions in such areas including a savings reduction effect and life cycle effects such as effects on the time phasing of labor force participation and of consumption and effects on family fragmentation and intergenerational transfers and on the sex composition of the labor force and the allocation of family resources between the sexes information costs uncertainties about various aspects of the social security system and the possibility of differences between desired and actual fertility must also be considered given the long list of possible effects and offsetting influences and uncertainties about the magnitudes of such effects the actual outcome can only be resolved empirically data on sugar cane workers who began to be covered by a social security system in 1963 in 34 contiguous rural municipalities in the papaloapan river basin in southeastern mexico were used to test the relationship a regression analysis of the determinants of change in the child woman ratios in the 34 municipalities from 1960 70 indicated among other findings that the proxy used for the influence of participation in an old age pension system had a significantly negative effect on fertility an increase in social security participation from 0 to 50 would appear to reduce the child woman ratio by more than 1 10 despite the simplicity of the testing procedure shortcomings in the available data and the possibility of specification bias the results indicate that the security motive may be important and requires further empirical and theoretical research

natural resources prices export policies and deforestation the case of sudan abstract environmental destruction is often the result of price policies for primary commodities that determine how individuals will use and abuse natural resources in this paper we analyze how domestic policies under colonial and independent governments in sudan contributed to acacia senegal deforestation and the demise of the international gum arabic trade when primary commodities are produced from environmentally beneficial species such as acacia senegal trees the impact of a declining market for the primary commodity will have economic and ecological repercussions on other sectors in the economy poverty and risk are central to this process

the old age security hypothesis revisited abstract children s altruism toward parents is allowed in a two overlapping generations model with endogenous fertility parents raise children because when retired they expect gifts from their children who are essentially a capital good individuals behavior between generations is examined by analyzing a nash equilibrium which is then compared with a social planner s optimal allocation the pay as you go public pension program is viewed as the optimal gifts from the optimal allocation when the latter is implemented the effect on fertility of the introduction of a capital market is also analyzed the validity of the old age security hypothesis is shown to depend on the parameters of utility and cost functions

why don t issuers get upset about leaving money on the table in ipos one of the puzzles regarding initial public offerings ipos is that issuers rarely get upset about leaving substantial amounts of money on the table defined as the number of shares sold times the difference between the first day closing market price and the offer price the average ipo leaves 9 1 million on the table this number is approximately twice as large as the fees paid to investment bankers and represents a substantial indirect cost to the issuing firm we present a prospect theory model that focuses on the covariance of the money left on the table and wealth changes our reasoning also provides an explanation for a second puzzling pattern much more money is left on the table following recent market rises than after market falls this results in an explanation of hot issue markets we also offer a new explanation for why ipos are underpriced copyright 2002 oxford university press

the pay as you go pension system as fertility insurance and an enforcement device a paygo system may serve as insurance against not having children and as an enforcement device for ungrateful children who are unwilling to pay their parents a pension in fact the latter was bismarck s historic motive for introducing this system it is true that the paygo system reduces the investment in human capital but if it is run on a sufficiently small scale it may nevertheless bring about a welfare improvement if on the other hand the scale of the system is so large that parents bequeath some of their pensions to their children it is overdrawn and creates unnecessarily strong disincentives for human capital investment

population and the environment a parable of firewood and other tales the author analyzes the relationship between population and the environment with a focus on the role which environmental degradation and natural resources depletion may play in producing the population pressure which lies behind such degradation and depletion especially in developing countries the principal conclusion of this analysis is that the possibilities for a stable equilibrium between human population and its environment are quite limited i show that parental altruism toward their children can only make matters worse if socially unchecked by leading to an increase of the birthrate in every environmental state in comparison with that which would occur in its absence excerpt

global mind sets and cognitive shift in a complex multinational corporation this article investigates attitudes that underlie international strategy processes we propose survey scales of these attitudes and describe tests that support their reliability and validity as measures of constructs including integration responsiveness and coordination that researchers have used for many years in case analyses of international strategy and organization we also propose and validate scales to capture the perceived alignment with firms international objectives of key business policies that affect individuals including accountability for global results career opportunity and a globally shared meaning system that informs communication and discussion about change our discussion of these tests offers an assessment of how changing patterns of association among the measures over time conform to expectations generated by the case based empirical literature we argue that these patterns document a process of organizational learning that can link managers mind sets with senior managers intentions in the course of proactive international strategic change the analysis relies on survey responses taken in 1992 and 1995 from 370 managers in 13 country affiliates and the head office of a u s based diversified multinational corporation dmnc 1998 john wiley sons ltd

sharecropping and the interlinking of agrarian markets one of the often noted features of less developed agrarian economies is the existence of interlinkages among the land labor credit and product markets the landlord is often the supplier of credit he frequently purchases and markets the output of the tenant farmers and often sells raw materials and even consumption goods to his tenant farmers how can this phenomenon be explained what are the welfare consequences of attempts to restrict these practices which often seem to constitute restraints on free trade these are the questions to which this paper is addressed a general set of arguments applicable to both competitive and noncompetitive environments are presented to situations where all the terms of the contract are determined in an optimal way as well as to situations where many of the terms are specified institutionally section i examines interlinked credit and tenancy contracts section ii examines interlinked marketing and tenancy contracts section iii points out the possible interlinking between labor contracts and consumption goods markets and section iv presents the different equilibrium frameworks discussed in the paper such as monopoly monopsony competition and equilibria with surplus labor

subsistence first farm allocation decisions in senegal abstract this paper examines a problem suggested by the senegalese experience but common to many countries of joint production of a subsistence crop millet which is subject to stringent marketing constraints and a cash crop groundnuts sold through established channels empirical implications for the intertemporal pattern of land allocation are drawn and evidence is provided to support the proposed approach

a behavioral model of timber supply abstract a dynamic behavioral model of timber supply is developed the diverse motivation of forest owners is recognized and the implications for optimal harvest patterns is explored this model is particularly relevant for the non industrial private forest nipf sector and has possible uses for public forest management properties of the optimal nipf timber supply curve are established and the effects of various taxes are examined to explore a more structured model simulations are conducted based upon data from a typical redwood region the projections provide indicative results for tax and other timber land policies these results are seen to depend crucially on the forms of the landowner s utility function and upon the function relating standing timber to non income outputs of the forest directions for needed empirical research are then indicated

the endowment effect and the reference state evidence and manipulations abstract recent reports suggest that the endowment effect may be due to conditions under which it is observed and explained by incentives long recognized in standard theory evidence from new experiments reported here provides empirical support for the role of the economic environment on people s perceived reference state and consequently on their valuations as suggested by koszegi and rabin koszegi b rabin m 2006 a model of reference dependent preferences quarterly journal of economics 121 1133 1165 and indicates that the disappearance of the valuation disparity is more likely due instead to conditions that weaken the perception of reference states further these conditions appear to be poor approximations of those that prevail in most cases for which valuations are normally made

an econometric analysis of the old age security motive for childbearing a switching regression for birth interval lengths with endogenous switching is developed to test mead cains contention that parents fertility decisions arise from lexicographic preferences for old age security the model is estimated as a survival model using malaysian data assuming that contraceptors constitute the group of parents who have attained the minimal number of children with which they feel their old age support is secure strong support for cains concept of old age security as the principal interest of those parents who have not yet attained a sufficient number of children appears in these data however the income effect accompanying the provision of alternative means of old age support generates an ambiguous effect on subsequent fertility excerpt

examining risk preferences under high monetary incentives experimental evidence from the people s republic of china several experimental sessions were conducted to elicit certainty equivalents for a sequence of lotteries involving real monetary outcomes the opportunity to conduct sessions in the people s republic of china afforded the ability to offer very large monetary incentives relative to subjects living costs in the highest payoff condition subjects earned three times their normal monthly revenue in the course of a two hour experiment results indicate a statistically significant impact of the level of monetary incentives on revealed risk preferences however even under extreme monetary incentives subjects demanded amounts well in excess of expected value for low probability gain prospects copyright 1992 by american economic association

income risk the tax benefit system and the demand for children because children represent an irreversible commitment parents might hedge against higher income risk by having fewer children we show that under plausible assumptions recent increases in income risk might have reduced prudent parents desired fertility responses to this via the tax benefit system are considered introducing an expected revenue neutral transfer cum child benefit system under proportional taxation which lets the government share the household s income risk increases desired fertility for parents who would choose to have small families in this system s absence pound for pound the targeted child benefit enhances fertility more than the lump sum transfer

reconsidering the effect of market experience on the endowment effect simple exchange experiments have revealed that participants trade their endowment less frequently than standard demand theory would predict list 2003a finds that the most experienced dealers acting in a well functioning market are not subject to this exchange asymmetry suggesting that a significant amount of market experience is required to overcome it in order to understand this market experience eect we introduce a distinction between two types of uncertainty choice uncertainty and trade uncertainty both of which could lead to exchange asymmetry we conjecture that trade uncertainty is most important for exchange asymmetry to test this conjecture we design an experiment where the two treatments impact dierently on trade uncertainty while controlling for choice uncertainty supporting our conjecture we find that forcing subjects to give away their endowment in a series of exchanges eliminates exchange asymmetry in a subsequent test we discuss why markets might not provide sucient

the old age security hypothesis reconsidered abstract that the introduction of a means for transferring present to future consumption other than children in a developing country will reduce the rate of population growth is shown to depend crucially on the assumption that parents do not care about the numbers or the welfare of the children they have when parents do care the conclusion no longer unambiguously follows because the new means for providing for parents old age leads to a positive income effect

adaptive learning in international business building on daniel levinthal s seminal theories on learning adaptation and innovation this article elucidates an adaptive view of organizational learning undertaken by multinational enterprises mnes levinthal s perspectives have tremendous implications for theorizing and examining processes pathways and mechanisms of dynamic learning for mnes competing in a complex environment this article extends these perspectives considering unique organizational traits and environmental characteristics facing mnes for a more nuanced understanding of contexts in which adaptive learning creates global competitive advantage discussion also includes levinthal s perspectives that are not yet adequately extended to but valuable for ib research such as learning mindfulness cognitive search organizational architecture for adaptation and co evolution with technological change we offer additional research questions as well as possible solutions to adaptive learning for international business

willingness to pay and compensation demanded experimental evidence of an unexpected disparity in measures of value aside from possible income effects measures of the maximum amounts people will pay to avoid a loss and the minimum compensation necessary for them to accept it are generally assumed to be equivalent unexpectedly wide variations between these sums however have been noted in survey responses to hypothetical options this paper reports the results of a series of experiments that confronted people with actual money payments and cash compensations the results indicate that the compensation measure of value seems to exceed significantly the willingness to pay measure which would appear to call into some question various rules of entitlement damage assessments and interpretations of indifference curves

income and outcomes a structural model of intrahousehold allocation there is evidence from several sources that one cannot treat many person households as a single decision maker if this is the case then factors such as the relative incomes of the household members may affect the final allocation decisions made by the household we develop a method of identifying how incomes affect outcomes given conventional family expenditure data the basic assumption we make is that household decision processes lead to efficient outcomes we apply our method to a sample of canadian couples with no children we find that the final allocations of expenditures on each partner depend significantly on their relative incomes and ages and on the level of lifetime wealth

when do international human capital enhancing practices benefit the bottom line an ability motivation and opportunity perspective we study the conditions under which firms can capitalize on their international human capital ihc using the ability motivation opportunity amo perspective we conceptualize ihc as ability collaborative climate as motivation and the firm s level of internationalization as opportunity we test three alternative amo models the additive model main effect the combinative model two way interactions and the multiplicative model a three way interaction using a cross industry sample of south korean firms we find support for the multiplicative model specifically the relationship between ihc enhancement practices and firm performance is significant and positive only when both collaborative climate and internationalization are high

cleaning house new perspectives on households and economic development abstract this paper provides a critical review of the recent literature on households and economic development three related points are developed 1 household activities can be analyzed in economic terms particularly if these terms are broadly defined to encompass such factors as risk and uncertainty 2 significant differences between the economic position of men women and children within the patriarchal household mean that it cannot be treated as an undifferentiated unit of analysis 3 microeconomic analysis of the household must be situated within a larger structural analysis of gender and age based inequalities and their interaction with class structure and national position within the world capitalist system

endowment effects in the field evidence from india s ipo lotteries we study a unique field experiment in india in which 1 5 million stock investors face lotteries for the random allocation of shares we find that the winners of these randomly assigned initial public offering ipo lottery shares are significantly more likely to hold them than lottery losers 1 6 and even 24 months after the random allocation this finding strongly evokes laboratory findings of an endowment effect for risky gambles and persists in samples of highly active investors suggesting along with additional evidence that this behaviour is not driven by inertia alone the effect decreases as experience in the ipo market increases but remains even for very experienced investors leading theories of the endowment effect based on reference dependent preferences are unable to fully explain these and other findings in the data