outcome signs question frames and discount rates this study explains why gain loss discount rate differences reported in previous studies cannot be attributed to outcome sign alone but rather must be associated with particular outcome sign question frame combinations to do so it extends loewenstein s 1988 framing model of intertemporal choice to negative outcomes and uses the resulting predictions to interpret and integrate the results of three previous studies comparing subjective discount rates thaler 1981 loewenstein 1988 benzion et al 1989 the new framework reveals previously unidentified linkages among outcome signs question frames and discount rates to investigate whether losses and gains are in fact discounted differently an experiment is conducted that includes a neutral frame intertemporal choice scenario no proposed change in outcome timing for each outcome sign the results show that subjective discount rates vary in a predictable way according to the outcome sign and question frame combination examined

deferring versus expediting consumption the effect of outcome concreteness on sensitivity to time horizon abstract this work examines consumers preferences for consumption timing specifically the authors examine how temporal framing deferring versus expediting of a decision moderates the sensitivity of consumers pattern of discounting to changes in time horizon the results from three experiments show greater decline in consumers discount rates with time horizon i e greater present bias when they defer than when they expedite consumption these results are robust to using monetary and nonmonetary outcomes as well as to different time horizons months days the authors further demonstrate that the different levels of mental representations concreteness triggered by the two decision frames moderate this difference in sensitivity

assets and actions firm specific factors in the internationalization of u s internet firms by providing a nearly instant connection among parties at opposite corners of the world and enabling a variety of commercial exchanges the internet emerged as the technology expected to create a truly global market space internet firms faced the challenge of capitalizing on this development in this paper we examine what firm specific factors are associated with the propensity of pure u s based internet firms to enhance their international presence on the internet by developing country specific websites despite the assertion that all internet firms are born global our findings show that the pursuit of internationalization by internet firms is related to the levels of their intangible assets and strategic activity two types of intangible assets reputation and website traffic are positively related to the degree of internationalization so are the levels of competitive and cooperative activity and the interaction effects between reputation and competitive and cooperative activity these findings suggest that ideas from both resource based theory and research on competitive dynamics can contribute to understanding the internationalization of internet firms

discounting behaviour and the magnitude effect evidence from a field experiment in denmark we evaluate the claim that individuals exhibit a magnitude effect in their discounting behaviour where higher discount rates are inferred from choices made with lower principals all else being equal if the magnitude effect is quantitatively significant it is not appropriate to use one discount rate that is independent of the scale of the project for cost benefit analysis and capital budgeting using data from a field experiment in denmark we find statistically significant evidence of a magnitude effect that is much smaller than is claimed this evidence surfaces only if one controls for unobserved individual heterogeneity in the population

subadditivity patience and utility the effects of dividing time intervals abstract previous work has demonstrated that time discounting is subadditive individuals exhibit more impatience evaluating a delay as divided into sub intervals this paper argues that subdivision affects both components of intertemporal choice the utility function as well as the intertemporal discount function in my first experiment i demonstrate that differential concavity of utility for gains and convexity for losses implies that the discounting of losses is even more subadditive than the discounting of gains individuals display even more relative impatience over divided time intervals for negative amounts of money than for positive amounts of money my second experiment utilizes alternative elicitation methods which impose an intertemporal status quo to highlight these utility effects subadditivity is stronger when delaying an early gain than for hastening a later gain the reverse pattern holds for losses discounting is more subadditive when hastening a later loss than for delaying an earlier loss

a comparative study of inequality and corruption this article argues that income inequality increases the level of corruption through material and normative mechanisms the wealthy have both greater motivation and more opportunity to engage in corruption whereas the poor are more vulnerable to extortion and less able to monitor and hold the rich and powerful accountable as inequality increases inequality also adversely affects social norms about corruption and people s beliefs about the legitimacy of rules and institutions thereby making it easier for them to tolerate corruption as acceptable behavior this comparative analysis of 129 countries using two stage least squares methods with a variety of instrumental variables supports the authors hypotheses using different measures of corruption the world bank s control of corruption index and the transparency international s corruption perceptions index the explanatory power of inequality is at least as important as conventionally accepted causes of corruption such as economic development the autho

a framework to update hofstede s cultural value indices economic dynamics and institutional stability this study offers an update of the hofstede cultural value dimensions we argue that changes in economic conditions are the source of cultural dynamics while the endurance of institutional characteristics provides the foundation for cultural stability it is found that national wealth measured by gdp per capita has a curvilinear relationship with individualism long term orientation and power distance scores relatively speaking uncertainty avoidance and masculinity mainly reflect some rather stable institutional traditions such as language religion climate ethnic homogeneity and legal origin and are less likely to change over time

related lending and banking development does related lending have positive or negative effects on the development of banking systems we analyze a unique cross country data set covering 74 countries from 1990 to 2007 and find that related lending on average does not have any effect on the growth of credit we do find however that there are conditional relationships related lending tends to retard the growth of banking systems when rule of law is weak whereas it tends to promote the growth of banking systems when rule of law is strong we also find that related lending appears to be associated with looting when banks are owned by non financial firms but that it does not do so when non financial firms are owned by banks our results indicate that whether related lending is positive or pernicious depends critically on the institutional context in which it takes place there is no single best policy regarding related lending these findings are robust to alternative specifications including iv regressions

cultural influences on managerial choice an empirical study of employee benefit plans in the united states the objective of this study is to determine the effect of culture on the provision of employee benefits cultural influences have been investigated from a variety of perspectives but not in the context of pension and welfare benefits using unique data this study analyzes the level of coverage of employee benefits in the united states results indicate that culture does have an effect on the provision of these benefits

the fragility of time time insensitivity and valuation of the near and far future we propose that the temporal dimension is fragile in that choices are insufficiently sensitive to it and second such sensitivity as exists is exceptionally malleable unlike other dimensions such as money which are attended by default to test this we axiomatize a constant sensitivity discount function and in four studies we show that the degree of time sensitivity is inadequate relative to the compound discounting norm and strongly susceptible to manipulation time sensitivity is increased by a comparative within subject presentation experiment 1 direct instruction experiment 3 and provision of a visual cue for time duration experiment 4 time sensitivity is decreased using a time pressure manipulation experiment 2 in each study the sensitivity manipulation has an opposite effect on near future and far future valuations increased sensitivity decreases discounting in the near future and increases discounting in the far future in contrast such sensitivity manipulations have little effect on the money dimension

the effects of endowment and loss aversion in managerial stock option valuation assuming a positive influence of stock price volatility on stock option value incentive alignment proponents argue that stock option compensation encourages managerial risk seeking and thus aligns managers and shareholders risk preferences our findings show that stock option holders overvalue unexercisable options relative to options being offered and to normative e g black scholes valuations further the influence of stock price volatility on holders subjective valuations depends on stock price trend in sum results suggest that during stock option valuation managers draw on heuristics that financial options theory and models fail to capture we discuss implications for compensation design and research

national culture and dividend policy this interdisciplinary study examines how national culture affects corporate dividend policies the dividend puzzle is one of the most studied yet unresolved issues in financial economics prior theoretical and empirical research has suggested several explanations of the dividend puzzle that are rooted mainly in agency asymmetric information bird in hand and pecking order theories the main intuition behind our analysis is that dividend policy may be determined not only by an objective assessment of the severity of agency and asymmetric information problems within a firm but also by management s and investors subjective perceptions of these problems which hinge on their national culture using schwartz s national culture dimensions conservatism and mastery we find that conservatism is positively related and mastery negatively related to dividend payouts for a sample of 27 462 firm years from 21 countries between 1995 and 2007 these effects are robust to controls for a wide variety of other determinants of dividend policy including investor protection stock market performance financial system configuration tax advantage economic development and dividend catering premium and to alternative culture proxies and sub period windows our findings that national culture affects perceptions of and responses to agency and information asymmetry have important implications for policymakers and multinational enterprises

assessing the effects of culture on managerial attitudes a three culture test cross cultural studies are inherently difficult because the typical research design fails to differentiate cultural from other environmental influences the present study uses a research design that attempts to isolate the influence of culture japanese chinese and mexican managers their ethnic american counterparts and anglo americans are used to test the model results indicate unique persistent cultural characteristics with the cultural effect varying among the three groups of managers

impatience incentives and obesity this paper explores the relationship between time preferences economic incentives and body mass index bmi using data from the 2006 national longitudinal survey of youth we rst show that greater impatience increases bmi and the likelihood of obesity even after controlling for demographic human capital occupational and nancial characteristics as well as risk preference next we provide evidence of an interaction

cronyism a cross cultural analysis the devastating economic effects of the asian financial crisis and us corporate scandals have underscored the need to strengthen corporate governance provisions although cronyism has been suggested as a leading cause of the two crises it has received little attention from scholars in this paper we analyze the concept of cronyism and argue that it comes in various guises arising from different motivational bases and power dependence relations we distinguish cronyism from related constructs and posit that it is a form of corruption with different dynamics from other forms we advance propositions on its likelihood of occurrence across cultures and develop a typology of cronyist exchanges

which dimensions of culture matter for long run growth we present empirical evidence that among a variety of cultural dimensions the individualism collectivism dimension based on hofstede s 2001 data is the most important and robustly significant effect of culture on long run growth other dimensions that have a significant effect albeit less robust are generally strongly correlated with individualism and convey similar information we found no significant or robust effect on growth from cultural dimensions that are independent from the individualism collectivism cleavage

people s opium religion and economic attitudes since max weber there has been an active debate on the impact of religion on people s economic attitudes much of the existing evidence however is based on cross country studies in which this impact is confounded by differences in other institutional factors we use the worldvalues surveys to id entify the relationship between intensity of religious beliefs and economic attitudes controlling for country fixed effects we study several economic attitudes towardcooperation the government working women legal rules thriftiness andthe market economy we also distinguish across religious denominations differentiating on whether a religion is dominant in a country we find that on average religious beliefs are associated with good economic attitudes where good is defined as conducive to higher per capita income andgrowth yet religious people tendto be more racist andless favorable with respect to working women these effects differ across religious denominations overall we find that christian religions are more positively associatedwith attitudes conducive to economic growth r 2003 elsevier science b v all rights reserved jel classification a1 e0 n4 z1

the impact of journals and authors on international business research a citational analysis of jibs articles in this paper we use citational analysis to examine the influence of individuals and disciplines on international business research we collected citational data over the ten year period 1984 to 1993 from every issue of the journal of international business studies we found that management economics marketing and finance disciplines have had significant influence on international business research and identified researchers such as dunning porter vernon casson rugman and hofstede as having made significant contributions to international business research

deriving benefit measures with higher precision a study of economic values of air quality a calibration strategy using ridge regression to generate more precise estimates for a particular parameter in a model is proposed formulae to compute the proposed ridge estimates from standard ordinary least squares ols results are provided the strategy is applied to recomputing marginal effects of air pollution on property values for 30 housing studies results show that ridge estimates are superior to the ols estimates under the mean squared error criterion the same strategy can be used to reestimate key parameters of interest in other applications such as price elasticities for demand forecasts or the value of a statistical life from hedonic wage regressions

frames of mind in intertemporal choice recent research has demonstrated that choices between gambles are systematically influenced by the way they are expressed kahneman and tversky s prospect theory kahneman d a tversky 1979 prospect theory an analysis of decision under risk econometrica472 363 391 explains many of these framing effects as shifts in the point of reference from which prospects are evaluated this paper demonstrates the applicability of the reference point concept to intertemporal choice three experiments demonstrate that when people choose between immediate and delayed consumption the reference point used to evaluate alternatives can significantly influence choice the first study elicited relative preference for immediate and delayed consumption using three methods each of which differently framed choices between alternatives offering identical end state consumption the conventional discounted utility model predicts that the three methods of elicitation should yield similar estimates of time preference but preferences were found to differ in accordance with a reference point model the second and third studies extend and replicate the results from the first the third using real rather than hypothetical choices

decision making over time and under uncertainty a common approach this paper considers a number of parallels between risky and intertemporal choice we begin by demonstrating a one to one correspondence between the behavioral violations of the respective normative theories for the two domains i e expected utility and discounted utility models we argue that such violations or preference reversals are broadly consistent with three propositions about the weight that an attribute receives in both types of multiattribute choice specifically it appears that 1 if we add a constant to all values of an attribute then that attribute becomes less important 2 if we proportionately increase all values of an attribute or if we change the sign of an attribute from positive to negative then that attribute becomes more important the generality of these propositions as well as the constraints they would impose on separable representations of multiattribute preferences is discussed

wealth culture and corruption this paper examines the impact of national wealth income distribution government size and four cultural variables on the perceived level of corruption in a country the study finds that corruption is significantly correlated to gnp per capita power distance masculinity and uncertainty avoidance significant interaction effects occur in collectivistic and high power distance countries suggestions for future research are developed

lost in translation the effect of cultural values on mergers around the world we find strong evidence that three key dimensions of national culture trust hierarchy and individualism affect merger volume and synergy gains the volume of cross border mergers is lower when countries are more culturally distant in addition greater cultural distance in trust and individualism leads to lower combined announcement returns these findings are robust to year and country level fixed effects time varying country pair and deal level variables as well as instrumental variables for cultural differences based on genetic and somatic differences the results are the first large scale evidence that cultural differences have substantial impacts on multiple aspects of cross border mergers

national culture and corporate debt maturity abstract we investigate the influence of national culture on corporate debt maturity choice based on the framework of williamson we argue that culture located in social embeddedness level can shape contracting environments by serving as an informal constraint that affects human actors incentives and choices in market exchange we therefore expect national culture to be related to debt maturity structure after controlling for legal political financial and economic institutions using hofstede s four cultural dimensions uncertainty avoidance collectivism power distance and masculinity as proxies for culture and using a sample of 114 723 firm years from 40 countries over the 1991 2006 period we find robust evidence that firms located in countries with high uncertainty avoidance high collectivism high power distance and high masculinity tend to use more short term debt we interpret our results as consistent with the view that national culture helps explain cross country variations in the maturity structure of corporate debt

national culture and life insurance consumption this cross disciplinary study examines the way national culture affects consumption patterns of life insurance across countries life insurance is a service that is abstract complex and focused on unsure future benefits because of the uncertainty and ambiguity inherent in the life insurance product consumers are more likely to respond according to their cultural prescriptions our research hypotheses are tested empirically using hofstede s cultural dimensions and data from 1976 2001 across 41 countries the findings show that individualism indeed has a significant positive effect on life insurance consumption whereas power distance and masculinity femininity have significant negative effects the results are robust even after controlling for economic institutional and demographic determinants

a power law type of time preference on intertemporal choices abstract discount utility based on utility theory is used to study human decision behaviors under the consideration of time preference it assumes that by means of the axiomatic system of rationality it is possible to quantify human beings utilities by some explicable models for intertemporal decision making recent studies have been based on two basic models the exponential and the hyperbolic discount models these two types of model have been proved to be either too fast for discounting or too restricted for fitting human beings discounting behaviors in this study a power law discount model is proposed axiomatic approach is used to ascertain the existence of the power law discount utility and empirical investigations are implemented to verify the effectiveness of the proposed model

financial and legal constraints to growth does firm size matter using a unique firm level survey database covering 54 countries we investigate the effect of financial legal and corruption problems on firms growth rates whether these factors constrain growth depends on firm size it is consistently the smallest firms that are most constrained financial and institutional development weakens the constraining effects of financial legal and corruption obstacles and it is again the small firms that benefit the most there is only a weak relation between firms perception of the quality of the courts in their country and firm growth we also provide evidence that the corruption of bank officials constrains firm growth

the identification of urban employment subcenters abstract the purpose of this paper is to propose empirical criteria for the identification of urban employment subcenters it is suggested that gross employment density employment divided by total land area and the employment population ratio are the best measures to identify an urban zone as an employment subcenter these measures are used to identify employment subcenters in the chicago smsa in 1970 and previous studies of housing and land prices in chicago are reviewed

values versus regulations how culture plays its role this study examines the impact of culture on regulation and corruption our empirical results suggest that cultural values have significant effects on countries regulatory policies levels of corruption and economic development contrary to the conclusions drawn by others this study shows no significant relationship between the regulatory policies of countries and their perceived levels of corruption thus evidence of the public choice view toward entry regulation derived in related studies seems to be at least attenuated

a new database on the structure and development of the financial sector this article introduces a new database of indicators of financial structure and financial development across countries and over time the database is unique in that it combines a wide variety of indicators that measure the size activity and efficiency of financial intermediaries and markets it improves on previous efforts by presenting data on the public share of commercial banks introducing indicators of the size and activity of nonbank financial institutions and constructing measures of the size of bond and primary equity markets this article introduces a new database the first to provide comprehensive measures of the development structure and performance of the financial sector this database is the first to define and construct indicators of the size and activity of nonbank financial intermediaries such as insurance companies pension funds and non deposit money banks it is also the first to include indicators of the size of primary equity markets and primary and secondary bond markets in constructing the database authors carefully deflate measures and match stock and flow variables

hedonic housing price indices and secondary employment centers the monocentric model of the city concludes that the price of housing services varies inversely with travel time to the central business district cbd holding location specific amenities constant because households lower their bid prices for housing as commutation cost increases indeed residential locational equilibrium in the monocentric city requires a negative price gradient however empirical testing has revealed at best lukewarm support for the negative price gradient 2 for example estimates of hedonic housing price indices by berry 3 and daniels 4 yield statistically significant positive relationships between price and distance or travel time to the cbd while kain and quigley 6 lapham 7 and thaler 14 find no statistically significant relationship the lack of consistent empirical support for a monotonically negative price gradient need not be disturbing if the city violates the assumptions of the monocentric city model specifically secondary employment centers could cause the price gradient from the cbd eventually to become positive and achieve a local maximum in the neighborhood of the secondary center failure to control for distance or travel time to secondary centers may explain positive and statistically insignificant negative price gradients that

do lenders favor politically connected firms rent provision in an emerging financial market corruption by the politically connected is often blamed for economic ills particularly in less developed economies using a loan level data set of more than 90 000 rms that represents the universe of corporate lending in pakistan between 1996 and 2002 we investigate rents to politically connected rms in banking classifying a rm as political if its director participates in an election we examine the extent nature and economic costs of political rent provision we nd that political rms borrow 45 percent more and have 50 percent higher default rates such preferential treatment occurs exclusively in government banks private banks provide no

underdevelopment and the economics of corruption a game theory approach abstract previous attempts to treat corruption are surveyed critically a game theory approach is preferred on the grounds that it can most effectively explain the basis for decisions of reasonable men to be corrupt a simple model is presented showing how bribery might be a dominant strategy a prisoner s dilemma type of situation emerges with the added complication that the judge and jailer may be corrupt other conclusions are that one official will not accept bribes from more than one firm it is impossible to predict which firm will win the contract no obvious solution emerges and legal remedies are discounted this paper then reviews the principal general equilibrium effects and concludes that their likely effect on economic development is negative

integration oriented strategies host market corruption and the likelihood of foreign subsidiary exit from emerging markets extant research has found that more pronounced levels of corruption in foreign host emerging markets increase the likelihood that subsidiaries established by multinational enterprises mnes from developed countries will exit we synthesize insights from the organizational perspective of corruption and the integration responsiveness paradigm to propose that integration oriented strategies will weaken the positive relationship between corruption and the likelihood of exit at high levels of host market corruption we develop and test hypotheses pertaining to the main effect of corruption on the likelihood of subsidiary exit as well as the moderating impacts of a firm s equity ownership strategy and its expatriate staffing strategy upon this relationship we theorize that uncertainty operates as the mechanism that underpins the corruption market exit relationship and that an mne s strategic choices with respect to its subsidiary investments contribute to reducing this uncertainty we find that an increase in the foreign investing mne s equity ownership share negatively moderates the positive relationship between corruption and the likelihood that foreign subsidiaries established by developed market mnes will exit host emerging markets when corruption is high however the marginal effects results do not support the expatriate staffing strategy hypothesis our work provides guidance to developed country mnes that seek insights with respect to the utility of strategies that might be implemented in host emerging markets characterized by more pronounced levels of corruption

the cultural relativity of organizational practices and theories this paper summarizes the author s recently published findings about differences in people s work related values among 50 countries in view of these differences ethnocen tric management theories those based on the value system of one particular country have become untenable this concept is illustrated for the fields of leadership organization and motivation a key issue for organization science is the influence of national cultures on introduction management twenty or even 10 years ago the existence of a relationship be management and tween management and national cultures was far from obvious to many and it national cultures may not be obvious to everyone even now in the 1950s and 60s the dominant be lief at least in europe and the u s was that management was something univer sal there were principles of sound management which existed regardless of na tional environments if national or local practice deviated from these principles it was time to change local practice in the future the universality of sound manage ment practices would lead to societies becoming more and more alike this ap plied even to the poor countries of the third world which would become rich as well and would be managed just like the rich countries also the differences be tween management in the first and second world capitalist and socialist would disappear in fact under the surface they were thought to be a lot smaller than was officially recognized this way of thinking which dominated the 1950s and 60s is known as the convergence hypothesis during the 1970s the belief in the unavoidable convergence of management prac tices waned it was too obviously in conflict with the reality we saw around us at the same time supranational organizations like the european common market which were founded very much on the convergence belief had to recognize the stubbornness of national differences even within existing nations regional dif ferences became more rather than less accentuated the welsh the flemish the basques the bangladeshi the quebecois defended their own identity and this was difficult to reconcile with a management philosophy of convergence it slowly became clear that national and even regional cultures do matter for management the national and regional differences are not disappearing they are here to stay in fact these differences may become one of the most crucial problems for man agement in particular for the management of multinational multicultural orga nizations whether public or private

culture legal origins and financial development this study proposes that countries with a cultural orientation toward individualism tend to enjoy a higher level of financial development estimates based on cross country data lend strong support to this hypothesis specifically the results indicate that existing disparity in the level of financial development is significantly correlated with variation in the extent of individualism across countries where a one standard deviation increase in individualism is associated with 0 631 standard deviations improvement in the level of financial development the results are robust to a number of considerations additional results provide some support to the notion that individualistic culture and legal origin may serve as complements rather than substitutes to each other jel o40 o50 z10

national culture the missing country level determinant of corporate governance it is well known that firm level corporate governance practices vary mainly between rather than within countries but country level factors such as legal and financial institutions explain less than 50 of this cross country variation in this article we show that two dimensions of national culture individualism and uncertainty avoidance capture about 90 of the country fixed effects and outperform the country level explanatory variables used in prior literature we argue that culture works through a tradeoff between managerial expertise and certainty of control a tradeoff largely overlooked by prior literature that captures a country s preference for the anglo saxon approach versus the direct control approach for governance consistent with this argument we find that the effect of culture on corporate governance varies across firms with different needs for managerial expertise and certainty of control we also find that culture interacts with other factors to determine firm level governance

personal selling elasticities a meta analysis abstract this article presents a meta analysis of prior econometric estimates of personal selling elasticity that is the ratio of the percentage change in an objective ratio scaled measure of sales output e g dollar or unit purchases to the corresponding percentage change in an objective ratio scaled measure of personal selling input e g dollar expenditures the authors conduct a meta analysis of 506 personal selling elasticity estimates drawn from analyses of 88 empirical data sets across 75 previous articles they find a mean estimate of current period personal selling elasticity of 34 they also find that elasticity estimates are higher for early life cycle stage offerings higher from studies set in europe than from those set in the united states and smaller in more recent years in addition elasticity estimates are affected significantly by analysts use of relative rather than absolute sales output measures by cross sectional rather than panel data by omission of promotions by lagge

an anticipative hyperbolic discount utility on intertemporal decision making discount utility is facilitated to scrutinize human decision behaviors for different points in time under the consideration of time preference recent studies are extended from two basic models which are the exponential and the hyperbolic discount models and the more popular hyperbolic discount model is well recognized for resolving the effects of preference reversal and is less steeply discounting than the exponential discount model however to enhance the capability of explaining intertemporal decision making behavior an anticipative hyperbolic discount utility model was proposed which revised the conventional hyperbolic discount utility by introducing the anticipative parameters under the consideration of anticipation of future gains or losses an empirical investigation was employed to validate the effectiveness of the proposed anticipative hyperbolic discounting utility model which was able to empirically go beyond the traditional hyperbolic discounting utility model also the proposed anticipative hyperbolic model is capable of dealing with the anomalies of preference reverse and framing effects

habits and the anomalies in intertemporal choice this paper analyzes a model of discounted utility under habit formation habit formation means that utility in each period is determined by the difference between the received outcome and the customary outcome at that point in time preferences are rational in the sense that the decision maker correctly anticipates the habit formation process and behaves in a dynamically consistent manner i e plans are truly carried out the purpose is to demonstrate that this generalization of the discounted utility model accounts jointly and in a meaningful way for the most striking anomalies with respect to classical discounted utility theory the common difference effect is explained first this effect also called decreasing impatience effect has usually been viewed as evidence against exponential discounting then the frequently observed preference for increasing sequences of outcomes is examined such preference under the traditional discounted utility model would be regarded as a paradoxical case of negative discounting a discussion of the descriptive prescriptive and normative values of the model is included

discount rates inferred from decisions an experimental study two hundred and four students of economics and finance participated in an intertemporal choice experiment which manipulated three dimensions in a 4 4 4 factorial design scenario postponing a receipt postponing a payment expediting a receipt expediting a payment time delay 0 5 1 2 and 4 years and size of cashflow 40 200 1000 and 5000 individual discount rates were inferred from the responses and then used to test competitively four hypotheses regarding the behavior of discount rates the classical hypothesis asserting that the discount rate is uniform across scenarios time delays and sums of cashflow was flatly rejected a market segmentation approach was found lacking the results support an implicit risk hypothesis according to which delayed consequences are associated with an implicit risk value and an added compensation hypothesis which asserts that individuals require compensation for a change in their financial position

the today and tomorrow of kids time preferences and educational outcomes of children abstract we experimentally investigate the distribution of children s time preferences along gender and racial lines we find that boys are more impatient than girls and black children are more impatient than white children black boys have the highest discount rates of all groups most importantly we show that impatience has a direct correlation with behavior that is predictive of economic success an increase of one standard deviation in the discount rate is associated with an increase in the number of disciplinary referrals that a child has the following school year by 14 our results suggest that impatience might play an important role in determining the success of performance incentive programs for school children

national culture and the choice of exchange rate regime abstract based on the social analysis framework of williamson we argue that national culture especially the individualism collectivism dimension located in the social embeddedness level can guide behaviors and decisions in a country including the choice of exchange rate regime we argue that individualistic societies are more likely to choose floating regimes because their economic agents are independent overconfident and have higher levels of risk tolerance individualistic societies are also associated with better financial development fewer capital controls and more democratic institutions which are all tied to a higher probability of choosing a floating exchange rate regime we use data on 78 countries over the 1976 2014 period and we control for common determinants of exchange rate regimes we find that individualistic countries have a significantly higher probability of implementing a floating regime than a fixed regime our evidence is robust to using an instrumental variables approach an alternative estimation technique an alternative regime classification alternative proxies for culture a subsample analysis and additional controls we also find that other cultural dimensions uncertainty avoidance power distance and masculinity can influence the choice of exchange rate regime but their effect is weaker than that of individualism

collectivism and corruption in commercial loan production how to break the curse recent research suggests that collectivism breeds corruption in bank lending this finding together with the stickiness of culture poses a direct challenge to economic growth in collectivist societies in this paper we address this grim outlook by examining the types of firms that are susceptible to the detrimental effect of collectivism on lending integrity and the formal institutions that can help alleviate such effect we find that the adverse effect of collectivism on bank corruption is more severe in small and medium sized firms privately owned firms and non exporting firms while it is considerably weaker in countries with more effective private monitoring a higher lower fraction of foreign owned government owned banks a more competitive banking sector better information sharing and stronger legal and political institutions our findings are robust to using alternative measures of collectivism and alternative dependent variables these results highlight how firm level characteristics and formal institutions interact with collectivism in affecting firms access to bank credit

discounting by intervals a generalized model of intertemporal choice according to most models of intertemporal choice an agent s discount rate is a function of how far the outcomes are removed from the present and nothing else this view has been challenged by recent studies which show that discount rates tend to be higher the closer the outcomes are to one another subadditive discounting and that this can give rise to intransitive intertemporal choice we develop and test a generalized model of intertemporal choice the discounting by intervals dbi model according to which the discount rate is a function of both how far outcomes are removed from the present and how far the outcomes are removed from one another the model addresses past challenges to other models most of which it includes as special cases as well as the new challenges presented in this paper our studies show that when the interval between outcomes is very short discount rate tends to increase with interval length superadditive discounting in the discussion we place our model and evidence in a broader theoretical context

economics and underdetermination a case study of urban land and housing economics underdetermination associated with the duhem quine thesis is a familiar if under researched theme in economics in the light of this we examine the development of urban land and housing economics through its cartesian dualistic delineation of theory and data the contemporary mainstream approach appears unable to circumvent the problem of underdetermination in effect it employs the strong version of duhem quine in its retention of the assumption of a single unitary competitive market and associated access space trade off conversely we highlight the affinity of ely s and the later columbia school s approach to pragmatists dewey and peirce which provides a more fruitful basis for explanation

anticipation and the valuation of delayed consumption this paper presents a model of intertemporal choice that incorporates savoring and dread i e utility from anticipat ion of delayed consumption the model explains why an individual with positive time preference may delay desirable outcomes or get unpleas ant outcomes over with quickly contrary to the prediction of convent ional formulations of intertemporal choice implications of savoring and dread for savings behavior empirical estimation of discount rate s and public policy efforts to combat myopic behavior are explored the model provides an explanation for common violations of the indepe ndence axiom as applied to intertemporal choice copyright 1987 by royal economic society

expectations and urban housing prices this paper presents a simple model of price expectations and urban housing prices the empirical results for a sample of houses sold in the city of chicago during 1970 1972 indicate that the expectation of nominal price increase estimated as an extrapolation of past price increases in the neighborhood have a significant impact on the current price

spatial association and heterogeneity issues in land price models urban planners frequently use regression analysis for the empirical estimation of land price models which are used to investigate the spatial structure of a city or to calculate the implicit price of environmental characteristics a concern with this kind of analysis is that often spatially associated or heterogeneous data are used which leads to estimation pitfalls most notably spatial autocorrelation and model structural instability over space in this paper we introduce a modelling methodology that combines a spatial autoregression with a switching regression to incorporate effectively both association and heterogeneity as part of the analysis in addition using sendai city in north eastern japan as a case study we use local statistics of spatial association to assist us in the exploration and definition of heterogeneous regimes finally we show how some measures commonly used to counter spatial effects fail at times thus highlighting the importance of a spatial modelling methodology such as th

tying odysseus to the mast evidence from a commitment savings product in the philippines we designed a commitment savings product for a philippine bank and implemented it using a randomized control methodology the savings product was intended for individuals who want to commit now to restrict access to their savings and who were sophisticated enough to engage in such a mechanism we conducted a baseline survey on 1777 existing or former clients of a bank one month later we offered the commitment product to a randomly chosen subset of 710 clients 202 28 4 percent accepted the offer and opened the account in the baseline survey we asked hypothetical time discounting questions women who exhibited a lower discount rate for future relative to current trade offs and hence potentially have a preference for commitment were indeed significantly more likely to open the commitment savings account after twelve months average savings balances increased by 81 percentage points for those clients assigned to the treatment group relative to those assigned to the control group we conclude that the savings response represents a lasting change in savings and not merely a short term response to a new product

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

egalitarianism and international investment abstract this study identifies how country differences on a key cultural dimension egalitarianism influence international investment flows a society s cultural orientation toward egalitarianism is manifested by intolerance for abuses of market and political power and a desire for protecting less powerful actors we show egalitarianism to be based on exogenous factors including social fractionalization dominant religion circa 1900 and war experience from the 19th century we find a robust influence of egalitarianism distance on cross national flows of bond and equity issuances syndicated loans and mergers and acquisitions an informal cultural institution largely determined a century or more ago egalitarianism exercises its effect on international investment via an associated set of consistent contemporary policy choices but even after controlling for these associated policy choices egalitarianism continues to exercise a direct effect on cross border investment flows likely through its direct influence on managers daily business conduct

who owns the media the authors examine patterns of media ownership in 97 countries around the world they find that almost universally the largest media firms are controlled by the government or by private families government ownership is more pervasive in broadcasting than in the printed media government ownership is generally associated with less press freedom fewer political and economic rights inferior governance and most conspicuously inferior social outcomes in education and health the adverse effects of government ownership on political and economic freedom are stronger for newspapers than for television the adverse effects of government ownership of the media do not appear to be restricted solely to instances of government monopoly the authors present a range of evidence on the adverse consequences of state ownership of the media state ownership of the media is often argued to be justified on behalf of the social needs of the disadvantaged but if their findings are correct increasing private ownership of the media through privatization or by encouraging the entry of privately owned media can advance a variety of political and economic goals especially those of meeting the social needs of the poor

intertemporal tradeoffs for gains and losses an experimental measurement of discounted utility this article provides a parameter free measurement of utility in intertemporal choice and presents new and more robust evidence on the discounting of money outcomes intertemporal utility was concave for gains and convex for losses consistent with a hypothesis put forward by loewenstein and prelec 1992 discount rates declined over time but less so than previously observed under the assumption of linear utility for approximately 40 of our subjects constant discounting provided the best fit the remaining 60 were most consistent with harvey s 1986 power discounting our data provide little support for the popular quasi hyperbolic model which is widely used in economics today we observed an asymmetry in the discounting of gains and losses that unlike earlier findings cannot be explained by a framing effect

bank supervision and corruption in lending abstract which commercial bank supervisory policies ease or intensify the degree to which bank corruption is an obstacle to firms raising external finance based on new data from more than 2500 firms across 37 countries this paper provides the first empirical assessment of the impact of different bank supervisory policies on firms financing obstacles we find that the traditional approach to bank supervision which involves empowering official supervisory agencies to monitor discipline and influence banks directly does not improve the integrity of bank lending rather we find that a supervisory strategy that focuses on empowering private monitoring of banks by forcing banks to disclose accurate information to the private sector tends to lower the degree to which corruption of bank officials is an obstacle to firms raising external finance in extensions we find that regulations that empower private monitoring exert a particularly beneficial effect on the integrity of bank lending in countries with sound legal institutions

the normalization of deviant organizational practices wage arrears in russia 1991 98 we apply a normalization of deviance model to understand the prevalence of the illegal practice of wage arrears the delayed payment of wages in russia during the 1990s viewing organizational dev

which model of capitalism best delivers both wealth and equality capitalism is the dominant economic system adopted throughout the global economy but there are many different models of capitalism practiced depending on what the society decides economic effectiveness is in this study we assert that an effective economy simultaneously achieves two seemingly divergent outcomes it 1 creates economic wealth efficiently and 2 shares that wealth equitably employing insights from whitley s national business systems framework and fuzzy set analysis we examine how national institutions collectively configure with respect to the overall level of equitable wealth creation within 48 developed and developing economies we find that three configurations are associated with relatively high levels of equitable wealth creation and another three are associated with relatively low levels as such our analysis supports the notion of equifinality that there is no one optimal model of capitalism furthermore we begin to demonstrate that these models of capitalism are constantly evolving but their evolution is generally slow even when considering the practice of capitalism before and after the 2008 global economic crisis we discuss the implications of these findings for the study of international business with a special emphasis on considering a more holistic context for exploring how multinational enterprises interact with their institutional environment s

an empirical study on intertemporal decision making under risk this study compares time preference in the cases of certainty and risk we analyze both matching and choice behavior we find that violations of the stationarity axiom are restricted to matching behavior both for certainty and risk we also compare the discounting of certain and risky outcomes as well as the discounting of gains and losses in matching tasks certain outcomes are discounted more than risky ones we could not confirm these results in a choice task gains and losses are not found to be discounted at different rates

hedonic models and air pollution twenty five years and counting this paper reports a meta analysis of how effectively hedonic property models have detected the influence of air pollution on housing prices probit estimates are reported describing how data model specification and local property market conditions in cities represented in thirty seven studies influence the ability of hedonic models to uncover negative statistically significant relationships between housing prices and air pollution measures

collectivism and corruption in bank lending this paper examines how national culture and collectivism in particular influences corruption in bank lending we hypothesize that interdependent self construal and particularist norms in collectivist countries lead to a higher level of lending corruption through their influence both on the interactions between bank officers and bank customers and on the dynamics among bank colleagues using a sample covering 3835 firms across 38 countries we find strong evidence that firms domiciled in collectivist countries perceive a higher level of lending corruption than firms domiciled in individualist countries in terms of economic magnitude the effect of collectivism is substantially larger than the effects of other cultural dimensions uncertainty avoidance masculinity and power distance and institutional factors identified in prior studies bank supervision bank competition information sharing and media monitoring we further find that the positive relationship between collectivism and lending corruption is not driven by endogeneity and that it is robust to different measures of bank corruption different measures of collectivism and different estimation methods finally we find that the link between collectivism and lending corruption cannot be explained by the role of the government in the economy political connections biased responses from disgruntled borrowers or relationship lending

from the editors endogeneity in international business research this essay builds on the exposition by thomas et al and focuses on analyzing cause and effect in international business research we attempt to explain how endogeneity problems occur and why they are so prevalent in international business research in a non technical fashion we then discuss the importance of explicitly identifying how the chosen research design best approximates a randomized controlled experiment finally we provide some guidelines on achieving this goal and emphasize the practices that seem most relevant to jibs reviewers in evaluating high quality international business research

corruption in bank lending to firms cross country micro evidence on the beneficial role of competition and information sharing abstract building on the important study by beck demirguc kunt and levine 2006 bank supervision and corruption in lending journal of monetary economics 53 2131 2163 we examine the effects of both borrower and lender competition as well as information sharing via credit bureaus registries on corruption in bank lending using the unique world bank data set wbes covering more than 4 000 firms across 56 countries with information on credit bureaus registries assembled by djankov mcliesh and shleifer 2007 private credit in 129 countries journal of financial economics 84 299 329 and bank regulation data collected by barth caprio and levine 2006 rethinking bank regulation till angels govern cambridge university press new york to measure bank competition and information sharing we find strong evidence that both banking competition and information sharing reduce lending corruption and that information sharing also helps enhance the positive effect of competition in curtailing lending corruption we also find that the ownership structure of firms and banks legal environment and firm competition all exert significant impacts on lending corruption