the dynamics of the leverage cycle abstract we present a simple agent based model of a financial system composed of leveraged investors such as banks that invest in stocks and manage their risk using a value at risk constraint based on historical observations of asset prices the value at risk constraint implies that when perceived risk is low leverage is high and vice versa a phenomenon that has been dubbed pro cyclical leverage we show that this leads to endogenous irregular oscillations in which gradual increases in stock prices and leverage are followed by drastic market collapses i e a leverage cycle this phenomenon is studied using simplified models that give a deeper understanding of the dynamics and the nature of the feedback loops and instabilities underlying the leverage cycle we introduce a flexible leverage regulation policy in which it is possible to continuously tune from pro cyclical to countercyclical leverage when the policy is sufficiently countercyclical and bank risk is sufficiently low the endogenous oscillation disappears and prices go to a fixed point while there is always a leverage ceiling above which the dynamics are unstable countercyclical leverage policies can be used to raise the ceiling we also study the impact on leverage cycles of direct temporal control of the bank s riskiness via the bank s required value at risk quantile under such a rule the regulator relaxes the value at risk quantile following a negative stock price shock and tightens it following a positive shock while such a policy rule can reduce the amplitude of leverage cycles its effectiveness is highly dependent on the choice of parameters finally we investigate fixed limits on leverage and show how they can control the leverage cycle

what is capital economists and sociologists have changed its meaning should it be changed back this is a pre copyedited author produced pdf of an article accepted for publication in cambridge journal of economics following peer review the version of record geoffrey h hodgson what is capital economists and sociologists have changed its meaning should it be changed back cambridge journal of economics vol 38 5 1063 86 september 2014 is available online at http dx doi org 10 1093 cje beu013

does culture affect behavior and performance of firms the case of joint ventures in china this study applies a resource based view of the firm to analyze data from a sample of 898 joint venture firms in china including both joint ventures established by overseas chinese and by firms from western cultures it is hypothesized that culture could influence the timing of entry of joint ventures their investment preferences and performance anovas and regressions were conducted and the results suggest the impact of cultural as well as technological resources this paper concludes with a discussion on the implications of the findings

corporate environmental responsiveness in india lessons from a developing country abstract we examine corporate environmental responsiveness in business organizations in india based on theoretically informed case analysis we operationalize corporate environmental responsiveness as a two order construct we find that level one the lower level responsiveness is driven by pressures arising out of powerful supply chain customers and institutional pressures resulting from internationalization the drivers for organizations at level two the higher level responsiveness are associated with organizational identities and cultures rooted in a long history of social responsiveness

who appropriates centrality rents the role of institutions in regulating social networks in the global islamic finance industry this study explains and tests the effects of country level institutions on the distribution of centrality rents between two sets of actors in an interorganizational network building on the literature on corporate elites we propose that a cohesive elite following organizational logics other than profit maximization diverts centrality rents and induces costs on firms and that macro institutions act as external governance mechanisms to shape this relationship we develop our theory in the emerging islamic finance industry where shariah scholars connect firms and constitute a religious corporate elite while central scholars in this network create legitimacy for firms they also shirk and cause information leakage suggesting a negative centrality performance relationship for the firms country level institutions such as government regulation and democracy we argue ameliorate these effects by influencing this religious elite s institutional logic and restraining their actions while institutions developed from within the industry strengthen the power of the elite testing our theory in a network of 367 scholars and 396 institutions over 31 countries using multi level methods we indeed find a negative centrality performance relationship that is ameliorated by stronger government regulation but exacerbated by better developed industry specific institutions as well as a negative relationship between democratic and regulatory institutions and centrality

an institution based view of international business strategy a focus on emerging economies leveraging the recent research interest in emerging economies this perspective paper argues that an institution based view of international business ib strategy has emerged it is positioned as one leg that helps sustain the strategy tripod the other two legs consisting of the industry and resource based views we then review four diverse areas of substantive research 1 antidumping as entry barriers 2 competing in and out of india 3 growing the firm in china and 4 governing the corporation in emerging economies overall we argue that an institution based view of ib strategy in combination with industry and resource based views will not only help sustain a strategy tripod but also shed significant light on the most fundamental questions confronting ib such as what drives firm strategy and performance in ib

a process model of capability development lessons from the electronic commerce strategy at bolsa de valores de guayaquil past literature using the resource based view of the firm has concentrated on attributes of firms capabilities and on strategies for exploiting existing firm specific assets comparatively little research has been conducted on how a firm develops manages and deploys capabilities to support its business strategy this study seeks to understand the process of capability development and to establish a model that has both theoretical and practical significance a longitudinal case study of the electronic commerce strategy formation and implementation at bolsa de valores de guayaquil an ecuadorian stock exchange yielded qualitative data that allowed inductive modeling of the capability development process the model reveals that capability development in support of a new strategy is a gradual process that is cumulative expansive and very dependent on the way that difficult to imitate resources and actions are combined at bolsa de valores de guayaquil actions that supported the development of the firm s capability to strategize seem to have contributed the most in the initial phase of the strategy formation and implementation actions that helped the development of the firm s capability to be flexible appear to have contributed the most during the middle phase and actions that supported the development of the firm s capabilities to integrate and engender trust seem to have contributed the most in the final phase in addition the key resources that supported the overall capabilities development process included leadership organizational culture information technology long term view and social networks implications of this model for both research and practice are discussed

strategic responses to resource management pressures in agriculture institutional gender and location effects sustainable management of natural resources by farmers is under increasing public scrutiny in australia the case of water unsustainably used and stored by agricultural businesses has gained attention with communities in catchments potentially deprived of water and placed at downstream risk yet sustainable water management institutional policy mechanisms remain disjointed around the country the study reported here applies a strategic response typology to a survey of 404 farmers in four different institutional environments in australia to explore their responses to institutional pressures findings demonstrate a convergence in typologies that relate to farmers organising each other and communities influencing and networking for the benefit of agricultural resource management thereby questioning the traditional continuum of resistance furthermore the mid range typology avoidance emerges as a highly problematic typology for sustainable water management policymakers especially those in weaker institutional environments where there is a need to develop policy instruments that retain farmer water management decision making power and encourage networks the paper also extends the strategic response typology to enable understanding of how gender and location affect strategic responses to institutional pressures findings provide insight for policy design in times of increasing catastrophic flood and drought conditions exacerbated by poor water management practice

dynamics of the cobweb model with adaptive expectations and nonlinear supply and demand the price quantity dynamics of the cobweb model with adaptive expectations and nonlinear supply and demand curves is analysed we prove that chaotic dynamical behaviour can occur even if both the supply and demand curves are monotonic the introduction of adaptive expectations into the cobweb model leads to price quantity fluctuations with a smaller amplitude however at the same time the price quantity cycles may become unstable and chaotic oscillations may arise we present a geometric explanation why chaos can occur for a large class of nonlinear monotonic supply and demand curves

the spread of the multidivisional form among large firms 1919 1979 the multidivisional form is the favored form of organization for the large firms that dominate the american economy this study takes up the causes of the dissemination of that form among large firms from 1919 to 1979 five theories are initially proposed as possible explanations for the changes observed and these theories are operationalized and tested the model that seems most consistent with the data emphasizes the ability of key actors to alter structure under three circumstances when the firm has a product related or unrelated strategy which is consistent with chandler s 1962 theorizing when the corporate presidents have a background in sales or finance and when other firms in the industry alter their structures the implications of these results for theories of organizational change are discussed with special reference to the importance of conceiving how actors operate with varying rationalities in this process

mne institutional advantage how subunits shape transpose and evade host country institutions scholars increasingly emphasize the impact of institutions on multinational enterprises mnes but the opposite relationship has attracted less research that is mne agency in relation to institutions based on a comparative case study of six mnes from the united states and sweden this paper remedies this it explores and explicates mne subunits strategic responses to host country institutional constraints and opportunities in five different regions a new institutional approach is adopted which allows for an investigation of mne subunit agency in relation to normative and cognitive institutions as well as regulative ones this fine grained analysis reveals not only what kinds of responses mne subunits invoke but why and how they are able to respond we identify four strategic responses by which subunits shape transpose and evade institutions in the pursuit of competitive advantage innovation arbitrage circumvention and adaptation these responses are driven by three key enablers multinationality foreignness and institutional ambiguity that serve to enhance and heighten three mechanisms reflexivity role expectations and resources by linking the enablers and the mechanisms to specific types of strategic responses in a framework and typology the paper not only contributes to emerging research on the interplay between mnes institutions and strategy but to strategy practice

multi product inventory model for cold items with cost and emission consideration while sharing storage and transportation units is common for many product types cold items usually have different temperature requirements and as a result not all items can share a holding transportation unit consequently the type of products and their compatibility with other products needs to be considered in the inventory model in this paper we propose multi product inventory models for cold items the models determine the inventory levels that minimize either the cost or carbon equivalent emissions we model the compatibility of items as a constraint in the inventory model to solve the model we first find an appropriate family of products that can share a storage transportation unit then for each family of products we develop an approximate solution method to determine the order quantity of each product within a family numerical experiments demonstrate the solution procedure and provide managerial insights into cold item inventory policies

the impact of risk regulation on price dynamics most financial risk regulations assume that asset returns are exogenous where risk is estimated from historical data this assumption fails to take into account the feedback effect of trading decisions on prices we investigate the consequences of risk constrained trading by means of simulations of a general equilibrium model with a value at risk constraint and compare the results to the case when risk constraints are not present prices are lower on average in the presence of risk regulation while volatility is higher risk regulation may have the perverse effect of exacerbating price fluctuations

assessing systemic risk due to fire sales spillover through maximum entropy network reconstruction abstract monitoring and assessing systemic risk in financial markets is of great importance but it often requires data that are unavailable or available at a very low frequency for this reason systemic risk assessment with partial information is potentially very useful for regulators and other stakeholders in this paper we consider systemic risk due to fire sales spillovers and portfolio rebalancing by using the risk metrics defined by greenwood et al 2015 by using a method based on the constrained minimization of the cross entropy we show that it is possible to assess aggregated and single bank s systemicness and vulnerability using only the information on the size of each bank and the capitalization of each investment asset we also compare our approach with an alternative widespread application of the maximum entropy principle allowing to derive graph probability distributions and generating scenarios and we use it to propose a statistical test for a change in banks vulnerability to systemic events

young and no money never mind the material impact of social resources on new venture growth although growth is a desirable outcome for new ventures due to the many advantages of large size most new firms fail to grow largely because of their limited resources and adaptability this paper addresses the question of how new ventures grow despite their limited financial resources i explore the effect of two specific nonfinancial social resources legitimacy and status on new venture growth i propose that new firms can acquire legitimacy by mimicking the structures and ceremonial activities of established firms in their industry and can acquire status by affiliating with high status entities using a unique panel data set on a cohort of advertising agencies founded in new york and chicago between 1977 and 1985 i show that legitimacy and status have favorable impacts on new firms growth in revenues and number of employees the paper makes important contributions to social embeddedness and institutional research by examining the strategic implications of firm level social resources and to the literature on entrepreneurship in general and new venture growth in particular

once bitten not necessarily shy determinants of foreign market re entry commitment strategies we investigate foreign market re entry commitment strategies namely the changes in the modes of operation commitment undertaken by multinational enterprises mnes as they return to foreign markets from which they had previously exited we combine organisational learning theory with the institutional change literature to examine the antecedents of re entry commitment strategies from an analysis of 1020 re entry events between 1980 and 2016 we find that operation mode prior to exit is a strong predictor of subsequent re entry mode contrary to the predictions of learning theory we did not find support for the effect of experience accumulated during the initial market endeavour on the re entry commitment strategies of mnes in turn exit motives significantly impact on the re entrants decision to re enter via a different mode of operation by either increasing or decreasing their commitment to the market we show that re entrants do not replicate unsuccessful operation mode strategies if they had previously underperformed in the market when favourable host institutional changes occur during the time out period re entrants tend to increase commitment in the host market irrespective of the degree of prior experience accumulated in the market

leverage induced systemic risk under basle ii and other credit risk policies abstract we use a simple agent based model of value investors in financial markets to test three credit regulation policies the first is the unregulated case which only imposes limits on maximum leverage the second is basle ii and the third is a hypothetical alternative in which banks perfectly hedge all of their leverage induced risk with options when compared to the unregulated case both basle ii and the perfect hedge policy reduce the risk of default when leverage is low but increase it when leverage is high this is because both regulation policies increase the amount of synchronized buying and selling needed to achieve deleveraging which can destabilize the market none of these policies are optimal for everyone risk neutral investors prefer the unregulated case with low maximum leverage banks prefer the perfect hedge policy and fund managers prefer the unregulated case with high maximum leverage no one prefers basle ii

discrimination and the effects of drug testing on black employment abstract a common assumption is that the rise of drug testing among u s employers must have had negative consequences for black employment i use variation in the timing and nature of drug testing regulation to identify the impacts of testing on black hiring i find that adoption of protesting legislation increases black employment in the testing sector by 7 to 30 and relative wages by 1 4 to 13 0 with the largest shifts among low skilled black men the results are consistent with ex ante discrimination and suggest that drug testing may benefit african americans by enabling nonusing blacks to prove their status to employers

sustainable competitive advantage combining institutional and resource based views this article suggests that the context and process of resource selection have an important influence on firm heterogeneity and sustainable competitive advantage it is argued that a firm s sustainable advantage depends on its ability to manage the institutional context of its resource decisions a firm s institutional context includes its internal culture as well as broader influences from the state society and interfirm relations that define socially acceptable economic behavior a process model of firm heterogeneity is proposed that combines the insights of a resource based view with the institutional perspective from organization theory normative rationality institutional isolating mechanisms and institutional sources of firm homogeneity are proposed as determinants of rent potential that complement and extend resource based explanations of firm variation and sustainable competitive advantage the article suggests that both resource capital and institutional capital are indispensable to sustainable competitive advantage 1997 john wiley sons ltd

sustainable entrepreneurship is entrepreneurial will enough a north south comparison based on an analysis of 44 cases in canada tunisia and cameroon this research attempts to determine the fundaments of sustainable entrepreneurship se in an international perspective and to shed the light on the potential impact of economic institutional and cultural dimensions upon diverse levels of sustainability in small and medium size firms smes neo institutional and entrepreneurship theories were combined in an integrative conceptual model to fully embrace the meanings and practices of se and to question the culture free argument of some prescriptions as well as some international programs the analysis of the rationale behind entrepreneurs committed to sustainability in the three countries compared to less engaged firms shows that entrepreneurs individual values are crucial in all cases socio cultural specificities and institutional realities can however be more or less inductive to the adoption of sustainable practices in smes this study also demonstrates that external stimuli are needed in tunisia and cameroon to reach the same environmental involvement as found in canada moreover support programs to assist smes with the adoption of sustainable practices and communication about the issue have to be tailored to the entrepreneur s motives the firms levels of openness to sustainability the socio cultural practices already embedded and the countries priorities implications for policy management and research are also discussed

resource dependency and institutional theory perspectives on direct and indirect export choices this article develops and tests resource dependency and institutional theory arguments to explain two choices facing sme owner managers 1 the decision whether to export or not and 2 if the firm exports the choice between a direct to customers abroad and an indirect using another firm as intermediary export mode binomial logistic regressions on our sample of 871 dutch smes suggest that institutional theory perspectives owner managers perception of the increased international presence of their domestic competitors customers and suppliers and perceptions of increased use of foreign suppliers explain the decision to export while resource dependency theory arguments owner managers perception of the favorability of access to knowledge and technology of production costs and of access to capital in the home market guide the choice between direct and indirect export modes

institutional theory and mnc subsidiary hrm practices evidence from a three country study this study sets out to explore human resource management hrm practices in multinational corporation mnc subsidiaries within an institutional theory framework based on a sample of 158 subsidiaries of mncs operating in the united states russia and finland the paper examines factors hypothesised to influence the hrm practices adapted in us japanese and european mnc subsidiaries located in russia finland and the us the results indicate significant differences in hrm practices used across host countries both the status of the subsidiary human resource department and the degree to which the subsidiary was involved in knowledge transfer with other parts of the mnc had a significant impact on the selection of hrm practices

government interventions in sustainable supply chain governance experience in dutch front running cases numerous multi actor governance systems have recently emerged ensuring sustainability of international traded products business and civil society actors play a dominant role in initiating and governing sustainable supply chain governance systems sscg systems within specific product markets we see the emergence of various competing sscg systems this has led to debates on effectiveness transparency and legitimacy of these forms of self governance in the market these developments also call for a debate on appropriate roles for national governments most of the academic literature in this field focuses on methodologies for supply chain governance and their impacts but hardly addresses the roles taken on by governments and effectiveness of possible government interventions this article combines analysis of market dynamics in the timber and coffee product chains with policy analysis integrating approaches from the research fields of sustainable business and policy analysis the article shows how competition between various sustainable supply chain governance systems in the netherlands has resulted in recent market breakthroughs while initially government interventions were very limited and diverse the article suggests an approach for more systematic analysis of these dynamics and the roles of various actors by identifying both the public policy cycle and the private policy cycle

moving to job opportunities the effect of ban the box on the composition of cities jurisdictions across the united states have adopted ban the box btb policies preventing employers from conducting criminal background checks until late in the job application process their primary goal is to increase employment for those with criminal records if individuals with criminal records view these policies as improving their labor market opportunities they might move to btb adopting places in search of employment in this paper we consider btb s effects on the demographic composition of labor markets and the likelihood that residents report recently moving from other labor markets we find no evidence that btb affects migration

when micro prudence increases macro risk the destabilizing effects of financial innovation leverage and diversification by exploiting basic common practice accounting and risk management rules we propose a simple analytical dynamical model to investigate the effects of microprudential changes on macroprudential outcomes specifically we study the consequence of the introduction of a financial innovation that allows reducing the cost of portfolio diversification in a financial system populated by financial institutions having capital requirements in the form of value at risk var constraint and following standard mark to market and risk management rules we provide a full analytical quantification of the multivariate feedback effects between investment prices and bank behavior induced by portfolio rebalancing in presence of asset illiquidity and show how changes in the constraints of the bank portfolio optimization endogenously drive the dynamics of the balance sheet aggregate of financial institutions and thereby the availability of bank liquidity to the economic system and systemic risk the model shows that when fin

procyclical leverage and value at risk the availability of credit varies over the business cycle through shifts in the leverage of financial intermediaries empirically we find that intermediary leverage is negatively aligned with the banks value at risk var motivated by the evidence we explore a contracting model that captures the observed features under general conditions on the outcome distribution given by extreme value theory evt intermediaries maintain a constant probability of default to shifts in the outcome distribution implying substantial deleveraging during downturns for some parameter values we can solve the model explicitly thereby endogenizing the var threshold probability from the contracting problem

no news is bad news sensegiving activities media attention and venture capital funding of new technology organizations a significant body of research has examined how new organizations gain legitimacy and how gaining it affects their subsequent access to resources less attention has been given to the problem of how new organizations attract collective attention although related to legitimation the problem of attracting attention is distinct as attention and evaluation are distinct cognitive processes in this study we examine the allocation of collective attention to new organizations in a system of relationships within which new organizations seek to attract attention through their sensegiving activities the information properties of their sensegiving activities affect the level of attention they receive from different types of media and media attention in turn increases their perceived value potential in the eyes of venture capital investors vcs we examine these relationships in a sample of 398 information technology start ups that have obtained different levels of venture capital funding our results show that new organizations that engage in more intense and diverse sensegiving activities attract higher levels of industry media attention and that these effects are enhanced by the human capital of their founders and leaders diverse sensegiving activities are also associated with higher levels of attention from the general media but only the attention of specialized industry media is positively associated with the level of vc funding obtained these findings extend current research on information intermediation and institutional legitimation by demonstrating that media attention early in the life of new organizations affects how they are valued by a well informed expert audience such as vcs they also contribute to entrepreneurship research on the effects of new organizations strategies on their ability to secure resources and to research on vc funding decisions

mapping the institutional capital of high tech firms a fuzzy set analysis of capitalist variety and export performance we examine how institutional configurations not single institutions provide companies with institutional capital building on the varieties of capitalism approach it is argued that competitive advantage in high tech industries with radical innovation may be supported by combinations of certain institutional conditions lax employment protection weak collective bargaining coverage extensive university training little occupational training and a large stock market furthermore multinational enterprises engage in institutional arbitrage they allocate their activities so as to benefit from available institutional capital these hypotheses are tested on country level data for 19 oecd economies in the period 1990 to 2003 a fuzzy set qualitative comparative analysis yields several interesting findings a high share of university graduates and a large stock market are complementary institutions leading to strong export performance in high tech employment protection is neither conducive nor harmful to export performance in high tech a high volume of cross border mergers and acquisitions as a form of institutional arbitrage leading to knowledge flows acts as a functional equivalent to institutions that support knowledge production in the home economy implications of these findings for theory policy and the analysis of firm level behavior are developed

ecology driven real options an investment framework for incorporating uncertainties in the context of the natural environment the role of uncertainty within an organization s environment features prominently in the business ethics and management literature but how corporate investment decisions should proceed in the face of uncertainties relating to the natural environment is less discussed from the perspective of ecological economics the salience of ecology induced issues challenges management to address new types of uncertainties these pertain to constraints within the natural environment as well as to institutional action aimed at conserving the natural environment we derive six areas of ecology induced uncertainties and propose ecology driven real options as a conceptual approach for systematically incorporating these uncertainties into strategic management we combine our results in an integrative investment framework and illustrate its application with the case of carbon constraints

capabilities as a mediator linking resources and the international performance of entrepreneurial firms in an emerging economy this study investigates an under researched topic the relationships between capabilities resources and international performance among entrepreneurial firms in an emerging economy we combine the resource based view of the firm and the capability building perspective of rent creation to shed light on the crucial role of firm specific capabilities that transform key resources into performance outcomes employing a large sample of chinese entrepreneurial firms our investigation demonstrates that while the resources of institutional capital and managerial ties are important in the internationalization effort their effects on international performance are channeled through each firm s adaptive capability this adaptive capability is the firm s ability to coordinate recombine and allocate resources to meet the different requirements of foreign markets specifically our research is able to demonstrate support for the mediating role of capabilities in the relationship between resources and international performance the implications of these findings for theoretical development and future research are discussed

incorporating green purchasing into the frame of iso 14000 abstract more and more firms have begun to voluntarily adopt iso 14001 as a tool for continuous improvements to meet the goals of sustainability at the same time these firms have also encouraged their suppliers to apply for the certification of iso 14001 and to regulate the certification as a minimum requirement in selecting suppliers ind mark manage 4 1997 363 j qual manage 4 1999 111 renew energy 23 2001 579 by contrast green purchasing is increasingly being used as an effective tool to mitigate the environmental impacts of consumption and to promote the development of clean production technology am prospect 11 1992 71 it mainly focuses on product design and process improvement acad manage rev 20 1995 18 harv bus rev 75 1997 67 eventually bringing about a competitive advantage in international markets harv bus rev 75 1997 67 harv bus rev 73 1995 120 this paper highlights the role of iso 14000 and green purchasing in achieving sustainable development when firms focus their concerns on improving both financial and environmental performance and asserts the importance of the incorporation of green purchasing into the frame of iso 14000 we propose that 1 environmental purchasing is an effective tool in controlling pollution externalities and provides a positive effect on the implementation of iso 14001 environmental management and 2 with the incorporation of green purchasing into the framework of iso 14000 it can encourage firms to implement pollution prevention from the source and to educate the public to engage themselves in green consumption which leads to the attainments of both environmental and financial performance in this paper we also present a framework of guidelines for green purchasing and the related implementing procedures

comments on competitive responsiveness marketing science features many and diverse articles that analyze competitive responsiveness although recent marketing science editorials e g shugan 2002 suggest that competitive responsiveness is only a part of a comprehensive competitive marketing strategy it remains a vital part for that reason and many others marketing science is particularly proud of this special issue edited by david j reibstein and dick r wittink before introducing and vigorously applauding both the editors and authors of this excellent special issue we emphasize that competitive responsiveness raises numerous issues including whether one can forecast outcomes of new policies based on past observations made under old policies i e the lucas critique and decisions regarding which variables should be considered endogenous shugan 2004 i e determined within the model perhaps normative models are inherently perishable evolution in market structure requires modifications over time also although complete consistency within the world of the model is aesthetically pleasing imposing industry specific exogenous constraints that might appear unrelated to the modeling assumptions is sometimes necessary

pro market institutions and global strategy the pendulum of pro market reforms and reversals we review the literature analyzing the impact of pro market institutions on firms global strategy we propose that the ideological tension between whether the government or the market should drive economic development results in a pendulum of pro market reforms and reversals that drive changes in firm strategy and performance much progress has been made in the analyses of pro market reforms and their impact on firms international strategies and performance however there is a need to further learn about four areas 1 the concept of pro market institutions in particular the variety of institutional dimensions the measures and the influence of informal institutions on firm strategies 2 the drivers of changes in pro market institutions especially firms influences and the co evolution of firm strategies and institutional changes 3 the implications of changes in pro market reforms for the interactions among integration diversification and internationalization strategies the causality chains connecting institutions and strategies and the reconfiguration of activities globally and 4 the non traditional moderators that alter the impact of pro market institutional dynamics on firms strategies such as country level political systems industry level competitor reactions and individual level managerial capabilities and perceptions

an evolutionary approach to understanding international business activity the co evolution of mnes and the institutional environment this paper examines the co evolution of mne activities and institutions external and internal to the firm we develop a theoretical framework for this analysis that draws on the more recent writings of douglass north on institutions as a response to complex forms of uncertainty associated with the rise in global economic interconnectedness and of richard nelson on the co evolution of technology and institutions we link historical changes in the character of mne activities to changes in the institutional environment and highlight the scope for firm level creativity and institutional entrepreneurship that may lead to co evolution with the environment we argue that the main drivers for institutional entrepreneurship are now found in the increasing autonomy of mne subsidiaries thus mne agency derives from more decentralized forms of experimentation in international corporate networks which competence creating nodes of new initiatives can co evolve with local institutions unlike most other streams of related literature our approach connects patterns of institutional change in wider business systems with more micro processes of variety generation and experimentation within and across individual firms this form of co evolutionary analysis is increasingly important to understanding the interrelationships between mne activities and public policy

covariance versus component based estimations of performance in green supply chain management abstract in this paper we investigate the relationships between environmental management em and performance to verify whether the implementation of an effective internal environmental is a firm s precondition to belong to a green supply chain which type of environmental practices either internal or external contribute the most to increasing a firm s performances and whether performing the environment translates into higher economic performance we use structural equation modeling for testing our research hypotheses on a large sample of italian firms and estimate the structural paths between constructs by means of both covariance and component based approaches the use of both estimation methods allows us contributing to the recent debate about the specification of the performance construct as an emerging rather than as a latent variable and then using formative rather than reflective indicators formative indicators are used whenever a construct does not exist without its measures any change in one of the indicators causes a change in the construct and the measures are ingredients of the construct rather than being caused by it for instance economic performance is an emerging construct since economic measures e g profits and market share contribute to forming the construct rather than reflecting the behavior of the latent variable we show that the correct model specification changes the estimates of the path coefficients and leads to research findings aligned to the literature our results indicate that being green internally is a prerequisite for collaboration into a green supply chain internal em contributes to increasing performance more than external em while performing the environment does not lead to a higher economic performance

institutional activism in the early american automobile industry abstract a common proposition is that new industries gain constitutive legitimacy through claim making by institutional activists yet neoinstitutional research seldom analyzes the effects of claim making on the formation of new organizations and how the effect of claim making is moderated by other sources of constitutive legitimacy advertising legal recognition and a policy regime favorable to business i explore the relationship between claim making by activists and new organization building in a study of the early american automobile industry when auto clubs organized reliability contests to validate the automobile the results show that the visibility of reliability contests within the focal state increased foundings of car firms in the state but that this effect diminished with advertising legal recognition of the car and the existence of a business friendly governor in the focal state taken together these results demonstrate that claim making is crucial in the early phase of gaining legitimacy for new industries

expectations and bubbles in asset pricing experiments abstract we present results on expectation formation in a controlled experimental environment in each period subjects are asked to predict the next price of a risky asset the realized market price is derived from an unknown market equilibrium equation with feedback from individual forecasts in most experiments prices deviate from the benchmark fundamental and bubbles emerge endogenously these bubbles are inconsistent with rational expectations and seem to be driven by trend chasing behavior or positive feedback expectations of the participants we also analyze individual predictions of participants and find that participants within a group tend to coordinate on a common prediction strategy

density dependence in the evolution of populations of newspaper organizations a model of density dependence is proposed to explain regularities in the growth and decline of organizational populations density the number of organizations is assumed to be a function of the social processes of legitimation and competition at low density the model predicts that the legitimation process will dominate and will lead to high organizational founding rates and low organizational mortality rates at high levels of density competition will dominate and consequently founding rates will decline and mortality rates will rise the model is tested with hazard function models using data from nine newspaper populations spanning the 19th and 20th centuries and covering over 5200 newspapers analysis offounding rates provides strong empirical support for the model analysis of mortality rates reveals that the model holds for large populations

a robust rational route to randomness in a simple asset pricing model abstract we investigate asset pricing dynamics in an adaptive evolutionary asset pricing model with fundamentalists trend followers and a market maker agents can choose between a fundamentalist strategy at positive information cost or choose a trend following strategy for free price adjustment is proportional to the excess demand in the asset market agents asynchronously update their strategy according to realized net profits in the recent past as agents become more sensitive to differences in strategy performance the fundamental steady state becomes unstable and multiple steady states may arise as the traders sensitivity to differences in fitness increases a bifurcation route to chaos sets in due to homoclinic bifurcations of stable and unstable manifolds of the fundamental steady state

to be different or to be the same it s a question and theory of strategic balance this paper addresses the performance consequences of firm level strategic similarity past research observed that firms face pressures to be different and to be the same by differentiating firms reduce competition by conforming firms demonstrate their legitimacy both reduced competition and legitimacy improve performance this paper begins building a theory of strategic balance by synthesizing the differentiation and conformity perspectives the theory directs attention to intermediate levels of strategic similarity where firms balance the pressures of competition and legitimation empirical support for the theory is found in a longitudinal study of commercial banks several suggestions for developing a theory of strategic balance conclude the paper the theory s major implication is that firms should be as different as legitimately possible copyright 1999 john wiley sons ltd

who invests in renewable electricity production empirical evidence and suggestions for further research transforming energy systems to fulfill the needs of a low carbon economy requires large investments in renewable electricity production res e recent literature underlines the need to take a closer look at the composition of the res e investor group in order to understand the motives and investment processes of different types of investors however existing energy policies generally consider res e investments made on a regional or national level and target investors who evaluate their res e investments according to least cost high profit criteria we present empirical evidence to show that res e investments are made by a heterogeneous group of investors that a variety of investors exist and that their formation varies among the different types of renewable sources this has direct implications for our understanding of the investment process in res e and for the study of motives and driving forces of res e investors we introduce a multi dimensional framework for analyzing differences between categories of investors which not only considers to the standard economic dimension which is predominant in the contemporary energy literature but also considers the entrepreneurship innovation adoption and institutional dimensions the framework emphasizes the influence of four main investor related factors on the investment process which should be studied in future research motives background resources and personal characteristics

the future of stakeholder management theory a temporal perspective we propose adding a temporal dimension to stakeholder management theory and assess the implications thereof for firm level competitive advantage we argue that a firm s competitive advantage fundamentally depends on its capacity for stakeholder management related transformational adaptation over time our new temporal stakeholder management approach builds upon insights from both the resource based view rbv in strategic management and institutional theory stakeholder agendas and their relative salience to the firm evolve over time a phenomenon well understood in the literature and requiring what we call level 1 adaptation however the dominant direction of stakeholder pressures can also change namely from supporting resource heterogeneity at the firm level to fostering industry homogeneity and vice versa when dominant stakeholder pressures shift from supporting heterogeneity towards stimulating homogeneity in industry the firm must engage in level 2 or transformational adaptation stakeholders typically provide valuable resources to the firm in an early stage without these resources which foster heterogeneity in line with rbv thinking the firm would not exist at a later stage stakeholders also contribute to inter firm homogeneity via isomorphism pressures in line with institutional theory thinking adding a temporal dimension to stakeholder management theory has far reaching implications for this theory s practical relevance to senior level management in business

stability analysis of financial contagion due to overlapping portfolios abstract common asset holdings are widely believed to have been the primary vector of contagion in the recent financial crisis we develop a network approach to the amplification of financial contagion due to the combination of overlapping portfolios and leverage and we show how it can be understood in terms of a generalized branching process this can be used to compute the stability for any particular configuration of portfolios by studying a stylized model we estimate the circumstances under which systemic instabilities are likely to occur as a function of parameters such as leverage market crowding diversification and market impact although diversification may be good for individual institutions it can create dangerous systemic effects and as a result financial contagion gets worse with too much diversification there is a critical threshold for leverage below it financial networks are always stable and above it the unstable region grows as leverage increases note that our model assumes passive portfolio management during a crisis however we show that dynamic deleveraging during a crisis can amplify instabilities the financial system exhibits robust yet fragile behavior with regions of the parameter space where contagion is rare but catastrophic whenever it occurs our model and methods of analysis can be calibrated to real data and provide simple yet powerful tools for macroprudential stress testing

network location and learning the influence of network resources and firm capabilities on alliance formation this paper presents a dynamic firm level study of the role of network resources in determining alliance formation such resources inhere not so much within the firm but reside in the interfirm networks in which firms are placed data from extensive fieldwork show that by influencing the extent to which firms have access to information about potential partners such resources are an important catalyst for new alliances especially because alliances entail considerable hazards this study also assesses the importance of firms capabilities with alliance formation and material resources as determinants of their alliance decisions i test this dynamic framework and its hypotheses about the role of time varying network resources and firm capabilities with comprehensive longitudinal multi industry data on the formation of strategic alliances by a panel of firms between 1970 and 1989 the results confirm field observations that accumulated network resources arising from firm participation in the network of accumulated prior alliances are influential in firms decisions to enter into new alliances this study highlights the importance of network resources that firms derive from their embeddedness in networks for explaining their strategic behavior copyright 1999 john wiley sons ltd

the effect of national context on perceptions of risk a comparison of planned versus free market managers a model is developed to explain the effect of national context on risk related decisions an essential feature of risk related decisions is substantial uncertainty or inadequate information as well as significant consequences regarding future outcomes we argue that differences in information flows and consequences across national institutional environments affect the perceived uncertainty of decision situations for this reason the institutional environment in which managers reside should play a fundamental and systematic role in influencing their perceptions of risk we test our model on managers from two environments that contrast in terms of information and consequences related to risk a free market economy the u s and a centrally planned economy the czech republic in 1992 our results indicate that the institutional environment does indeed play a strong and systematic role in explaining managers risk related decisions thus national environment appears to be an important contextual condition to which the propensity to take risks is sensitive

weaving together the normative and regulative roles of government how the norwegian sovereign wealth fund s responsible conduct is shaping firms cross border investments based on institutional theory i extend research on the regulative role of national government in society and suggest that government exerts important influences on firms actions through the diffusion of norms i suggest that the norwegian government by instituting an ethical council that publicly censors and certifies the cross border investments of the norwegian sovereign wealth fund government pension fund global contributes to the professionalization of responsible investment principles and thus plays a normative role in shaping firms investments employing a quasi natural experiment i find that focal norwegian firms are more likely to make responsible cross border investments following the formation of the council on ethics in 2004 and its associated censorship announcements further i find that the normative pressure for responsible investments is mediated by firms imitation or overlap with the norwegian sovereign wealth fund s investments however the mediated effect of normative pressure on responsible investments becomes weaker for government owned firms these findings highlight the importance of normative mechanisms through which government can influence firms behavior especially in contexts where regulatory authority may not hold moreover these findings reveal the interplay among the normative mimetic and regulative pressures and the heterogeneity in the extent to which firms within the same country demonstrate institutional isomorphism

extending environmental management beyond the firm boundaries an empirical study of dutch food and beverage firms consumer demand for environmental sustainability and for affordable prices calls for cooperation and information exchange in food chains to reduce joint environmental impact known as externally oriented environmental management e em e em is increasingly regarded as a management tool to simultaneously improve environmental operational and business performance understanding the factors that influence managers to develop e em helps to design environmentally and economically sustainable food chains the prior research regarding these factors is not exhaustive and demanded a multi period approach this study expands the understanding of the factors that influence managers to develop e em with a multi period empirical research we address the effects of external institutional pressures regulative normative and culturally cognitive and the level of in company environmental management i em on e em which involves information exchange in the chain cooperation with suppliers and customers the analysis relies on survey data of 255 and 96 dutch food and beverage f b processors from 2002 and 2010 respectively the findings indicate that respondents have considerably improved i em over time i em requires in company pzrocedures ranging from environmental strategy formulation to the managerial review of achieved results to assure continuous improvement of environmental performance f b processors that had already achieved a high level of i em are more likely to develop e em also growing normative and culturally cognitive pressures from supply chain partners and increasingly from long term public private environmental covenants significantly influenced e em implementation however regulative pressure from public authorities had no impact it appeared that e em is influenced mostly by institutional pressures when the firms are less experienced with i em

causes of the difficulties in internationalization we study the causes of the difficulties faced by firms when they internationalize in search of new markets we build on the resource based theory to argue that the difficulties in internationalization can be separated into three main sets based on their relationship to advantage loss of advantage provided by resources transferred abroad creation of a disadvantage by resources transferred abroad and lack of complementary resources required to operate abroad in each set we further distinguish difficulties that are specific to a firm from those that are common to a set of firms we argue that only a few of the resulting types of difficulties of internationalization are exclusive to the cross border expansion and propose solutions that address the root cause of each type

industrial long term agreements on energy efficiency in the netherlands a critical assessment of the monitoring methodologies and quantitative results abstract long term agreements ltas with industry were added to the mix of energy policy instruments in the netherlands at the beginning of the 1990s within a few years these agreements have become very important for the industrial energy conservation policy in this study we assessed the extent to which the targets set out by the government were achieved to this end we studied 1 whether the original policy targets for industry were adequately translated to the contracted ltas 2 whether the ltas achieved the contracted goals and 3 whether the monitoring methodologies that were developed ensure a complete comparable and objective monitoring of the energy intensity developments in manufacturing industry the policy target for manufacturing industry was to decrease energy intensity by 19 in the period 1989 2000 excluding feedstocks it turned out to be possible to contract ltas that cover 72 75 of the energy consumption in manufacturing industry the average of the contracted lta targets amounts to an 18 intensity decrease the average goal achievement of the ltas in the period 1989 1997 turned out to be in accordance with the contracted targets although more than half of the lta sectors are lagging behind the agreed rate of intensity decrease for each of the ltas a monitoring methodology was developed some aspects of these monitoring methodologies have resulted in the fact that the lta monitoring does not ensure a comparable and objective monitoring of the energy intensity results in the ltas overall we conclude that the monitoring of the energy intensity developments in the long term agreements sectors is insufficiently transparent we recommend a stricter enforcement of uniform monitoring requirements in a new generation of ltas and independent supervision and verification of the monitoring results

combining voluntary agreements and taxes an evaluation of the danish agreement scheme on energy efficiency in industry abstract in this paper the danish agreement scheme on energy efficiency in industry is described and evaluated the basis for this evaluation is an implementation study of the agreement scheme and five evaluation criteria examining the practical considerations related to the choice of policy instruments a distinct feature of the danish scheme is that it is closely connected to a co2 tax on trade and industry this connection is important for the understanding and the functioning of the scheme the scheme has certain advantages the prevention of free riding is effective the scheme is flexible over time and the agreements do actually have an impact on firm behaviour but there are also drawbacks the administrative costs and search costs are high and the impact on innovation and networking among firms is low

interdependent behavior in foreign direct investment the multi level effects of prior entry and prior exit on foreign market entry this paper examines the interdependent foreign market entry decisions of multinational corporations mncs based on the argument that legitimacy and competition are two important forces in foreign market entry decisions we hypothesize that an mnc s market entry decisions are influenced by its own prior entry and prior exit decisions and those of other mncs we examine this general proposition at four levels of analysis the host country global industry an industry that spans host countries local industry an industry that is separately defined within each host country and parent firm level our analysis of a panel data of over 4000 market entry decisions that were made by japanese mncs shows that an mnc s market entry decision has a stronger inverted u shaped relationship with the prior entry and exit decisions of other mncs at the local industry level than the prior entry and exit decisions of other mncs at the host country and global industry levels we also find that both the prior entry and prior exit decisions of an mnc have a marginal influence on its own subsequent market entry decisions at the parent firm level

ban the box criminal records and racial discrimination a field experiment ban the box btb policies restrict employers from asking about applicants criminal histories on job applications and are often presented as a means of reducing unemployment among black men who disproportionately have criminal records however withholding information about criminal records could risk encouraging racial discrimination employers may make assumptions about criminality based on the applicant s race to investigate btb s effects we sent approximately 15 000 online job applications on behalf of fictitious young male applicants to employers in new jersey and new york city before and after the adoption of btb policies these applications varied whether the applicant had a distinctly black or distinctly white name and the felony conviction status of the applicant we confirm that criminal records are a major barrier to employment employers that asked about criminal records were 63 more likely to call applicants with no record however our results support the concern that btb policies encourage racial discrimination the black white gap in callbacks grew dramatically at companies that removed the box after the policy went into effect before btb white applicants to employers with the box received 7 more callbacks than similar black applicants but btb increased this gap to 43 we believe that the best interpretation of these results is that employers are relying on exaggerated impressions of real world racial differences in felony conviction rates

international joint venture partner selection the role of the host country legal environment this study attempts to enhance our understanding of how a host country s legal environment influences international joint venture ijv partner selection criteria empirical results based on survey data collected on 169 ijvs revealed that host country rule of law perceptions negatively influence appropriation and coordination cost concerns which positively influence partner related criteria furthermore these concerns mediate the relationship between perceptions of host country rule of law and partner related criteria

the evolution of intraindustry firm heterogeneity insights from a process study in this study we propose a process framework for understanding the evolution of intraindustry firm heterogeneity drawing on a longitudinal study of the development of the cellular telephone servi

coming forward the effects of social and regulatory forces on the voluntary restatement of earnings subsequent to wrongdoing we investigate the effects of social and regulatory forces on a firm s decision to disclose past wrongdoing by voluntarily restating its earnings with an eight year sample of more than 2 500 public firms including 170 voluntary restaters we find that firms are more likely to voluntarily restate their earnings in response to informal social pressures from other firms in their industry and less likely to do so in response to formal regulatory sanctions we also show that the impact of these forces varies with firm status we contribute to corporate governance and public policy research that examines the effectiveness of hard versus soft deterrence measures on firm compliance

human resource management in us subsidiaries in europe and australia centralisation or autonomy we explore determinants of subsidiary autonomy in setting human resource management hrm practices within us parented multinational enterprises mnes in europe and australia we examine both the effect of strategic context and the effect of the institutional location of the subsidiary we find that us mnes show greater centralisation of control over hrm where the subsidiary faces global markets in coordinated market economies vs liberal market economies and where union density is low

perspective explaining influence rents the case for an institutions based view of strategy research in strategy has identified and tried to explain four types of rents monopolistic rents efficiency rents quasi rents and schumpeterian rents building on previous work on political and institutional strategies we add a fifth type of rent influence rents influence rents are the extra profits earned by a firm because the rules of the game laws regulations and informal rules are designed or changed to suit it to aid the analysis of the relationship between institutional context and firm performance and to provide a structure to guide research we develop a framework with five key components a an identification of the five fundamental problems of a market economy b a typology that describes the five different types of institutions that emerge to solve these problems c the market ordering mechanisms used by institutions to solve these problems d the common causes of weak institutional performance and e generic strategies used by firms to exploit these weaknesses of an institutional context to enhance firm performance we highlight potential applications of the framework as well as an illustrative research agenda that can advance the development of theory to explain the emergence and persistence of influence rents

why firms engage in corruption a top management perspective this study builds upon the top management literature to predict and test antecedents to firms engagement in corruption building on a survey of 341 executives in india we find that if executives have social ties with government officials their firms are more likely to engage in corruption further these executives are likely to rationalize engaging in corruption as a necessity for being competitive the results collectively illustrate the role that executives social ties and perceptions have in shaping illegal actions of their respective firms

state governance and technological innovation in emerging economies state owned enterprise restructuration and institutional logic dissonance in china s high speed train sector can state governance spur firm innovation in an emerging economy and transform state owned enterprises soes from dying dinosaurs to dynamic dynamos we seek an answer to this question by investigating the innovative performance of restructured soes in china s high speed train sector we expect that soe restructuration will improve firm innovation but that the degree of improvement will depend on how the state conducts firm governance building on institutional theory we distinguish state governance via equity ownership and administrative affiliation in an emerging economy with market hierarchy institutional conflicts under such conflicts restructured soes experience institutional logic dissonance which hinders organizational change for technological innovation we hypothesize that state ownership exacerbates institutional logic dissonance at a restructured soe thus limiting innovation improvement from restructuration in contrast state affiliation mitigates firm dissonance and hence augments such improvement we find empirical evidence for these hypotheses in a comprehensive panel of high speed train manufacturers in china between 1989 and 2015 this study contributes to the institution based theory of technological innovation in emerging economies on the practical front our findings suggest that emerging states may adopt arms length governance to spur soe innovation and unleash these dynamic dynamos to fuel sustainable economic growth

individual expectations limited rationality and aggregate outcomes recent studies suggest that the type of strategic environment or expectation feedback can have a large impact on whether the market can learn the rational fundamental price we present an experiment where the fundamental price experiences large unexpected shocks markets with negative expectation feedback strategic substitutes quickly converge to the new fundamental while markets with positive expectation feedback strategic complements do not converge but show underreaction in the short run and overreaction in the long run a simple evolutionary selection model of individual learning explains these differences in aggregate outcomes

navigating identity duality in multinational subsidiaries a paradox lens on identity claims at hindustan unilever 1959 2015 multinational subsidiaries do not merely seek legitimacy within their dual institutional contexts they also strive to articulate an organizational identity by drawing on institutional resources embedded in these dual contexts we draw attention to the subsidiary s identity duality and conceptualize it as a paradox i e as the juxtaposition of the contradictory interdependent and persistent characteristics of the global and the local in the subsidiary s identity using 57 years of archival data from hindustan unilever the indian subsidiary of anglo dutch multinational unilever we observe changing patterns in the articulation of identity claims by subsidiary leaders and develop a process model of how subsidiaries navigate identity duality over time we find that subsidiary leaders may use two modes of organizational identity work for this purpose logic ordering the articulation of identity claims that respond to contradictory institutional demands by privileging one and subordinating the other and logic bridging the articulation of identity claims that respond to contradictory institutional demands by effecting a janusian integration of the said demands over time and employing these modes of identity work leaders at hindustan unilever sustained a dynamic balance between the dual cores of the subsidiary s espoused identity

sustained competitive advantage temporal dynamics and the incidence and persistence of superior economic performance competitive advantage is a key concept in strategic management research for a number of reasons not the least of which is that an avowed consequence of its attainment is held to be superior economic performance however few prior empirical studies have directly and systematically documented the incidence or prevalence of persistent superior economic performance the research reported here is based on empirical studies of a large number of industry samples for which longitudinal data were stratified by levels of performance using a new methodology and then analyzed in terms of their dynamics this new stratification technique was used in lieu of autoregressive methods employed in prior studies of performance persistence to allow for a true outlier analysis because persistent superior economic performance both has been argued theoretically and found empirically to be rare detailed results from a sample of 6 772 firms in 40 industries over 25 years are presented to illustrate the findings that 1 while some firms do exhibit superior economic performance 2 only a very small minority do so and 3 the phenomenon very rarely persists for long time frames these results while not providing direct support for a particular extant strategic management or economic theory concerning firm performance are most consonant with the resource based view of the firm and have implications for significant aspects of other received strategic management and economic theories

when panic makes you blind a chaotic route to systemic risk abstract we present an analytical model to study the role of expectation feedbacks and overlapping portfolios on systemic stability of financial systems building on corsi et al 2016 we model a set of financial institutions having value at risk capital requirements and investing in a portfolio of risky assets whose prices evolve stochastically in time and are endogenously driven by the trading decisions of financial institutions assuming that they use adaptive expectations of risk we show that the evolution of the system is described by a slow fast random dynamical system which can be studied analytically in some regimes the model shows how the risk expectations play a central role in determining the systemic stability of the financial system and how wrong risk expectations may create panic induced reduction or over optimistic expansion of balance sheets specifically when investors are myopic in estimating the risk the fixed point equilibrium of the system breaks into leverage cycles and financial variables display a bifurcation cascade eventually leading to chaos we discuss the role of financial policy and the effects of some market frictions as the cost of diversification and financial transaction taxes in determining the stability of the system in the presence of adaptive expectations of risk

learning forecasting and optimizing an experimental study rational expectations re models have two crucial dimensions i agents on average correctly forecast future prices given all available information and ii given expectations agents solve optimization problems and these solutions in turn determine actual price realizations experimental tests of such models typically focus on only one of these two dimensions in this paper we consider both forecasting and optimization decisions in an experimental cobweb economy we report results from four main experimental treatments 1 subjects form forecasts only 2 subjects determine quantity only solve an optimization problem 3 they do both and 4 they are paired in teams and one member is assigned the forecasting role while the other is assigned the optimization task all treatments converge to rational expectation equilibrium ree but at different speeds we observe that performance is the best in treatment 1 and the worst in treatment 3 we further find that most subjects use adaptive rules to forecast prices given a price forecast subjects are less likely to make conditionally optimal production decisions in treatment 3 where the forecast is made by themselves than in treatment 4 where the forecast is made by the other member of their team which suggests that two heads are better than one in term of the speed of finding the ree

faith and fair trade the moderating role of contextual religious salience normative and historical arguments support the idea that religion potentially shapes decisions to support fair trade products that said the question of how religion influences organizational decision makers to purchase fair trade products in a business to business context has remained largely unaddressed this research examines the interactive effect of individual religious commitment and contextual religious salience on an individual s willingness to pay a price premium for a fair trade product when buying on behalf of an organization findings from two experimental studies involving 75 and 87 working individuals respectively reveal that the effect of a decision maker s religious commitment on his or her willingness to pay a price premium for the purchase of a fair trade product on behalf of an organization is moderated by the contextual salience of religion specifically when religion is highly salient in the organizational context religious commitment is positively related to the decision maker s willingness to pay a premium for the fair trade product when contextual religious salience is low religious commitment and willingness to pay a premium are unrelated implications for theory and practice are presented

cobweb dynamics under bounded rationality this paper discusses recent work on expectation formation in the familiar cobweb hog cycle model a convenient feature of the model is the fact that it has a unique rational expectations equilibrium ree attention will be focused on whether this unique ree can be learned under bounded rationality with agents using simple habitual rule of thumb forecasting rules or whether other approximate rational expectations equilibria can arise where forecasts are although not perfect approximately correct in particular the possibility of chaotic equilibria under bounded rationality will be discussed both the homogeneous agent case and the heterogeneous case with evolutionary competition between different forecasting rules will be discussed recent experimental work on expectations formation in the cobweb economy suggests excess volatility and endogenous possibly chaotic price fluctuations driven by the interaction of competing boundedly rational agents