endogenous entry and self selection in private value auctions an experimental study this paper presents the results of an experimental study of endogenous entry in first price independent private value auctions n potential bidders simultaneously decide whether to participate in an auction or receive a known outside option in the second stage entrants submit bids after learning their own private values and the number of entrants an equilibrium model of heterogeneous risk averse bidders implies a self selection effect where bidding in the auction is lower with endogenous entry because only less risk averse bidders enter this effect is confirmed by the experiment we also observe excessive entry relative to the theoretical model

financial contracting theory meets the real world an empirical analysis of venture capital contracts we compare the characteristics of real world financial contracts to their counterparts in financial contracting theory we do so by studying the actual contracts between venture capitalists vcs and entrepreneurs the distinguishing characteristic of vc financings is that they allow vcs to separately allocate cash flow rights board rights voting rights liquidation rights and other control rights we describe and measure these rights we then interpret our results in relation to existing financial contracting theories we also describe the interrelation and the evolution across financing rounds of the different rights query 1 query 2

socially responsible investing an investor perspective given the growing importance of socially responsible investing sri it is surprising that there is no consensus of what the term sri means to an investor further most studies of this question rely solely on the views of investors who already invest in sri funds our study surveys a unique pool of approximately 5 000 investors that contains both investors who have used sri criteria in investment decisions and those who have not and involves a broad array of criteria associated with sr investing our findings offer new insight into the sri debate for both sets of investors environmental and sustainability issues dominate as the major category associated with sr investing we find strong agreement in the ranking of the relative importance of various sri factors despite differences between these two groups in their opinion of their overall importance we also find that investors prefer to consider the sri question in more holistic terms rather than using the exclusionary format favored by most sri funds investors seem to prefer to reward firms who display overall positive social behavior rather than to exclude firms on the basis of certain products or practices these findings can help providers of sr investment vehicles to improve the sri products that they offer to the general investor thus both encouraging the initial adoption of sr criteria by investors and increasing overall investment in sr choices

equilibrium in auctions with entry the authors model entry incentives in auctions with risk neutral bidders and characterize a symmetric equilibrium in which the number of entrants is stochastic the presence of too many potential bidders raises coordination costs that detract from welfare the authors show that the seller and society can benefit from policies that reduce market thickness i e the relative abundance of buyers their analysis extends well known revenue equivalence and ranking theorems but also demonstrates that variations in the auction environment affect optimal policies e g reservation prices in ways not anticipated by models that ignore entry copyright 1994 by american economic association

managing complexity and unforeseeable uncertainty in startup companies an empirical study novel startup companies often face not only risk but also unforeseeable uncertainty the inability to recognize and articulate all relevant variables affecting performance the literature recognizes that established risk planning methods are very powerful when the nature of risks is well understood but that they are insufficient for managing unforeseeable uncertainty for this case two fundamental approaches have been identified trial and error learning or actively searching for information and repeatedly changing the goals and course of action as new information emerges and selectionism or pursuing several approaches in parallel to see ex post what works best based on a sample of 58 startups in shanghai we test predictions from prior literature on the circumstances under which selectionism or trial and error learning leads to higher performance we find that the best approach depends on a combination of uncertainty and complexity of the startup risk planning is sufficient when both are low trial and error learning promises the highest potential when unforeseeable uncertainty is high and selectionism is preferred when both unforeseeable uncertainty and complexity are high provided that the choice of the best trial can be delayed until its true market performance can be assessed

designing order book transparency in electronic communication networks a significant fraction of trade in stock exchanges e g euronext and nasdaq involves iceberg orders which are orders to sell or buy a certain number of shares with the caveat that only a part of that number be made public this paper provides a normative justification for the lack of transparency in this kind of order imperfect disclosure is shown to be a necessary feature of any optimal mechanism when the asset s potential buyers must incur a cost in order to become active and learn their valuations for the asset this finding raises a caveat for regulation that seeks to mandate the open order book or otherwise increase the pre trade transparency of stock exchanges

technology as a complex adaptive system evidence from patent data this paper develops a theory of invention by drawing on complex adaptive systems theory we see invention as a process of recombinant search over technology landscapes this framing suggests that inventors might face a complexity catastrophe when they attempt to combine highly interdependent technologies our empirical analysis of patent citation rates supports this expectation our results also suggest however that the process of invention differs in important ways from biological evolution we discuss the implications of these findings for research on technological evolution industrial change and technology strategy 2001 elsevier science b v all rights reserved

auctions with a stochastic number of bidders abstract auction theory is generalized by allowing the number of bidders to be stochastic in a first price sealed bid auction with bidders having constant absolute risk aversion the expected selling price is higher when the bidders do not know how many other bidders there are than when they do know this thus the seller should conceal the number of bidders if he can moreover a bidder s ex ante expected utility is the same whether or not there is a policy of concealing the number of bidders concealment therefore pareto dominates announcement with risk neutral bidders the optimal auction is the same whether or not the bidders know who their competitors are

optimal auctions with information acquisition this paper studies optimal auction design in a private value setting with endogenous information acquisition first we develop a general framework for modeling information acquisition when a seller wants to sell an object to one of several potential buyers who can each gather information about their valuations prior to participation we then show that under certain conditions standard auctions with a reserve price remain optimal but the optimal reserve price lies between the mean valuation and the standard reserve price in myerson 1981 we provide sucient conditions under which the value of information to the seller is positive and also characterize the necessary and sucient conditions under which equilibrium information acquisition in private value auctions is socially excessive the key to the analysis is the insight that buyer incentives to acquire information become stronger as the reserve price moves toward the mean valuation

optimal auctions revisited in symmetric privately known values oral auctions with costly entry for bidders the seller can do no better than by committing ex ante to a reservation price and entry fees or subsidies which result in no fewer and at most one more bidders than a reservation price equal to the seller s value would in the absence of entry fees or subsidies journal of economic literature classification numbers d44 c72

ranking equilibrium competition in auctions with participation costs this paper studies the degrees of equilibrium competition in three common forms of auctions with costly participation and shows that when bidders valuation distribution is concave there is a simple condition to rank the equilibrium competition of those auctions it also investigates how the results are related to stochastic ordering of bidders valuation distributions and provides some illustrative examples

multidimensional incentive compatibility and mechanism design abstract incentive compatibility conditions are characterized in general for problems in which several goods are to be allocated and agents types are multidimensional two questions of monopoly pricing under multidimensional uncertainty are then analyzed first we find the optimal nonlinear pricing scheme when the monopolist knows only the distribution of an arbitrarily parameterized family of demand curves and second we solve for the optimal bundling policy for a multiproduct monopolist

equilibrium bid functions for auctions with an uncertain number of bidders abstract the number of rivals may be unknown when a bidding strategy is formulated in an auction in a symmetric model with risk neutral bidders holding independent information we obtain explicit equilibrium bidding functions for first price and second price auctions with uncertainty about the number of rivals five auctions are revenue equivalent first price and second price auctions each with the number of bidders known or uncertain and english auctions

how should responsible investors behave keynes s distinction between entrepreneurship and speculation revisited this paper deals with keynes s distinction between entrepreneurship and speculation regarding business people in general and especially investors behaviour based on keynes s thoughts about financial markets it analyses how different motivations influence the decision making process of investors and its consequences for stock markets and the real economy and clarifies that keynes s considerations are still useful for understanding contemporary developments and risks in the financial system furthermore it points out that keynes s theories and policy recommendations should be understood in the context of his moral considerations especially relating to individual responsibility of investors finally keynes s moral thoughts can be taken as a foundation for a contemporary approach to investors responsibility

who lets ethics guide his economic decision making an empirical analysis of individual investments in ethical funds this paper shows that one out of eight investors chooses ethical funds and foregoes return for ethical principles however few screen completely human capital being female and empathetic professions all predict ethical decision making interestingly neither income nor wealth explains screening

second opinions and price competition inefficiency in the market for expert advice we consider a market in which an expert must exert costly but unobservable effort to identify the service that meets the consumer s need in our model experts offer competing contracts and the consumer may gather multiple opinions we explore the incentives that a competitive sampling of prices and opinions provides for experts to exert effort and find that there is a tension between price competition and the equilibrium effort in particular the equilibrium fails to realize the second best welfare optimum an intervention that limits price competition via price control increases welfare

optimal search auctions with correlated bidder types abstract we study optimal auctions when contacting prospective bidders is costly and the bidders values are correlated although full surplus extraction is in general impossible we can construct a search mechanism that fully extracts the surplus with an arbitrarily high probability

why do sellers usually prefer auctions we compare the most common methods for selling a company or other asset when participation is costly a simple simultaneous auction and a sequential process in which potential buyers decide in turn whether to enter the bidding the sequential process is always more efficient but preemptive bids transfer surplus from the seller to buyers because the auction is more conducive to entry precisely because of its inefficiency it usually generates higher expected revenue we also discuss the effects of lock ups matching rights break up fees as in takeover battles entry subsidies etc

alternative common value auction procedures revenue comparisons with free entry the logic of revenue comparisons for different types of common value auctions is substantially altered if the number of participants rather than being fixed responds endogenously to the expected profitability from participating in a thoroughly symmetric model a seller may prefer that competition be indirect an auction procedure in which fewer participants are needed to drive the expected profitability from participating down to the level obtainable in other auctions in the economy can attain higher expected revenue if a sale is sufficiently likely this insight allows a complete revenue ranking of standard auction procedures with endogenous entry

resource allocation decisions under imperfect evaluation and organizational dynamics research and development r d projects face significant organizational challenges especially when the different units who run these projects compete among each other for resources in such cases information sharing among the different units is critical but it cannot be taken for granted instead individual units need to be incentivized to not only exert effort in evaluating their projects but also to truthfully reveal their findings the former requires an emphasis on individual performance whereas the latter relies on the existence of a common goal across the organization motivated by this commonly observed tension we address the following question how should a firm balance individual and shared incentives so that vital information is both acquired and equally importantly disseminated to the entire organization our model captures two key characteristics of r d experimentation information is imperfect and it is also costly our analysis yields several important implications for the design of such incentive schemes and the management of r d portfolios this paper was accepted by david hsu entrepreneurship and innovation

free entry and social inefficiency our goal is to provide a simple yet general exposition of the conditions under which the number of entrants in a free entry equilibrium is excessive insufficient or optimal our analysis compares the number of firms that enter a market when there is free entry with the number that would be desired by a social planner who is unable to control the behavior of firms once they are in the market that is we consider the second best problem of choosing the welfare maximizing number of firms while we take as given their noncompetitive behavior after entry we demonstrate that the crucial conditions for establishing the presence of an entry bias can be stated quite simply in terms of the outcome of the postentry game played by entrants in contrast to previous work we do not need to model this postentry game explicitly

managing product families the case of the sony walkman abstract success in fast cycle industries e g consumer electronics can depend both on rapid model replacement and on model longevity although sony was as fast as any of its chief competitors in getting new models to market an important explanation for the wide variety of models offered by the firm is the greater longevity of its key models this finding adds an important insight to the conventional literature on time based competition which emphasizes rapid innovation exclusively sony s special understanding of the us market enabled it to respond more effectively to life style differences by locating industrial designers in its key markets sony s strong design capability and effective division of labor engineers lead generational and incremental projects industrial designers and market personnel lead topological projects allow for parallel model development investment in manufacturing flexibility amortized over multiple models within the product family make the rapid model changeover possible

on optimal reservation prices in auctions the theory of auction design examines how various factors affect the outcome of an auction most of the existing literature focuses on how varying the amount of information available to each bidder affects the bid taker s expected revenue when all other factors remain constant this paper studies how the bid taker s expected revenue varies with changes in the auction format when such changes affect the number of bidders and in turn the bidders maximum value for the object being sold specifically we examine how varying the reservation price or screening level affects the bid taker s expected revenue though its effect on the number of bidders for two simple examples the losses associated with a reduced number of bidders outweighs any benefits that nontrivial reservation prices might have had in models with an exogonously set number of bidders

upping the ante how to design efficient auctions with entry of primary importance in auction design is the set of strategies available to the seller at the auction stage we first formalize hold up regarding entry costs that preys on second price auctions when the seller may engage in a costly shill bidding activity we derive the optimal reserve and show how shill bidding can make posted prices outperforming auctions second we advocate for a new regulation where shills would be banned but with the possibility of canceling sales ex post which offers some valuable flexibility the english auction with jump bids implements then the first best in general environments

optimal repeated purchases when sellers are learning about costs abstract a buyer repeatedly purchases some good suppliers privately learn their cost only upon producing at least once efficiency would imply sampling sellers until one is found with cost lower than a increasing with time reservation value then the good would be permanently purchased from the seller with lowest cost a sequence of second price auctions with participation premia and entry fees is shown to be both efficient and optimal for the buyer an alternative calls for price offers by informed sellers with compensations that increase in the offer in both cases the buyer subsidizes competition through participation premia or compensations journal of economic literature classification numbers d44 d83 l14

rational expectations information acquisition and competitive bidding most rational expectations market equilibrium models are not models of price formation and naive mechanisms leading to such equilibria can be severely manipulable in this paper a bidding model is developed which has the market like features that bidders act as price takers and that prices convey information higher equilibrium prices convey more favorable information about the quality of the objects being sold than do lower prices bidders can benefit from trading only if they have a transactions motive or if they have access to inside information apart from exceptional cases prices are not fully revealing a two stage model is developed in which bidders may acquire information at a cost before bidding and for which the equilibrium price is fully revealing resolving a well known paradox

incentives and problem uncertainty in innovation contests an empirical analysis contests are a historically important and increasingly popular mechanism for encouraging innovation a central concern in designing innovation contests is how many competitors to admit using a unique data set of 9 661 software contests we provide evidence of two coexisting and opposing forces that operate when the number of competitors increases greater rivalry reduces the incentives of all competitors in a contest to exert effort and make investments at the same time adding competitors increases the likelihood that at least one competitor will find an extreme value solution we show that the effort reducing effect of greater rivalry dominates for less uncertain problems whereas the effect on the extreme value prevails for more uncertain problems adding competitors thus systematically increases overall contest performance for high uncertainty problems we also find that higher uncertainty reduces the negative effect of added competitors on incentives thus uncertainty and the nature of the problem should be explicitly considered in the design of innovation tournaments we explore the implications of our findings for the theory and practice of innovation contests this paper was accepted by christian terwiesch operations management

editor s choice active ownership we analyze an extensive proprietary database of corporate social responsibility engagements with u s public companies from 1999 2009 engagements address environmental social and governance concerns successful unsuccessful engagements are followed by positive zero abnormal returns companies with inferior governance and socially conscious institutional investors are more likely to be engaged success in engagements is more probable if the engaged firm has reputational concerns and higher capacity to implement changes collaboration among activists is instrumental in increasing the success rate of environmental social engagements after successful engagements particularly on environmental social issues companies experience improved accounting performance and governance and increased institutional ownership

a critical review of sustainable business indices and their impact most studies into the performance of socially responsible investment vehicles have focused on the performance of sustainable or socially responsible mutual funds this research has been complemented recently by a number of studies that have examined the performance of sustainable investment indices in both cases the majority of studies have concluded that the returns of socially responsible investment vehicles have either underperformed or failed to outperform comparable market indices although the impact of sustainable indices to date has been limited the recent launch of sustainable indices by dow jones and ftse suggests that more attention is being paid to the subject by financial markets investors and companies this development raises a number of important issues which are reviewed in this article a the performance of indices compared with their benchmark indices b the methodologies employed in compiling the indices and c the impact of the indices on companies and the investment community the article concludes with a number of suggestions for areas that merit future research

benchmarking and transparency incentives for the pharmaceutical industry s corporate social responsibility with over 2 billion people lacking medicines for treatable diseases and 14 million people dying annually from infectious disease there is undeniable need for increased access to medicines there has been an increasing trend to benchmark the pharmaceutical industry on their corporate social responsibility csr performance in access to medicines benchmarking creates a competitive inter business environment and acts as incentive for improving csr this article investigates the corporate feedback discourses pharmaceutical companies make in response to criticisms from benchmarking reports it determines whether these responses are part of a healthy process in increasing access to medicines or a barrier to improvement a qualitative analysis on the feedback the industry provided was performed and the responses seen in these statements were grouped by analysing the language used the ideas portrayed and atti tudes of the companies increasing transparency through benchmarking is a powerful tool which reveals the industry s shortfalls to the public affects the decisions of socially responsible investors and is a risk to their financial bottom line this article demonstrates the importance of benchmarking and transparency in creating inter business competition and the translation of these responses to actual access to medicine practices

optimal search auctions abstract we study the design of profit maximizing single unit auctions under the assumption that the seller needs to incur costs to contact prospective bidders and inform them about the auction with independent bidders types and possibly interdependent valuations the seller s problem can be reduced to a search problem in which the surplus is measured in terms of virtual utilities minus search costs compared to the socially efficient mechanism the optimal mechanism features fewer participants longer search conditional on the same set of participants and inefficient sequence of entry

why wine is not glue the unresolved problem of negative screening in socially responsible investing the purpose of socially responsible investing sri is to 1 allow investors to reflect their personal values and ethics in their choices and 2 encourage companies to improve their ethical social and environmental performance in order to achieve these ends the means sri fund managers employ include the use of negative screening or the exclusion of companies involved in sinful industries we argue that there are problems with this methodology both at a theoretical and at a practical level as a consequence current sri offerings cannot accurately reflect the values and ethical beliefs they propose to represent moreover the use of a priori criteria is potentially misleading as we show by discussing examples of glue and wine making applying this flawed approach sri funds fail to influence the direction of the firms they deem most in need of re directing rather than engaging in the simple a priori assumption that some industries are saints while others are sinners freeman 2007 we suggest a new framework upon which the sri screening methodology could be grounded embracing the philosophical tradition of american pragmatism we suggest that sri methodology could be improved by engaging in an analysis based on 1 the actual impacts of the company s products and services 2 the company s relationships with its specific real stakeholders and 3 the contingent environment social economic political legal and cultural in which the business operates

participation costs and efficient auctions abstract suppose that risk neutral agents have independently and perhaps asymmetrically distributed private valuations for an indivisible object a mechanism assigns the object but it is costly to send messages to the coordinator in these circumstances the second price auction has an equilibrium that is classicallyex anteefficient given general opportunities to invest in information about or enhancements of own valuations in contrast the first price sealed bid auction may have no efficient equilibrium even if buyers are symmetric other properties of the first price auction are proved a semirevelation principle is established for mechanisms with participation costs journal of economic literatureclassification numbers d44 d82

strategic ignorance in a second price auction abstract suppose that bidders may publicly choose not to learn their values prior to a second price auction with costly bidding all equilibria with truthful bidding exhibit bidder ignorance when the number of bidders is sufficiently small ignorance considerations also affect the optimal reserve price

on absolute auctions and secret reserve prices from a theory viewpoint the use of auctions with zero public reserve prices also called absolute auctions or of auctions with secret reserve prices is somewhat puzzling despite being common by allowing that buyers differ in their processing of past data regarding how the participation rate varies with the auction format and how reserve prices are distributed when secret we show in a competitive environment that these auction formats may endogenously emerge we also analyze how buyers with various sophistications and sellers with various costs sort into the different formats thereby offering a range of testable predictions alternative approaches are reviewed

auctions with heterogeneous entry costs it is well known that if bidders have independent private values and homogeneous entry costs a rst or second price auction with a reserve price equal to the seller s value maximizes social surplus and seller revenue and leaves bidders with no surplus further in mixed strategy entry equilibria social surplus and seller revenue decrease with the number of bidders we show that when entry costs are heterogeneous and private information the revenue maximizing reserve price is above the seller s value a positive inspection fee and a reserve price equal to the seller s value generates even more revenue and in either case bidders capture informational rents further seller revenue and social surplus may either increase or decrease with the number of bidders nevertheless seller revenue is asymptotically the same whether entry costs are homogeneous or heterogeneous our results are framed in terms of screening values rather than reserve prices and apply to any standard auction

investing in socially responsible companies is a must for public pension funds because there is no better alternative with assets of over us 1 0 trillion and growing public pension funds in the united states have become a major force in the private sector through their holding of equity positions in large publicly traded corporations more recently these funds have been expanding their investment strategy by considering a corporation s long term risks on issues such as environmental protection sustainability and good corporate citizenship and how these factors impact a company s long term performance conventional wisdom argues that the fiduciary responsibility of the pension funds trustees must be solely focused on their beneficiaries and therefore their investment criteria must be based strictly on narrowly defined financial measures it is also asserted that well established financial measurements of corporate performance already include long term risk assessment through discounted present value of future flow of earnings consequently all other criteria are contrary to the best interest of the pension funds beneficiaries in this paper we assert that contrary to conventional wisdom pension funds and for that matter other mutual funds must be concerned with the long term survival and growth of corporations these measures are generally referred to socially responsible investing sri and when applied to corporations it is termed socially responsible corporate conduct srcc we demonstrate that current measurement of future risk assessment invariably understates and quite often completely overlooks these long term risks because of the inherent bias towards short run on the part of financial intermediaries whose compensation depends greatly on short term results furthermore there is ample evidence to suggest that these intermediaries have been engaging in self serving practices and thus failing in their duties to serve their clients i e pension funds best interests because of their large holdings in the total market as well as individual companies these funds cannot easily divest from poorly performing companies without destabilizing the companies stock and overall markets hence they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long term aspects of their operations in terms of their impact on environment sustainability and community welfare to name a few we argue that an exclusionary and even a primary focus on short term financial criteria is no longer a viable option it also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance thus socially responsible investing practices are not merely discretionary and desirable activities they are a necessary imperative which both the corporations and public pension funds and other large institutional holders will ignore at serious peril to themselves finally the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities it also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long term corporate survival and growth in the context of a changing economic environmental and socio political dynamic

it s a matter of principle the role of personal values in investment decisions we investigate the role of personal values in an investment decision in a controlled experimental setting participants were asked to choose an investment in a bond issued by a tobacco company or a bond issued by a non tobacco company that offered an equal or sometimes lower yield we then surveyed the participants regarding their feelings toward tobacco use to determine whether these values influenced their investment decision using factor analysis we identified investment and tobacco related dimensions on which participants responses tended to load two of these factors relating to the societal impact of investment decisions and the health effects of tobacco were highly significant in determining whether participants selected a tobacco or non tobacco related investment more importantly we found that when the rate of return on a tobacco related investment exceeds the rate of return on an investment not involving tobacco by 1 the intensity of participant concerns about the societal effects of their investment decisions was especially important in determining investment choices this finding indicates that traditional wealth maximization approaches which do not consider the personal values of the investor omit an important factor that affects investment decisions

participation in auctions participation preparing offers in auction and procurement games e g bidding for spectrum rights or for control of corporations is very costly which calls for analyzing participation no less than how to play the games as part of equilibrium the result is a model with bi dimensional distribution of types as in jackson m o 1999 nonexistence of equilibria in auctions with both private and common values mimeo http www stanford edu jacksonm nonexist pdf and endogenous distribution of participants players with low production but high participation costs may decide not to participate forcing the auctioneer to pay higher than necessary prices to mitigate this phenomenon auctioneers may consider partially reimbursing participants for the costs they incur in preparing offers restricting attention to symmetric games we prove that the game we consider has a unique symmetric equilibrium with and without the reimbursement mechanism

elevating the role of divestment in socially responsible investing the divest movement has focused attention on strategic and ethical differences in the practice of socially responsible investing sri and highlighted an unnecessary bifurcation of best of class engagement and divestment although best of class engagement is favored as a contemporary and pragmatic approach this paper calls for a more pronounced recognition of absolute dealbreakers and divestment as an underpinning for best of class engagement after linking divestment and best of class engagement to their foundations of absolutism and relativism respectively i critique best of class engagement and argue that without a distinct and explicit role for divestment best of class strategies are ethically and strategically fraught following a discussion of which types of issues suggest divestment or best of class engagement i identify the norway government pension fund as a noteworthy example and posit that divestment and engagement are best presented and employed in tandem particularly for issues that have yet to be addressed by law and convention

socially responsible investing in the united states socially responsible investing sri has emerged in recent years as a dynamic and quickly growing segment of the u s financial services industry involving over 2 trillion in professionally managed assets its conceptual origins can be found in the early history of civilization with it s modern roots in the 1960s this paper provides an overview of the breadth and depth of the concept and practice of socially and environmentally responsible investing describes the investment strategies that together define sri as currently practiced in the u s offers several observations about some of the factors fueling its dramatic growth and presents data showing that investors who choose to invest in a socially and environmentally responsible manner can do so without giving up investment returns sri has matured to a point where virtually any investment need can be met through portfolio design that integrates an investor s personal values institutional mission and or social priorities the socially responsible investment industry in the unitedstates is a young phenomenon even referring to it as an industry ten years ago may have been a bit of a stretch while it has grown dramatically in recent years it is an area of work of study and of practical application that continues to evolve in many significant ways one intriguing example of the ongoing development of the field can be found in the analysis of the language used to describe it the terms social investing socially responsible investing ethical investing socially aware investing socially conscious investing green investing values based investing and mission based or mission related investing all refer to the same general process and are often used interchangeably

socially responsible investment in the spanish financial market this paper reviews the development of socially responsible investment sri in the spanish financial market the year 1997 saw the appearance in spain of the first sri mutual fund but it was not until late 1999 that major spanish fund managers offered sri mutual funds on the retail market the development of sri in the spanish financial market has not experienced the high levels of development seen in other european countries such as france or italy where interest in sri began during the same period this paper presents an analysis of the impact of sri mutual funds managed by spanish fund managers comparing the evolution of managed assets and number of investors we also analyse the investment strategies adopted by these funds which mainly use negative screening criteria and the participation of non governmental organisations as institutional investors an analysis of the take up of socially responsible investment in the spanish financial market shows majors deficits in this process this is due to spanish investors having limited sensitivity to social issues and knowledge of sri and a lack of development of sri investment strategies such as engagement or shareholder activism by fund managers furthermore the take up of sri mutual funds in the spanish financial market coincided with a fall in the stock market at the beginning of the 21st century we conclude with an analysis of the relationship between sri and corporate social responsibility csr

behavioral models for first price sealed bid auctions with the one shot decision theory abstract we build an auction model with the one shot decision theory which describes the process of a bidder deciding his her bidding price in first price sealed bid auctions the decision making procedure involves two steps first for each of his her possible bidding prices the bidder examines every possible highest bidding price provided by the other bidders and chooses one as a focus point of this bidding price of him her then the bidder determines such a bidding price as the optimal one that generates the best outcome when its focus point occurs the optimal bidding price can be obtained and two common phenomena in auction markets throwing away and overbidding are well explained

being virtuous and prosperous sri s conflicting goals can sri be a means to make investors both virtuous and prosperous this paper argues that there can be significant tensions between these goals and that sri and indeed all investment should not allow the pursuit of maximizing investment returns to prevail over an ethical agenda of promoting social and economic justice and environmental protection the discourse on sri has changed dramatically in recent years to the point where its capacity to promote social emancipation sustainable development and other ethical goals is in jeopardy historically sri was a boutique sector of the market dominated by religious based investors who sought to invest in accordance with the tenets of their faith from the early 1970s the aspirations of the sri movement morphed significantly in the context of the divestment campaign against south africa s apartheid regime no longer were social investors satisfied with just avoiding profit from immoral activities instead they also sought to change the behavior of others business case sri is a problematic sri benchmark for several reasons often there is a countervailing business case for financing irresponsible activities given the failure of markets to capture all social and environmental externalities secondly even if investors care about such concerns there may be no means of financially quantifying their significance for investment purposes and thirdly even if such factors can be financially quantified they may be deemed to be such long term financial costs or benefits that they become discounted and ignored the ethics case for sri and ethical business practices more generally takes the view that both investors and the companies they fund have ethical responsibilities that trump the pursuit of profit maximization ethical investment should be grounded on this foundation however it may not be enough to keep ethical investment ethical will likely require institutionalizing new norms and governance standards in such domains as reforming fiduciary duties and the internal governance of financial organizations sri s own codes of conduct including the unpri have yet to demonstrate the robustness to move the financial community beyond business as usual