decision maker preferences for international legal cooperation why do some decision makers prefer big multilateral agreements while others prefer cooperation in small clubs does enforcement encourage or deter institutional cooperation we use experiments drawn from behavioral economics and cognitive psychology along with a substantive survey focused on international trade to illustrate how two behavioral traits patience and strategic reasoning of individuals who play key roles in negotiating and ratifying an international treaty shape their preferences for how treaties are designed and whether they are ratified patient subjects were more likely to prefer treaties with larger numbers of countries and larger long term benefits as were subjects with the skill to anticipate how others will respond over multiple iterations of strategic games the presence of an enforcement mechanism increased subjects willingness to ratify treaties however strategic reasoning had double the effect of adding enforcement to a trade agreement more strategic subjects were particularly likely to favor ratifying the agreement we report these results for a sample of 509 university students and also show how similar patterns are revealed in a unique sample of ninety two actual us policy elites under some conditions certain types of university student convenience samples can be useful for revealing elite dominated policy preferences different types of people in the same situation may prefer to approach decision making tasks and reason through trade offs in materially different ways

social security in panama a multiperiod analysis of income distribution abstract a unique multiperiod data set is used to look at the income distribution effects of the retirement portion of the social security system of panama while it is clear that the system is an important source of income for workers it is argued that its true redistributive importance is greatly exaggerated using a multiperiod view it is found that previously high wage and urban workers are disproportionately represented among current recipients it is also argued that social security has substantially reduced the work effort of these workers hence the appropriateness of the present social security system is questioned on both equity and efficiency grounds

cooperation in international environmental negotiations due to a preference for equity this paper demonstrates that cooperation in international environmental negotiations can be explained by preferences for equity within a n country prisoner s dilemma in which agents can either cooperate or defect in addition to the standard non cooperative equilibrium cooperation of a large fraction or even of all countries can establish a nash equilibrium in an emission game however where countries can choose their abatement level continuously equity preferences cannot improve upon the standard inefficient nash equilibrium finally in a two stage game on coalition formation the presence of equity interested countries increases the coalition size and leads to efficiency gains here even a stable agreement with full cooperation can be reached

responsible entrepreneurship in developing countries understanding the realities and complexities developing countries have recently experienced a burgeoning of small scale individual entrepreneurs sies who range from petty traders to personal service workers like small street vendors barbers and owners of small shops as a result of market based reforms rapid urbanisation unemployment landlessness and poverty while sies form a major part of the informal workforce in developing countries and contribute significantly to economic growth their potential is being undermined when they engage in irresponsible and deceptive business practices such as overpricing sale of underweight or substandard products or attempts to hoard goods to name a few despite the growing interest in corporate social responsibility csr initiatives of small businesses in developing countries the sies have received almost no attention to address this void in the literature we explore the reasons for the less than optimal level of social responsibility demonstrated by some sies in developing countries we do so by drawing upon the existing literature to develop a comprehensive framework of social responsibility of sies highlighting their unique characteristics and the different contextual factors that they encounter in developing countries based on this framework we then present a set of propositions specifying the influence of these contextual factors such as business environment cultural traditions socio economic conditions and both international and domestic pressures on the business practices of sies the framework offers an explanation for the lack of responsible entrepreneurship of sies and has important implications for promoting sustainable business practices in developing countries where businesses are striving hard to survive and compete

issue linkage and issue tie in in multilateral negotiations we describe a model of international multidimensional policy coordination where countries can enter into selective and separate agreements with different partners along different policy dimensions the model is used to examine the implications of negotiation tie in the requirement that agreements must span multiple dimensions of interaction for the viability of multilateral cooperation when countries are linked by international trade flows and transboundary pollution we show that while in some cases negotiation tie in has either no effect or can make multilateral cooperation more viable in others a formal tie in constraint can make an otherwise viable joint multilateral agreement unstable

fostering responsible communities a community social marketing approach to sustainable living just as socially irresponsible organizational behavior leaves a punitive legacy on society socially responsible organizations can foster curative change this article examines whether small organizations can foster societal change toward more sustainable modes of living we contend that consumption is deeply intertwined with social relations and norms thus making individual behavioral change toward sustainability a matter of facilitating change in individual behavior as well as in social norms and relations between organizations and consumers we argue that it is in this facilitation process that small firms can play a major role by adopting upstream and downstream approaches to diffuse behavioral change by synthesizing four key strands of literature small businesses and corporate social responsibility ethical consumption community social marketing and the diffusion of innovation and using the exemplar case of modbury the iconic plastic bag free town we demonstrate how responsible small firms can influence communities and the individuals therein to encourage environmentally sustainable practice to diffuse and support change in society

reciprocity matching and conditional cooperation in two public goods games experimental and empirical evidence identifies social preferences and proposes competing models of such preferences we find that participants match the contributions of others in the voluntary contribution mechanism vcm we also examine a game with different equilibria the weakest link mechanism wlm here in contrast participants match the minimum contribution of others

an international agreement with full participation to tackle the stock of greenhouse gases abstract greenhouse gas emissions build up an atmospheric stock which depreciates over time we identify weakly renegotiation proof equilibria with full participation in a game of international emission reduction treaties are easier to reach for long lived than for short lived gases

on the self interested use of equity in international climate negotiations abstract we discuss self interested uses of equity arguments in international climate negotiations using unique data from a world wide survey of agents involved in international climate policy we show that the perceived support of different equity rules by regions may be explained by the ranking of their economic costs despite being self interested equity arguments may be perceived as being used for different reasons for example out of fairness considerations or in order to facilitate negotiations consistent with experimental and behavioral studies on fairness perceptions we find that individuals are more likely to state reasons with positive attributes if they evaluate their own region or regions that support the individual s personally preferred equity rule negotiators perceive the use of equity by regions as less influenced by pressure from interest groups

complementarity and stability of equilibrium ture concerned with the stability of the competitive equilibrium is the proof by kenneth arrow and leonid hurwicz 1958 and arrow h d block and hurwicz that under a tatonnentent mechanism if all commodities are gross substitutes then the competitive equilibrium is globally stable no other theorem of comparable generality has been proved in the stability literature in this paper we examine the stability properties of competitive equilibrium positions at which one or more pairs of commodities are gross complements that is an increase in the price of good i other prices being held fixed leads to a decrease in excess demand for good j and conversely the main result of the paper may be formulated as follows

assessing social capital small and medium sized enterprises in germany and the u k social capital can be considered to be the product of co operationbetween various institutions networks and business partners it haspotential as a useful tool for business ethics in this article weidentify categories pertinent to the measurement of social capital insmall and medium sized enterprises smes by drawing on three differentsectors one business to business service one business to customerservice and one manufacturing we have enabled the consideration ofsectoral differences we find sector to play an important part inrelation to business practices and social capital our inclusion of smesfrom germany and the united kingdom has called attention to cultural institutional and economic aspects of two regions of europe and how theycan influence sme social capital social capital is found to beinfluenced by context and in particular institutional arrangements inanalysing the data we note particular areas of interest from the pointof view of smes and social capital as being formal engagement networking within sectors networking across sectors volunteerism andgiving to charity and finally a focus on why people engage we concludethat there is a considerable amount of further research needed on socialcapital sme s and business ethics

international environmental agreements on climate protection a binary choice model with heterogeneous agents abstract climate change poses a major challenge to present and future generations our analysis focuses on international environmental agreements ieas entered into by countries that decide rationally and autonomously on whether to adopt a climate friendly policy this raises the question how many and which countries will sign such an iea in addition to material incentives to combat climate change issues pertaining to justice and fairness motivate reciprocal behavior even during international negotiations integrating reciprocity preferences may stimulate cooperation and thus increase participation in an iea however there is some evidence that fairness also stabilizes small sized iea coalitions hence this gives rise to the following open question under which conditions does reciprocity have an enhanced and harmful impact on an iea furthermore we introduce heterogeneity with respect to a country s emphasis on reciprocity the costs it incurs when implementing a climate friendly policy its benefits from preventing negative consequences of climate change and country size in addition the present paper examines which countries might or might not sign an iea and identifies the characteristics that determine a country s participation or non participation in a coalition

theory of the firm past present and future an interpretation hence even if the partial equilibrium analyst knows full well that the actual situation is not really a competitive one he probably will still make a first try using the competitive model with good old fashioned profit maximization and if the results appear too odd appropriate qualifications may still be able to take care of them more simply than if he had started with a cumbersome managerial model in saying this i am showing my bias 18 p 30

tipping versus cooperating to supply a public good in some important multiplayer situations such as efforts to supply a global public good players can choose the game they want to play in this paper we conduct an experimental test of the decision by a group with fixed membership playing over a finite number of periods to choose between a tipping game in which every player wants to contribute to the public good provided enough other players contribute and a prisoners dilemma the classic cooperation game in the prisoners dilemma the first best outcome is attainable but cannot be sustained as a nash equilibrium in the tipping game only a second best outcome may be attainable but there exists a nash equilibrium that is strictly preferred to the one in the prisoners dilemma we show that many groups persistently choose the prisoners dilemma despite its strategic disadvantage and that the groups that eventually choose the tipping game do better than the ones that stick with the prisoners dilemma

social and symbolic capital and responsible entrepreneurship an empirical investigation of sme narratives this paper investigates links between social capital and symbolic capital and responsible entrepreneurship in the context of small and medium enterprises smes the source of the primary data was 144 business profiles written by the owner managers of small businesses in application for a small business awards competition in 2005 included in each of these narratives were claims relating to the firms contributions to wider society relationships with customers employees and stakeholders these narratives were coded and classified in a framework drawn from nahapiet and ghoshal s 1998 academy of management review 23 2 242 266 categorisation of social capital the analysis revealed a range of strategic orientations towards the development of social and symbolic capital along a conceptual continuum ranging from being responsible for oneself to being responsible for others overall the evidence demonstrates the significance of the power inherent in the social relations of smes as a force for ethical behaviour and suggests that normative theories of the development of social capital may provide competitive advantage through responsible behaviour for small business in the global economy

the relevance of stakeholder theory and social capital theory in the context of csr in smes an australian perspective the concept of business responsibility usually termed as corporate social responsibility csr originated in the early 1930s after the wall street crash of 1929 exposed corporate irresponsibility in large organisations the understanding of csr has evolved since then and its scope has now broadened from mere compliance to corporate laws to active alignment of internal business goals with externally set societal aspirations unfortunately the significance of this multidimensional concept within the small and medium enterprise sme sector has continued to be overshadowed by its application in large and multinational organisations more importantly this has led to the practice of judging smes which are experiencing increasing pressure to engage in social activities as if they are no different from their larger counterparts this study therefore investigates csr from the perspective of smes in australia without any theoretical presumptions and then comments on the relevance and applicability of the two theories that have been commonly used to investigate business responsibility namely stakeholder theory st and social capital theory sct the research findings indicate that csr within the sme sector is more aligned to the fundamentals of sct mainly owing to the unique resource and survival challenges that they face and which are arguably not so pronounced in large organisations

recent progress of cooperation on climate mitigation a bibliometric analysis abstract effective international cooperation is an important measure to mitigate climate change the purpose of this study is to clarify the research progress in the field of cooperation on emission reduction identify the influential authors and articles and reveal the main research topics based on the bibliometric method and the web of science database this study analyzes the literature in the field of cooperation on emission reduction the results show that the publications in this field have increased significantly over the past decade with the usa and china are the most influential countries keyword co occurrence and frequency analysis show that the most important research topics are as follows burden sharing and equity the stability of the climate coalition and international environmental agreements technology transfer and climate finance the linkage of carbon markets and the response to noncooperation behavior the main methods involved are game theory model integrated assessment models and computable general equilibrium model equitable distribution of mitigation responsibilities is the basis for cooperation on carbon reduction specific rulebooks for carbon market linkage is the key to its successful implementation this study helps researchers to clarify the current research status in the field of cooperation on emission reduction and provide valuable information for future research

revealed distributional preferences individuals vs teams we compare experimentally the revealed distributional preferences of individuals and teams in allocation tasks we find that teams are significantly more benevolent than individuals in the domain of disadvantageous inequality while the benevolence in the domain of advantageous inequality is similar across decision makers a consequence for the frequency of preference types is that while a substantial fraction of individuals is classified as inequality averse this type disappears completely in teams spiteful types are markedly more frequent among individuals than among teams on the other hand by far more teams than individuals are classified as efficiency lovers

the importance of local corporate taxes in business location decisions evidence from french micro data determinants of businesses locations are known to be multiple locations of partners and competitors are crucial as well as the territory s local characteristics to consider the importance of local taxes we build a poisson model to explain the number of business creations observed in a given municipality first results suggest that there are unobserved factors driving firm creation that are positively correlated with the level of local taxes to deal with this potential source of endogeneity we present an approach close to regression discontinuity design we find that everything else being equal higher local taxes actually tend to deter firms from setting up in a given zone but the effect is weak

the impact of equity preferences on the stability of international environmental agreements this paper uses a coalition formation model to explore how equity considerations affect countries cooperation on global environmental issues e g on climate change when developing countries are exempted from obligations to reduce their emissions i find that opening them for abatement projects financed by industrialized countries changes the incentives to cooperate in a way which can increase emissions and decrease welfare equity concerns in industrialized countries regarding the difference between their per capita emission levels and those of developing countries lead to increased abatement but do not qualitatively change the incentives to cooperate inequality aversion with respect to differences to abatement targets across industrialized countries generally induces larger coalition sizes and stricter abatement here the inclusion of developing countries improves upon the prospects of cooperation

do general and firm specific employer payroll taxes have the same incidence theory and evidence abstract this paper shows that there are theoretical reasons to distinguish between general payroll taxes and firm specific payroll taxes and that their incidence can be different data for collective agreements signed in quebec by large firms in the secondary sector for the 1975 1984 period are used to estimate their incidence

a climate agreement with full participation abstract using a repeated game model we demonstrate that by limiting the punishment for non compliance a climate agreement with full participation can be sustained as a weakly renegotiation proof equilibrium even without watering down abatement levels

theory of the firm in relation to exchange rates import substitution and export neoclassical theory deals with the profit maximizing beheviour of the firm in a closed economy once an open economy condition is introduced the impact of the exchange rate on the cost and price parameters of the firm and consequently its import substitution and export decisions becomes relevant a model is presented with case studies in which given the exchange rate the firm seeks to determine the optimal level of import substitution output and export with the objective of maximizing its profit in today s competitive world when countries are liberalizing and moving towards an open trade regime the influence of exchange rates on the decision making processes of firms is bound to be significant an approach which provides them with a methodology for spelling out their options and making optimal choices is therefore of considerable practical interest

x efficiency and technical efficiency efficiency measurement has become a very popular field in applied economics in recent years and with this interest there has been a large intellectual investment in refining the empirical methods available to researchers in the area in this paper we relate these developments to harvey leibenstein s original 1966 insight into the psychological ideas underlying the notion that economic agents may not achieve maximal efficiency in their productive decisions and behaviour of course it is always possible to argue that apparent inefficiency only arises from a failure of the observer to realise what it is that is being maximized however we evade this easy escape route into non falsifiable hypothesizing and instead take at face value the fact that too many empirical studies have come up with substantial measures of inefficiency for us to ignore its importance for normative economics

unique non boundary equilibria in the morishima system abstract in the extensive literature on the morishima system the issue of the uniqueness and positiveness of equilibria has been neglected it is shown that three conditions known to be sufficient for local stability also imply unique non boundary equilibria other implications of these three conditions such as numeraire independence and global stability are also discussed

some substitution effects in the location decision of a firm this article extends the classical static theory of the firm to allow for the interaction of the location and output and input decisions equilibrium conditions are determined the comparative static effects of changes in the price and transport cost parameters on the location and quantity variables are deduced

small firms social capital and the enhancement of business performance through innovation programmes the paper explores the extent to which social capital is advantageous to small and medium enterprise sme growth social capital is a communal property involving civic engagement associational membership high trust reliability and reciprocity in social networks it is capable of being identified in social political and economic contexts often associated with strong communities however not all strong communities exert the effects of social capital in respect of business activities this paper assesses government programmes to promote collaboration amongst smes for improving innovation capacity by increasing social capital through networking it shows that for a sizeable proportion of programme funded firms in denmark ireland and wales u k social capital building was associated with enhanced business knowledge and innovation performance of particular importance was the opportunity afforded to firms for linkage with external innovation networks and the build up of embeddedness or the institutional basis for the enhancement of social capital as a consequence of discovering the advantages of social capital over a third of respondents planned to continue to develop it in future in many cases funding such activities privately rather than calling on the public purse

a branch of economics is missing micro micro theory jn the life history of most sciences there are movements toward the study of larger aggregates or toward the detailed study of smaller and more fundamental units my impression is that in most fields the movement toward the study of more micro units has predominated yet in economics in the 1930 s the movement was in the macro direction both physics and biology in the last three decades have made great strides by studying smaller and smaller entitiesphysics by studying more minute fundamental particles and biology by studying the fundamental elements determining genetics in a general sense economics has not been moving in this direction although some work of this nature exists the purpose of this paper is to review some samples of the work that exists and to argue that this area must become a major field of economic research and study the question of how individuals in multiperson firms influence firm decisions seems like such a natural question to ask that it is amazing that it is not part of the formal agenda of economists as a profession of course it has been asked but not by present day economists in their professional capacity in other words micromicroeconomics has never become an established field for the most part theorists have not only not raised this question but they have continued to develop micro theory in such a way as to discourage economists from raising this question part of the reason for this lies in the maximizing and optimizing biases of conventional micro theory and part can be ascribed to the consequences of the long period required to refine the theory so that elements that did not fit the basic model were discarded

reciprocal climate negotiators abstract do reciprocal preferences matter for participation in international environmental agreements combining the two canonical models of barrett 2003 and rabin 1993 i find that 1 the empty coalition is always stable 2 the grand coalition is stable if reciprocity preferences are sufficiently strong 3 if a minority of countries are not reciprocal a majority coalition can still be stable if reciprocity is sufficiently strong and widespread and 4 there is also a stable minority coalition if costs are moderate and the number of countries is not too small the latter coalition is weakly larger than the maximum stable coalition with standard preferences but barely improves on welfare and is characterized by negative sentiments the analysis illustrates that although models of reciprocity tend to be complex the context of a specific applied game may reduce this complexity

x efficiency rent seeking and social costs this paper investigates shifts in cost functions of monopoly and regulated firms operating under conditions of x inefficiency and rent seeking behavior we show that x inefficiency and rent seeking have significantly different implications for economic welfare distinctions are drawn between pecuniary and real x inefficiency and between sunk and continuing rent seeking costs in general for a given cost shift rent seeking behavior implies larger social costs than does x inefficiency theory however cost shifts caused by either x inefficiency or rent seeking are observationally equivalent this implies empirically measured cost shifts cannot unambiguously be attributed to either cause

reconsidering the relevance of social license pressure and government regulation for environmental performance of european smes whereas social license pressure is held as a strong motive for the corporate social performance csp of large enterprises it is argued in literature that it will not sufficiently motivate small and medium sized enterprises smes in this view government regulation is the most effective way to improve the environmental performance of smes other studies argue that social license pressure is also important for smes because of the strong embeddedness of smes in their local communities a large scale empirical study into the effects of social license pressures and government regulation on the environmental performance of smes that could help solve this debate is however still lacking this paper contributes to the scientific literature by using structural equation modeling on a sample of 4929 smes from twelve european countries to test both views for micro small and medium sized enterprises another contribution to scientific literature is that our model includes direct as well as indirect effects from social license pressures on environmental performance the indirect effects are mediated by perceived market benefits of csr the estimation results show that social license pressures as perceived by smes significantly affect the environmental performance of micro small and medium sized enterprises directly as well as indirectly through mediation by perceived market benefits of csp in all cases the perceived social license pressure provides a stronger stimulus to improving environmental performance than the motive to comply with government regulation the policy implication is that governments should not rely on direct regulation of environmental performance only but also aim to improve the transparency of environmental performance by soft regulations that induce smes to publish key performance indicators on environmental issues

positive framing does not solve the tragedy of the commons we investigate whether positive framing increases cooperation in three social dilemmas with slightly different properties a linear public goods pg game a non linear pg game and a common pool resource cpr game results from our laboratory experiments show that contributions to a linear pg are higher if the externality is framed positively rather than negatively corroborating earlier findings by andreoni 1995 by contrast we find no such framing effects in the non linear pg game or the cpr game in these games the best response in the material payoffs is to contribute less if others contribute more counteracting effects of pro social preferences positive framing therefore does not help to solve the tragedy of the commons

the design of stable international environmental agreements economic theory and political economy international environmental agreements typically strive for the solution of a common property resource dilemma since the sovereignty of states precludes external enforcement international environmental agreements must be self enforcing game theoretical models explain why rewards and punishments imposed through the environmental externality generally fail to enforce full cooperation therefore environmental treaties incorporate provisions that enhance the incentives for participation such as transfers sanctions and linkage to other negotiation topics in international politics moreover interaction with markets and governments as well as the rules and procedures adopted in the negotiation process influence the design and the effectiveness of an international environmental agreement