Financing Liabilities Under Superfund

One of the more critical environmental risk areas involves the financing of cleanup costs associated with past improper disposal of hazardous wastes. These costs will run into the tens of billions of dollars. The federal Superfund program and related state programs are the driving forces for cleaning up hazardous waste. Under Superfund, the government collects taxes and coordinates cleanup strategies, and searches for potentially responsible parties (generators, disposers, transporters) to assist in financing the cleanup. To lessen the financial impact, responsible parties are looking to their liability insurers to provide coverage under old general liability insurance policies. Insurance companies contend that Superfund liabilities are not covered under liability policies. The paper examines the various financing methods and liabilities produced by Superfund. Particular emphasis is placed on developments in the courts which are resulting in a significant shift in the financial responsibilities to the insurance industry. Broad estimates of the financial impact of Superfund liabilities are developed. Finally, several public policy issues, which are raised by the topics exmained in this paper, are discussed.     

Surrogate Boycotts against Multinational Corporations: Consumers’ Choice of Boycott Targets

Within the context of surrogate boycotts for multinational corporations (MNCs), the author develops a conceptual framework which examines how the interaction between expectations of boycott objectives’ attainment, the ascribed egregiousness of the principal offender and a MNC's actions, activism, concern for the boycott issue and personal sacrifices affect consumers’ likelihood to boycott a targeted MNC. The focus is on surrogate boycotts where the targeted MNCs have some involvement with the underlying issues. One of the key objectives is to determine disparities in the boycotting of different MNCs which are targets of the same surrogate boycott. Results from two real boycotts and four real boycott targets indicate that the ascribed egregiousness of the MNC's actions is the strongest determinant of boycott participation, followed by expectation related to the attainability of the boycott objectives. Those MNCs with lower product substitutability and higher consumer preferences will suffer less than other boycott targets. Despite the alleviating influences of low substitutability and consumer preferences on boycotts, MNCs need to proactively develop decision‐making frameworks for early recognition of ethically dubious issues.     

Why are right-wing voters attracted to dominant leaders? Assessing competing theories of psychological mechanisms

Research shows that conservative and right-wing individuals are more likely than liberal and left-wing individuals to prefer dominant leaders. According to adaptive followership theory, this reflects psychological mechanisms that tag dominant individuals as more competent under situations of conflict. Conservatives tend to view the world as dangerous and ridden with intergroup conflict and, hence, have heightened preferences for dominant leaders (the competence explanation). Yet, an alternative mechanism is possible, where people stereotypically associate dominant-looking leaders with conservativism such that conservatives perceive these leaders as more similar to themselves (the similarity explanation). Hence, the effects of dominance might not be a matter of perceived competence but of perceived policy agreement. This article pits these explanations about the underlying psychological mechanisms against each other. Using nationally representative survey experiments, we find support for the competence explanation by demonstrating that right-wing individuals prefer dominant candidates even if they are clearly politically closer to non-dominant candidates. This preference for dominant candidates only fades when the dominant candidates are from entirely different political parties than the right-wing individuals themselves.     

On E‐Auctions for Procurement Operations

Electronic auctions have revolutionized procurement in the last decade. In many situations, they have replaced negotiations for supplier selection and price setting. While they have often greatly reduced transaction costs and increased competition, they have also encountered problems and resistance from suppliers resenting their intrusion on cooperative supplier/buyer relationships. In response to these issues, procurement auctions have evolved in radical new directions. Buyers use business rules to limit adverse changes. Some procurement auctions allow bidders to offer variants in the specifications of products to be supplied. Most important, some suppliers are allowing bidders to bid on packages of items, not just individual items. This tends to change procurement auctions from zero‐sum fights over supplier profit margins to win‐win searches for synergies. These changes have opened up many new research areas. Researchers are trying to improve how to deal with the computational issues involved in package auctions and to analyze the new auctions forms that are evolving. In general, equilibrium incentives are not known, and dealing with ties in package auctions is an issue. Computer scientists are analyzing the use of computerized bidding agents. Mechanisms that combine auctions with fixed buy prices or with negotiations need to be analyzed.     

Computer incompetents in the cross-hairs.

Human Resources managers are distressingly aware that more than half the middle and senior managers (40- and 50-year-olds) in their organizations are technologically incompetent. Having spent millions on technology, most corporate CEOs, many of whom can't use a computer either, are drawing a bead on middle managers who are passively resisting the computer revolution. Physician executives are no exception. Given the current shortage of physician managers with good track records and people skills, can middle managers skirt technology issues until retirement if they dance slowly enough? It's doubtful. Organizations are using new tactics to bar technically challenged managers from their ranks: They will only interview candidates with mastery of specific software and they're posting job opportunities on their web sites. Those who still believe they can ride out the computer revolution may want to rethink that strategy.     

Closed‐Loop Supply Chains: A Critical Review,and Future Research*

In this article, I present a review and tutorial of the literature on closed‐loop supply chains, which are supply chains where, in addition to typical forward flows, there are reverse flows of used products (postconsumer use) back to manufacturers. Examples include supply chains with consumer returns, leasing options, and end‐of‐use returns with remanufacturing. I classify the literature in terms of strategic, tactical, and operational issues, but I focus on strategic issues (such as when should an original equipment manufacturer (OEM) remanufacture, response to take‐back legislation, and network design, among others) and tactical issues (used product acquisition and disposition decisions). The article is written in the form of a tutorial, where for each topic I present a base model with underlying assumptions and results, comment on extensions, and conclude with my view on needed research areas.     

Some properties of pareto-optimal choices in decision problems

Estimates are derived for the expected number of Pareto-optimal choices when n candidates are compared with respect to q qualities. The number of comparisons needed to find the Pareto-optimal choices, and the possible advantages of suboptimization procedures, are briefly discussed.     

The evolution of industrial environmental performance metrics: Trends and challenges

Environmental performance metrics are measuring sticks against which companies can gauge their progress toward environmental goals and related business strategies. Good metrics represent information that has been purposefully distilled into manageable bits that help focus attention on key issues. For example, a particular compliance goal may require tracking the mass or concentration of regulated substances that are released to the environment. Progress toward meeting an internal goal of reducing materials or eliminating targeted substances from the waste stream may be tracked by measuring the mass of material inputs and outputs. These metrics, when compared to an appropriate benchmark, such as a regulatory standard or an industry average, give a company some means of assessing its performance. A comprehensive set of metrics can assist management to direct corporate resources toward the most processing problems and identify the most cost efficient manner of addressing them. They can also be used by companies to communicate the details of their environmental performance to customers, investors and other external audiences.     

Social Activism in and Around Organizations

Organizations are frequent targets for social activists aiming to influence society by first altering organizational policies and practices. Reflecting a steady rise in research on this topic, we review recent literature and advance an insider-outsider framework to help explicate the diverse mechanisms and pathways involved. Our framework distinguishes between different types of activists based on their relationship with targeted organizations. For example, “insider” activists who are employees of the target organization have certain advantages and disadvantages when compared with “outsider” activists who are members of independent social movement organizations. We also distinguish between the direct and indirect (or spillover) effects of social activism. Much research has focused on the direct effects of activism on targeted organizations, but often the effects on non-targeted organizations matter more for activists goals of achieving widespread change. Drawing on this framework, we identify and discuss eight specific areas that are in need of further scholarly attention.     

Looking Too Old? How an Older Age Appearance Reduces Chances of Being Hired

Building on theories of impression formation based on faces, this research investigates the impact of job candidates’ facial age appearance on hiring as well as the underlying mechanism. In an experiment, participants decided whether to hire a fictitious candidate aged 50 years, 30 years or without age information. The candidate's age was signalled either via chronological information (varied by date of birth) or via facial age appearance (varied by a photograph on the résumé). Findings showed that candidates with older‐appearing faces – but not chronologically older candidates – triggered impressions of low health and fitness, compared to younger‐appearing candidates. These impressions reduced perceptions of person–job fit, which lowered hiring probabilities for older‐appearing candidates. These findings provide the first evidence that trait impressions from faces are a determinant of age discrimination in personnel selection. They call for an extension of current models of age discrimination by integrating the effects of face‐based trait impressions, particularly with respect to health and fitness.     

Changes in Management Ownership and the Valuation Effects of Equity Offerings

Seasoned equity issues trigger share price declines, and this is usually interpreted as evidence of signalling. We find that seasoned equity issues also typically result in much lower managerial ownership in U.S. firms. Jensen and Meckling (1976) predict a stock price decline when managerial ownership falls. We conduct several tests to distinguish agency explanations form signalling explanations, and conclude that both effects are present.     

Combinatorial Voting

We study elections that simultaneously decide multiple issues, where voters have independent private values over bundles of issues. The innovation is in considering nonseparable preferences, where issues may be complements or substitutes. Voters face a political exposure problem: the optimal vote for a particular issue will depend on the resolution of the other issues. Moreover, the probabilities that the other issues will pass should be conditioned on being pivotal. We prove that equilibrium exists when distributions over values have full support or when issues are complements. We then study large elections with two issues. There exists a nonempty open set of distributions where the probability of either issue passing fails to converge to either 1 or 0 for all limit equilibria. Thus, the outcomes of large elections are not generically predictable with independent private values, despite the fact that there is no aggregate uncertainty regarding fundamentals. While the Condorcet winner is not necessarily the outcome of a multi‐issue election, we provide sufficient conditions that guarantee the implementation of the Condorcet winner.     

12 Structural Equation Modeling in Management Research: A Guide for Improved Analysis

Abstract

A large segment of management research in recent years has used structural equation modeling (SEM) as an analytical approach that simultaneously combines factor analysis and linear regression models for theory testing. With this approach, latent variables (factors) represent the concepts of a theory, and data from measures (indicators) are used as input for statistical analyses that provide evidence about the relationships among latent variables. This chapter first provides a brief introduction to SEM and its concepts and terminology. We then discuss four issues related to the measurement component of such models, including how indicators are developed, types of relationships between indicators and latent variables, approaches for multidimensional constructs, and analyses needed when data from multiple time points or multiple groups are examined. In our second major section, we focus on six issues related to the structural component of structural equation models, including how to examine mediation and moderation, dealing with longitudinal and multilevel data, issues related to the use of control variables, and judging the adequacy of models and latent variable relationships. We conclude with a set of recommendations for how future applications of SEM in management research can be improved.     

Manuals for Environmental Dialogue

One of the essential factors in enhancing the motivation of companies for increasing environmental efforts is to improve their ability to conduct a positive dialogue on environmental issues with clients and other stakeholders. Efficient communication is a precondition if attention to environmental issues is to contribute to maintaining or increasing market share.But until now many companies have been focusing on putting their own house in order, and expecting that the marketing impact would more or less come of its own. Today, many Danish companies admit that a serious and targeted effort is needed in order to turn a high environmental profile into marketing advantage.The opportunity for companies gaining competitive advantage from environmental management systems and other pollution prevention activities increasingly depends on the ability to communicate attitudes and performance to the stakeholders. The responsibility for environmental communication is often assigned to the person responsible for environmental issues. They will have both the technical insight and the environmental knowledge, but will often need communication skills and, most important, tools to carry out the communication task.Requirements for communication skills on environmental issues have grown, especially because the market's and the public's interest in environmental issues concerning production and product impacts increases day-by-day.In Denmark, authorities are focusing on the fact that information on both production and products plays a key role. This focus is reflected in the Act on Green Accounts, the introduction of eco-labelling, as well as the initiatives taken by the Danish EPA under the enhanced Integrated Product Policy. These developments have caused companies in different sectors to look for tools for environmental communication.This article focuses on tools for improving environmental communications on environmental issues in general, and with different groups of stakeholders.     

Model Uncertainty and Risk Estimation for Experimental Studies of Quantal Responses

Experimental animal studies often serve as the basis for predicting risk of adverse responses in humans exposed to occupational hazards. A statistical model is applied to exposure-response data and this fitted model may be used to obtain estimates of the exposure associated with a specified level of adverse response. Unfortunately, a number of different statistical models are candidates for fitting the data and may result in wide ranging estimates of risk. Bayesian model averaging (BMA) offers a strategy for addressing uncertainty in the selection of statistical models when generating risk estimates. This strategy is illustrated with two examples: applying the multistage model to cancer responses and a second example where different quantal models are fit to kidney lesion data. BMA provides excess risk estimates or benchmark dose estimates that reflects model uncertainty.     

Physician career management: organizational strategies for the 21st century.

Burnout is a state of physical, emotional, and mental exhaustion caused by long-term involvement in situations that are emotionally demanding. It is not stress, per se, that causes burnout, as many thrive in stressful, demanding careers. Rather, burnout results when stress continuously outweighs the sense of effectiveness, accomplishment, and reward. And, this fate is sealed when one feels helpless to effect significant change in the conditions that fuel the stress. Establishing an organizational environment that reduces the risk of physician burnout requires a new commitment of resources, one that can be challenging to justify to decision-makers with a strictly short-term, bottom line orientation. The key issues to consider in shaping a physician career management program include: (1) entry of new physician employees into the organization; (2) productivity measures; (3) responsiveness to safety concerns; (4) administrative and policy issues; and (5) variety and growth opportunities.     

One Person,Many Votes: Divided Majority and Information Aggregation

This paper shows that information imperfections and common values can solve coordination problems in multicandidate elections. We analyze an election in which (i) the majority is divided between two alternatives and (ii) the minority backs a third alternative, which the majority views as strictly inferior. Standard analyses assume voters have a fixed preference ordering over candidates. Coordination problems cannot be overcome in such a case, and it is possible that inferior candidates win. In our setup the majority is also divided as a result of information imperfections. The majority thus faces two problems: aggregating information and coordinating to defeat the minority candidate. We show that when the common value component is strong enough, approval voting produces full information and coordination equivalence: the equilibrium is unique and solves both problems. Thus, the need for information aggregation helps resolve the majority's coordination problem under approval voting. This is not the case under standard electoral systems.     

POLITICAL REPUTATIONS AND CAMPAIGN PROMISES

We analyze conditions under which candidates' reputations may affect voters' beliefs over what policy will be implemented by the winning candidate of an election. We develop a model of repeated elections with complete information in which candidates are purely ideological. We analyze an equilibrium in which voters' strategies involve a credible threat to punish candidates who renege on their campaign promises and in which all campaign promises are believed by voters and honored by candidates. We characterize the maximal credible campaign promises and find that the degree to which promises are credible in equilibrium is an increasing function of the value of a candidate's reputation. (JEL: D8)     

Newsvendor Pricing Problem in a Two‐Sided Market

We study the pricing problem of a “platform” intermediary to jointly determine the selling price of the platforms (hardware) sold to consumers and the royalty charged to content developers for content (software), when the demands for content and for platforms are interdependent. Our model elucidates the impact of supply chain replenishment costs and demand uncertainty on the strategic issues of platform pricing in a two‐sided market.     

The price of atomic selfish ring routing

We study selfish routing in ring networks with respect to minimizing the maximum latency. Our main result is an establishment of constant bounds on the price of stability (PoS) for routing unsplittable flows with linear latency. We show that the PoS is at most 6.83, which reduces to 4.57 when the linear latency functions are homogeneous. We also show the existence of a (54,1)-approximate Nash equilibrium. Additionally we address some algorithmic issues for computing an approximate Nash equilibrium.