One-shot exchange networks and the shadow of the future

From the Prisoner's Dilemma and other games, it is well known that strategy selection in one-shot games can be very different from that in iterated games. Because exchange structures were studied only as iterated games, whether one-shot structures differ was not known. Nor have exchange theories previously considered whether events in structures would be different if studied as one-shot games. This paper offers new theory to predict one-shot exchange structures and one-shot experiments to test that theory. As predicted, the experiments found that processes and outcomes of one-shot exchange structures are quite different from those of iterated exchange structures. For example, certain relations that are strategically used as threats in iterated exchange structures occur very rarely in one-shot structures. It follows that power differences in one-shot structures regress from those observed for repeated structures.     

The Nature and Consequences of Organization-Employee and Union-Member Exchange: An Empirical Analysis

Drawing on a study of 423 union members in a UK Primary Care Trust, we use structural equation modeling to investigate the extent to which organizational and union commitment and citizenship behaviors are a function of economic and social exchange. Findings suggest that the organization-employee and union-member exchanges are distinct, with organizational commitment a function of organization-employee exchange and union commitment and citizenship behaviors (UCB) a function of union-member exchange. Findings also suggest that union commitment and UCB are motivated primarily by social exchange, with economic exchange playing a supporting role. In addition, for organizational commitment, social exchange also seemed to be relatively more important. There was no evidence that perceived industrial relations climate moderates these relationships. Implications for industrial relations and workplace social partnerships are considered.     

EXCHANGE PROCESSES IN HISTORY: INTEGRATING THE MICRO AND MACRO LEVELS OF ANALYSIS

The existing form of social exchange theory has serious flaws. Yet, this article argues that exchange theory should and can be a powerful tool for analysis at both the micro and macro levels. A model of exchange is developed that: (1) includes temporality; (2) includes both positive and negative sanctions; (3) defines rationality and voluntariness in such a way as to account for long-term, stable systems of unequal exchange; and (4) links the micro and macro levels of analysis. Selective historical materials are introduced to analyze the problem of routine, peaceful, unequal exchange between Romans and barbarians inside the Roman Empire. In interpersonal exchange, it shows, all the terms of exchange are not negotiated by the partners to exchange. Governing rules have been established by collective actors at the macro level for social exchange at the micro level. Traditional exchange theory has failed to identify the historically distant conflict of macro level actors over governing rules.     

Dynamic exchange networks

Considering the theoretical and empirical untenability of static exchange networks, researchers have asked how exchange outcomes change when links are added or deleted. The present paper assesses the validity of seemingly sensible propositions concerning the effects of adding and deleting a link on (i) the payoffs of the actors in the link, (ii) the payoffs of actors in neighboring links and (iii) the variance of payoffs in the exchange network. The propositions were examined by applying expected value theory (EVT) to all 13,597 networks up to size 8. All propositions were falsified. Some falsifications of propositions could be attributed to EVTs prediction that actors use sub-optimal exchange relations. Since other well-known theories of exchange, like power-dependence theory and network exchange theory, also predict that actors use sub-optimal relations, these results are robust to selection of the theory of exchange.     

RISK, TRANSACTIONS CHARGES, AND THE MARKET FOR FOREIGN EXCHANGE SERVICES

This paper suggests that transactions charges in foreign exchange markets, rather than being solely brokerage fees, represent exchange rate uncertainty in periods of great fluctuations by including remuneration for the assumption of risk by foreign exchange dealers. Since most of the cost of exchange rate uncertainty may be largely endogenously included in the foreign exchange markets, attempts to examine the efficient market hypothesis in these markets should most appropriately include specific consideration of transactions costs. There appears to be empirical support for the premise that transactions charges are positively related to exchange rate risk, and, as well, inclusion of contemporaneous bid-ask spreads into the interest parity schedule leaves few unexplained profits from dollar-pound covered interest arbitrage during the 1970's and underscores the notion of classifying periods by degree of turbulence in analyzing covered interest arbitrage.     

Transformational Leadership in Labor Organizations: The Effects on Union Citizenship Behaviors

This study suggests that transformational leadership influences union citizenship behavior by fostering a covenantal relationship between the union and the union member. A framework for covenantal relationships is developed from social exchange and social identity theories. Transformational leadership behavior was found to be strongly related to perceived union support, a social exchange construct. The results also indicated that there are positive and significant relationships between other social exchange constructs such as felt obligation and trust. Social identity theory is used to augment social exchange theory in explaining the process by which transformational leadership behaviors relate to union citizenship behaviors through union-based self-esteem. Limitations of the study, implications for union management, and directions for future research issues are discussed.     

The impact of caring on exchange choices and efficiencies: a modification of Boulding’s three social organizers

In this article, a system is developed for modeling traditional exchanges and those based, wholly or in part, on threats or interdependent utility functions (i.e., caring). This structure is used to analyze 1) the impact of interpersonal and intergroup perceptions on exchange choice and efficiency; 2) factors influencing firm decisions to accede to or resist coerced exchanges; and 3) conditions under which exchanges involving involuntary parties are rational. It is argued that, in addition to impacts on psychic returns, caring impacts on exchange efficiency through its effects on the quantity of information, due to attraction or aversion, and the quality of information processing, due to bias. Malevolence is never conducive to efficient exchange, but high levels of benevolence may also be detrimental. It also is shown that the economics of coerced exchanges bear strong similarities to analyses regarding price discrimination and using free samples for marketing. Firms are most likely to resist coerced exchanges if their marginal costs are rapidly rising or if acceding to the coerced exchange would reduce market demand. Possible trends in the importance of caring in exchange are also discussed.     

International Student Exchange in Australian Social Work Education

International student exchange is pursued by Australian schools of social work as a strategy to engage with the internationalisation agenda set by government, universities, and the profession. However, little concrete information about the nature and scope of these activities exists. The study reported here aimed to address this gap. Twenty-seven of the 30 Australian universities that offer social work programs participated in an online survey about international student exchange activities. The results indicate that a majority of schools (n?=?23) do engage in such activities, with international field placements the most frequent form of exchange. Exchanges are most likely to be facilitated and managed by social work staff. The findings, and their implications for the development of good practice in international student exchange, are discussed. This research provides a “point-in-time” snapshot of international exchange in Australian social work education and a benchmark for future analyses of this expanding practice in the profession.     

Bargaining policies and social exchange: Review of a neglected concept

Social exchange is distinguished from the “economic” through restriction of inquiry to the universe of nonpecuniary counters, chief among which are inclusion, position, and exclusion—in and from enduring groups. Explicitly or implicitly, sociological exchange theorists accept Edgeworth's neoclassical model as settled social scientific knowledge that can be explained and further elaborated in terms of institutionalized norms. Blau's elaborated neoclassical model of bilateral exchange is compared to Shackle's “action” model. Shackle allows actors a choice of bargaining policies, whereas Blau, following Edgeworth, arbitrarily imposes a single policy to objectify indifference curves and enable “outside observers” to test hypotheses relating the terms of exchange to the differentiation of power in enduring groups. Were the imposition unwarranted, such “empirical” claims would vanish. The neoclassical restriction also prevents actors from conceiving “investment opportunities” in bilateral exchange, thus defeating the sociological objective of deriving power from social exchange. Three figures illustrating Edgeworthian indifference curves are provided along with an appendix to clarify the distinction between objective and subjective theory.     

Transitional appreciation of equilibrium exchange rates and the ERM II

A suitable parity for exchange rate fixing can be derived from an analysis of the equilibrium exchange rate. As the equilibrium exchange rates of the new EU 5 countries, the Czech Republic, Hungary, Poland, Slovenia, and the Slovak Republic, tend to exhibit appreciation trends, credibility of the potential commitment to fixed exchange rate parity with respect to the euro can be undermined. In order to investigate this issue, we estimate a behavioral model of real exchange rates for EU 5 countries and derive the respective equilibrium real exchange rates. Using the linear-quadratic filter we estimate permanent equilibrium exchange rates and their stationary points. We find that as of 2004 fixing of the national currencies to the euro should not be undermined by further significant trend appreciation in the equilibrium exchange rates of the EU 5 countries, in aggregate.     

Getting is Giving: Time Banking as Formalized Generalized Exchange

This article applies principles of the social exchange framework of social psychology to the social phenomenon of time banking. A “time bank” is an organization that facilitates the giving and receiving of services among its members by allowing them to provide a service, such as an hour of tutoring, in exchange for a “time credit,” which can then be redeemed for receipt of a service, such as an hour of yard work. Empirical research on time banking has focused on its ability to build community and its place within the sharing economy as a form of “connected consumption.” We build on these lines of thought by examining the practice of time banking as a formalized version of generalized exchange. Generalized exchange is a prosocial type of social exchange in which benefits are repaid indirectly, sometimes referred to as “paying it forward.” We discuss how two of time banking's most commonly cited benefits, building social capital and empowering members, can be better understood through this lens of generalized exchange. We then identify two specific motivational issues that time banks face and use a social exchange perspective to propose a possible solution under a framework we refer to as getting is giving.     

THE REAL EXCHANGE RATE AND REAL INTEREST DIFFERENTIALS: THE ROLE OF THE TREND‐CYCLE DECOMPOSITION

We propose an alternative model and method to reconcile the puzzling feature in the relationship between the real exchange rate and real interest rate differentials. Our simple two‐country model with preset prices, along with firms' misperception about the future exchange rate, implies that the real exchange rate follows an ARIMA(0,1,p) process. This allows us to compute the exact Beveridge‐Nelson decomposition, which is a model‐consistent decomposition. In accordance with our model, unit roots in the real exchange rates are found; and statistical inference is partially found to be affirmative regarding the link between the real exchange rate detrended by the Beveridge‐Nelson decomposition and corresponding real interest differentials. (JEL F31, F41)     

Exchange and Power in Networks of Interorganizational Relations*

An extension of the exchange model for the analysis of interorganizational relations is developed, incorporating into the model recent developments in exchange theory. Organizational interactions are viewed as networks of exchange relation, and various forms of interorganizational activity such as merger and coalition or alliance formation are analyzed in relation to power and position in the network. Linkages between various types of exchange networks and what economists refer to as market structures are examined. Finally, previous criticisms of exchange formulations are reviewed, and directions for future theoretical and empirical work concerning networks of interorganizational relationships are discussed.     

FINANCIAL AND INSURANCE SERVICES TRADE: DOES EXCHANGE RATE OR INCOME MATTER?

This paper aims to investigate the impacts of exchange rate and income changes on financial and insurance services trade by utilizing the quarterly bilateral trade data of the United States and its major trading partners from 2003 to 2017. No long‐run exchange rate effects on imports and exports of insurance services trade are found. The impact of exchange rates on insurance services may be weak since competition among service providers depends on product differentiation than on exchange rates. On the contrary, income demonstrates significant impacts on both financial and insurance services trade in the United Kingdom, Canada, Japan and Australia. (JEL C22, F14, G20)     

Empire,emotion, exchange: (dis)orienting encounters of/with post-9/11 US cultural diplomacy

ABSTRACT

This article disentangles how empire, emotion and exchange intersect and work to orient and disorient processes of identity formation within post-9/11 US cultural diplomacy. Focusing on everyday cultural exchange practices, it challenges the particular cosmopolitanism embedded in these programmes that hinges upon the affective and the colonial. It reflects on how this entanglement of empire, emotion and exchange operates through modes of governmentality that produce energized, more governable subjects and masks such operations of power. Analysing one particular exchange – YES – this article disorients colonial logics of subjectification by exploring affective exchange encounters that are always already (dis)orienting. It then serves as a disorienting encounter with cultural diplomacy through four provocations, illustrating how empire is (always) (dis)orientating, can (dis)orient, can be disoriented, and must undergo disorientation. First, post-9/11 US cultural diplomacy and its logic of cosmopolitanism suggest empire is always (dis)orientating via its manifestation in ‘unusual’ sites; while exchange programmes’ onus on celebrating difference appears to conflict with ‘where’ empire ‘normally’ orients itself, as post/decolonial scholarship reveals, it is in the seemingly benign/unquestionable where empire does its work most profoundly. Second, the entanglement of emotion, empire and exchange can (dis)orient exchange subjects through how they are governed to perform and oscillate between ever-shifting ‘ideal’ subjectivities (familiar national/cosmopolitan global/enterprising neoliberal). Third, tracing colonial echoes and spectres in these exchanges reveals empire as disoriented, as that which is analytically ‘less conventional’. An arguably ‘conventional’ analysis oriented around a neo-colonial logic and an imperialistic ‘America’ while seductive in its simplicity obscures the governmental and performative complexities operating within these programmes. Finally, disorientation enables empire to be challenged and disrupted, opening up possibilities for post-9/11 US cultural diplomacy, and the self-Other relations comprising it, to be reimagined. In short, this paper’s analytical disorientation can lead to a reorientation of cultural diplomacy.     

EXCHANGE RATE SYSTEMS AND INVESTOR PREFERENCES

This paper investigates whether or not floating exchange rates add an undesirable level of risk to international investment positions. For investors holding currencies, we find that fixed exchange rates are preferred to floating exchange rates, which supports the often-argued case that floating exchange rates do excessively increase the riskiness of investment. However, in the more realistic case of investors holding foreign securities, we find that floating exchange rates are preferred to fixed exchange rates; that is, we find that floating exchange rates have not added an undesirable level of risk to international investment positions.     

The stability of exchange networks

Economic and sociological exchange theories predict divisions of exchange benefits given an assumed fixed network of exchange relations. Since network structure has been found to have a large impact on actors’ payoffs, actors have strong incentives for network change. We answer the question what happens to both the network structure and actor payoffs when myopic actors change their links in order to maximize their payoffs. We investigate the networks that are stable, the networks that are efficient or egalitarian with varying tie costs, and the occurrence of social dilemmas. Only few networks are stable over a wide range of tie costs, and all of them can be divided into two types: efficient networks consisting of only dyads and at most one isolate, and Pareto efficient and egalitarian cycles with an odd number of actors. Social dilemmas are observed in even-sized networks at low tie costs.     

Analysis of contested reports in exchange networks based on actors’ credibility

Exchanges of information, goods, and services are an essential part of human relations. However, a significant number of reported exchange ties tend to be contested: the reports of the sender and the receiver in an exchange do not concur with each other. To accurately understand the exchange ties between actors and the properties of the associated exchange networks, it is important to address such disagreement. Common practices either eliminate the contested reports or symmetrize them. Neither of them is ideal, as both underuse valuable information in the reports. In this paper, we propose new methods for handling contested exchange ties. The key idea is to measure actors’ credibility based on their asymmetric connections. For example, an actor is less credible the more contested ties she or he has. Using the credibility scores thus calculated, we develop two methods for handling contested ties. The first method is deterministic: it takes the report of the more credible actor as a reflection of the true exchange status between two actors. The second method is stochastic: it assumes the true exchange status between two actors is a random draw from their reports with probabilities proportional to their credibility. We illustrate the above methods by analyzing contested reports in cigarette exchange networks among middle school students in China and social and economic exchange networks among rural households in South Africa. The results show that our methods provide more reasonable corrections to contested reports than previous methods.     

Bayesian implementation in exchange economies with state dependent preferences and feasible sets

This paper considers Bayesian and Nash implementation in exchange economic environments with state dependent preferences and feasible sets. We fully characterize Bayesian implementability for both diffuse and non-diffuse information structures. We show that, in exchange economic environments with three or more individuals, a social choice set is Bayesian implementable if and only if closure, non-confiscatority, Bayesian monotonicity, and Bayesian incentive compatibility are satisfied. As such, it improves upon and contains as special cases previously known results about Nash and Bayesian implementation in exchange economic environments. We show that the individual rationality and continuity conditions, imposed in Hurwicz et al. [12], can be weakened to the non-confiscatority and can be dropped, respectively, for Nash implementation. Thus we also give a full characterization for Nash implementation when endowments and preferences are both unknown to the designer. Received: 4 March 1996 / Accepted: 8 September 1997     

INDETERMINACY AND VOLATILITY OF EXCHANGE RATES UNDER IMPERFECT CURRENCY SUBSTITUTION

We know that when currencies are perfect substitutes, exchange rates could become indeterminate. We show that even when currencies are less than perfect substitutes exchange rates could display volatility unrelated to economic fundamentals. With increases in currency substitution: (1) the exchange rate becomes more sensitive to changes in economic fundamentals, increasing its volatility; (2) the exchange rate could become indeterminate, and it is more likely to become so if governments pursue similar monetary policies; (3) currencies with high nominal interest rates would decline significantly and the exchange rate becomes more sensitive to changes in the supply of those currencies.