Democratization Under the Threat of Revolution: Evidence From the Great Reform Act of 1832

We examine the link between the threat of violence and democratization in the context of the Great Reform Act passed by the British Parliament in 1832. We geo‐reference the so‐called Swing riots, which occurred between the 1830 and 1831 parliamentary elections, and compute the number of these riots that happened within a 10 km radius of the 244 English constituencies. Our empirical analysis relates this constituency‐specific measure of the threat perceptions held by the 344,000 voters in the Unreformed Parliament to the share of seats won in each constituency by pro‐reform politicians in 1831. We find that the Swing riots induced voters to vote for pro‐reform politicians after experiencing first‐hand the violence of the riots.     

ELECTED VERSUS APPOINTED REGULATORS: THEORY AND EVIDENCE

This paper contrasts direct election with political appointment of regulators. When regulators are appointed, regulatory policy becomes bundled with other policy issues the appointing politicians are responsible for. Because voters have only one vote to cast and regulatory issues are not salient for most voters, there are electoral incentives to respond to stakeholder interests. If regulators are elected, their stance on regulation is the only salient issue so that the electoral incentive is to run a pro‐consumer candidate. Using panel data on regulatory outcomes from U.S. states, we find new evidence in favor of the idea that elected states are more pro‐consumer in their regulatory policies. (JEL: H1, K2)     

DO BETTER PAID POLITICIANS PERFORM BETTER? DISENTANGLING INCENTIVES FROM SELECTION

The wage paid to politicians affects both the choice of citizens to run for office and the performance of those who are appointed. First, if skilled individuals shy away from politics because of higher opportunities in the private sector, an increase in politicians’ pay may change their mind. Second, if the re‐election prospects of incumbents depend on their in‐office deeds, a higher wage may foster performance. We use data on all Italian municipal governments from 1993 to 2001 and test these hypotheses in a quasi‐experimental setup. In Italy, the wage of mayors depends on population size and sharply rises at different thresholds. We apply a regression discontinuity design to the only threshold that uniquely identifies a wage increase: 5,000 inhabitants. Exploiting the existence of a two‐term limit, we further disentangle the composition from the incentive component of the effect of the wage on performance. Our results show that a higher wage attracts more‐educated candidates, and that better‐paid politicians size down the government machinery by improving efficiency. Importantly, most of this effect is driven by the selection of competent politicians, rather than by the incentive to be re‐elected.     

The Impact of Investor Horizon on Say‐on‐Pay Voting

Shareholder investment horizons have a significant impact on say‐on‐pay voting patterns. Short‐term investors are more likely to avoid expressing opinion on executive pay proposals by casting an abstaining vote. They vote against board proposals on pay only in cases where the CEO already receives excessive pay levels. In contrast, long‐term investors typically cast favourable votes. According to our findings, this is due to effective monitoring rather than collusion with the management. Overall, investor heterogeneity in terms of investment horizons helps explain say‐on‐pay voting, in particular the low levels of say‐on‐pay dissent, which have recently raised questions over the efficiency of this corporate governance mechanism .     

Political Economy of Mechanisms

We study the provision of dynamic incentives to self‐interested politicians who control the allocation of resources in the context of the standard neoclassical growth model. Citizens discipline politicians using elections. We show that the need to provide incentives to the politician in power creates political economy distortions in the structure of production, which resemble aggregate tax distortions. We provide conditions under which the political economy distortions persist or disappear in the long run. If the politicians are as patient as the citizens, the best subgame perfect equilibrium leads to an asymptotic allocation where the aggregate distortions arising from political economy disappear. In contrast, when politicians are less patient than the citizens, political economy distortions remain asymptotically and lead to positive aggregate labor and capital taxes.     

“Do as I Do and Not as I Say”: Exploring Price‐Oriented Maverick Buying During Supplier Selection

This article empirically examines the occurrence of price‐oriented maverick buying (MB) during supplier selection, in a direct purchasing process context. Drawing on agency theory, maverick buying, and total cost of ownership (TCO) literature, the statistically significant existence of price‐oriented MB is investigated and the purchasing manager (PM)‐related factors that influence such noncompliant behavior are determined. A discrete choice experiment is designed to simulate a TCO‐based supplier selection process in which an established purchasing framework agreement stipulates PMs not necessarily be price‐oriented (i.e., select suppliers primarily based on lowest price), and then models PM choice behavior in the supplier selection process (SSP), utilizing a conditional logit model (CLM) to determine PM compliance to the established purchasing framework agreement and identify if price‐oriented MB exists. Statistical tests utilizing comprehensive primary and secondary data are then conducted to determine if correlational relationships exist between PM‐related factors and PM price‐orientation. Results indicate that three PM‐related factors bear a significant correlational relationship to PM price‐orientation.     

Drivers and Enablers That Foster Environmental Management Capabilities in Small‐ and Medium‐Sized Suppliers in Supply Chains

The limited capabilities and resources available within many small‐ and medium‐sized enterprises frequently hamper an effective response to environmental pressures, which in turn hurts large buying firms (i.e., customers). Using a case study method with multiple suppliers of two large buying firms, we mapped factors that initiated and improved environmental capabilities in small‐ and medium‐sized enterprises over time. Through several specific mechanisms, buyers' green supply chain management initiated and then enabled the improvement of suppliers' environmental capabilities. Independent of buyers, internal championing of environmental concerns also provided an impetus for small‐ and medium‐sized enterprise suppliers to acquire resources outside the supply chain. Thus, synergistic linkages emerged in supportive buyer‐supplier relationships, resource acquisition, and capability development. When these findings are combined with earlier research on larger suppliers, an integrative framework emerges that provides direction for suppliers, buyers, and public agencies seeking to improve environmental performance.     

Designing Service Level Agreements for Inventory Management

Service level agreements (SLAs) are widely employed forms of performance‐based contracts in operations management. They compare performance during a period against a contracted service level and penalize outcomes exceeding some allowed deviation. SLAs have a number of design characteristics that need careful tuning to ensure that incentives are properly aligned. However, there is little theoretical research in this area. Using an example of an SLA for outsourcing inventory management, we make a number of recommendations. First it is preferable, if possible, that penalties be proportional to the underperformance rather than lump‐sum ones. This goes a long way towards mitigating strategic (“gaming”) behavior by the supplier. Second, it might be thought that giving “bonuses for good performance” rather than “penalties for bad performance” are essentially identical apart from the former being a more positive approach to management. This turns out to be incorrect in the case of large percentage service rate targets and that penalties will normally be preferred by the buying firm. Third, in order not to incorrectly penalize underperformance resulting purely from “noise” rather than supplier efforts, management might think it best to make allowed deviations from the target generous. Again intuition is not a helpful guide here: for proportional penalties, acceptable performance deviations should be close to the target. Although these results come from a particular inventory application, it is likely that the lessons are applicable to SLAs in general.     

A Structural Analysis of the Effectiveness of Buying Firms' Strategies to Improve Supplier Performance

Many manufacturing firms have increased the amount of component parts and services they outsource, while refocusing on their core capabilities. Outsourcing parts and services to independent, external suppliers means that suppliers' performance is increasingly critical to the long‐term success of these buying firms. Buying firms are increasingly using disparate supplier development strategies to improve supplier performance including supplier assessment, providing incentives for improved performance, instigating competition among suppliers, and direct involvement of the buying firm's personnel with suppliers through activities such as training of suppliers' personnel. Using resource‐based theory, internalization theory, and structural equation modeling, we examine the impact of these supplier development strategies on performance. We conclude that direct involvement activities, where the buying firm internalizes a significant amount of the supplier development effort, play a critical role in performance improvement.     

A Multidisciplinary Cognitive Behavioural Framework of Impulse Buying: A Systematic Review of the Literature

Impulse buying (IB) is one of the most fragmented concepts in the marketing and consumer literature. This has resulted in some contradictory findings and a lack of an overarching theoretical framework for understanding the IB process and its outcomes. Based on a systematic review of the literature published over the past 60 years, the authors synthesize various research perspectives into a comprehensive multidisciplinary framework of IB – linking antecedents, triggers, the buying act and post‐purchase outcomes. The paper makes four specific contributions relevant to both academic researchers and practitioners. First, it provides a comprehensive understanding of IB as a process and outcome, by systematically reviewing the existing literature. Second, it specifically recognizes and discusses the triggers of IB, by drawing on literature related to the buying process, intentions and motivations. Third, this is the first meta‐analysis review in the area. Finally, it considers the potential consequences of IB that lead to subsequent IB, and provides a framework for future investigation. This paper also addresses a problem of relevance to both academics and practitioners, proposing further research and managerial implications.     

Group Buying of Competing Retailers

Under group buying, quantity discounts are offered based on the buyers' aggregated purchasing quantity, instead of individual quantities. As the price decreases with the total quantity, buyers receive lower prices than they otherwise would be able to obtain individually. Previous studies on group buying focus on the benefit buyers receive in reduced acquisition costs or enhanced bargaining power. In this paper, we show that buyers can instead get hurt from such cooperation. Specifically, we consider a two‐level distribution channel with a single manufacturer and two retailers who compete for end customers. We show that, under linear demand curves, group buying is always preferable for symmetric (i.e., identical) retailers. For asymmetric retailers (i.e., differing in market base and/or efficiency), group buying is beneficial to the smaller (or less efficient) player. However, it can be detrimental to the larger (or more efficient) one. Despite the lower wholesale price under group buying, the manufacturer can receive a higher revenue. Interestingly, group buying is more likely to form when retailers are competitive in different dimensions. These insights are shown to be robust under general nonlinear demand curves, except for constant elastic demand with low demand elasticity.     

Product Launches and Buying Frenzies: A Dynamic Perspective

Buying frenzies caused by a firm's intentional undersupplying of a new product are frequently evident in several industries including electronics (cell phones, video games), luxury automobiles, and fashion goods. We develop a dynamic model of buying frenzies that incorporates the firm's manufacturing and sale of a product over time and characterizes the conditions under which inducing such frenzies is an optimal strategy. We find that buying frenzies occur when customers are sufficiently uncertain about their valuations of the product and when they discount the future sufficiently but not excessively. We propose measures of “customer desperation” and of the extent of scarcity to measure the depth and breadth of buying frenzies, respectively. We also demonstrate that such frenzies can have a significantly positive effect on firm profits and partially recover the loss due to non‐commitment to future prices. This study provides managerial insights on how firms can influence market response to a new product through production, pricing, and inventory decisions to induce profitable frenzies.     

重要股东市场行为引导下的利益趋同与壕沟防守效应

重要股东的市场行为不仅会对股价造成直接影响,还因其影响公司成长、与其他投资者的利益相冲突而倍受证券理论与实务界的关注。本文以存在增减持行为的A股上市公司为样本,按主成分分析法构建成长性指标,通过对重要股东增减持股票与公司成长性间的多元回归分析,研究其市场行为在多因素综合影响下对利益趋同与壕沟防守效应的催化作用。实证结论显示:重要股东增持总会强化利益趋同、减持强化壕沟防守;第一大股东持股比例越多,壕沟防守效应越明显,前十大股东持股比例越多,利益趋同效应越明显,体现了股权制衡与股权控制的平衡关系。     

NORM ENFORCEMENT: ANGER,INDIGNATION, OR RECIPROCITY?

The enforcement of social norms often requires that unaffected third parties sanction offenders. Given the renewed interest of economists in norms, the literature on third‐party punishment is surprisingly thin. In this paper, we report the results of an experiment designed to replicate the anger‐based punishment of directly affected second parties and evaluate two distinct explanations for third‐party punishment: indignation and group reciprocity. We find evidence in favor of both, with the caveat that the incidence of indignation‐driven sanctions is perhaps smaller than earlier studies have hinted. Furthermore, our results suggest that second parties use sanctions to promote conformism while third parties intervene primarily to promote efficiency.     

心理模拟:一种有效预防冲动购买行为的方法

冲动购买是比较典型的消费者非理性购买行为。以往关于冲动购买的文献大量集中于探讨影响消费者冲动性的因素上面,而对于消费者自我控制的研究较少。本文基于自我控制的欲望—意志力模型,运用实验方法,探讨心理模拟技术对消费者冲动购买的影响。实验结果发现,过程模拟可以显著降低消费者的冲动购买水平,而结果模拟则明显提高消费者的冲动购买水平,高低冲动特质的人在这种效果上呈现明显差异;在不加控制的情况下,高冲动特质的人更偏好结果模拟,低冲动特质的人更偏好过程模拟。     

Managing Retail Shelf and Backroom Inventories When Demand Depends on the Shelf‐Stock Level

Inventory displayed on the retail sales floor not only performs the classical supply function but also plays a role in affecting consumers’ buying behavior and hence the total demand. Empirical evidence from the retail industry shows that for some types of products, higher levels of on‐shelf inventory have a demand‐increasing effect (“billboard effect”) while for some other types of products, higher levels of on‐shelf inventory have a demand‐decreasing effect (“scarcity effect”). This suggests that retailers may use the amount of shelf stock on display as a tool to influence demand and operate a store backroom to hold the inventory of items not displayed on the shelves, introducing the need for efficient management of the backroom and on‐shelf inventories. The purpose of this study is to address such an issue by considering a periodic‐review inventory system in which demand in each period is stochastic and depends on the amount of inventory displayed on the shelf. We first analyze the problem in a finite‐horizon setting and show under a general demand model that the system inventory is optimally replenished by a base‐stock policy and the shelf stock is controlled by two critical points representing the target levels to raise up/drop down the on‐shelf inventory level. In the infinite‐horizon setting, we find that the optimal policies simplify to stationary base‐stock type policies. Under the billboard effect, we further show that the optimal policy is monotone in the system states. Numerical experiments illustrate the value of smart backroom management strategy and show that significant profit gains can be obtained by jointly managing the backroom and on‐shelf inventories.     

基于冲动性购买诱发因素的消费者冲动性购买之购后满意度研究

选择以冲动性购买的购后满意度这一"购后行为"作为研究视角,并从冲动性购买诱发因素入手,利用实验方法分析了冲动性购买诱发因素与冲动性购买购后满意度之间的关系。研究表明,价格促销刺激有无(外部环境刺激因素)、时间压力高低(购买情境刺激因素)、冲动性购买倾向高低(消费者个人特质)均对冲动性购买之购后满意度具有显著影响,而且冲动性购买倾向高低对这种影响具有一定的干扰效果。     

互惠对工作要求——工作满意度曲线关系的调节作用

本文运用中国文化背景下开发的互惠量表,通过对西安某合资制药企业210名员工的调查,考察了企业对员工三种类型的互惠行为对工作要求—工作满意度的倒U型关系的调节作用。调查结果表明,广义互惠、平衡互惠越高,二者的倒U型关系越明显,负互惠越高,二者的倒U型关系越不明显。     

DO PARTIES MATTER FOR ECONOMIC OUTCOMES? A REGRESSION‐DISCONTINUITY APPROACH

A long‐standing issue in political economics is to what extent party control makes a difference in determining fiscal and economics policies. This question is very difficult to answer empirically because parties are not randomly selected to govern political entities. This article uses a regression‐discontinuity design, namely, party control changes discontinuously at 50% of the vote share, which can produce “near” experimental causal estimates of the effect of party control on economic outcomes. The method is applied to a large panel data set from Swedish local governments with a number of attractive features. The results show that there is an economically significant party effect: Left‐wing governments spend and tax 2–3% more than right‐wing governments. Left‐wing governments also have 7%lower unemployment rates, which is partly due to that left‐wing governments employ 4% more workers than right‐wing governments. (JEL: C21, D72, D78, H71, H72)