THE IMPACT OF MANAGERIAL CHANGE ON PERFORMANCE: THE ROLE OF TEAM HETEROGENEITY

When a key responsibility of a manager is to allocate more or less attractive tasks, subordinates have an incentive to work hard and demonstrate their talents. As a new manager is less well informed, management dismissals reinvigorate this tournament competition—but only in sufficiently homogeneous teams. We investigate this hypothesis using a large dataset on dismissals of soccer coaches, whose main task is indeed the selection of players. We find that dismissals enhance performance (only) in homogeneous teams. Moreover, we show that there is typically a negative selection bias when evaluating succession effects, which reconciles previous contradictory findings. (JEL D22, J44, J63)     

WINNING IN PROFESSIONAL TEAM SPORTS: HISTORICAL MOMENTS

Our aims in this paper are to (1) examine the higher moments of the distribution of winning percentages and (2) discover economic implications of such an examination. The results prove useful to both current sports league policy questions and future research. We speculate that the institutional differences between North American pro leagues and European soccer leagues will prove fruitful areas for future research on the determination of competitive balance. (JEL C1, L83, Z20)     

ENGLISH PROFICIENCY AND LABOR MARKET PERFORMANCE: EVIDENCE FROM THE ECONOMICS PROFESSION

This article investigates whether the global spread of the English language provides an inherent advantage to native English speakers. This question is studied within the context of the economics profession, where the impact of being a native English speaker on future publishing success is examined. English speakers may have an advantage because they are writing in their native language, the quality of writing is a crucial determinant of publishing success, and all the top economics journals are published in English. Using a ranking of the world's top 2.5% of economists, this article confirms that native English speakers are ranked 100 spots higher (better) than similar non‐native English speakers. A variety of extensions examine and dispel many other potential explanations. (JEL A11, J44, F66)     

DEREGULATING RELIGION: THE ECONOMICS OF CHURCH AND STATE

Traditional religious research fails to recognize religion as a market phenomenon. It especially overlooks supply-side factors that shape the incentives and opportunities of religious firms, emphasizing instead demand-side shifts in the perceptions, tastes, and needs of consumers. This paper reviews the effects of government actions that alter religious supply. Our examples demonstrate that simple deregulation lies at the root of major religious trends and that the vitality of a religious market depends critically upon its competitiveness.     

EDWIN CHADWICK AND THE ECONOMICS OF CRIME

"⃛Among all the administrative questions which you have touched (and they are both numerous and of the highest importance), there is hardly one on which you have not originated thoughts and suggestions of the greatest value ⃛"     

DYNAMIC COMMON AGENCY AND INVESTMENT: THE ECONOMICS OF MOVIE DISTRIBUTION

This article analyzes investment and other strategies in a stationary dynamic common agency model of movie distribution. Contract choices interact with other strategic choices. The model explains several facts; movie distributors avoid head-to-head new hit releases, hits have longer runs than flops, and distributors receive the lion's share of value generated by hits. The model yields testable implications about the effects of vertical integration on inventory turnover, release decisions, run lengths, and allocations, but the results depend on how integration affects relative bargaining power. Vertical integration is privately profitable and may improve social welfare even though it reduces industry profits. (JEL L14 , L22 , L82 , C61 )     

INFORMATION, CHANCE, AND EVOLUTION: ALCHIAN AND THE ECONOMICS OF SELF-ORGANIZATION

The strong invisible hand theorem says there is emergent order in human affairs. Smith and Hayek described it; Alchian gave the evolutionary proof. He showed that profit maximization is an emergent property of evolution when survival depends on positive profits. I extend Alchian's argument to consider how evolution discovers and adopts successful organizational forms. Evolving organizations "lock in" on inefficient equilibria. Noise and imitation—the evolutionary operators Alchian stressed—promote learning and adaptation to move the evolutionary dynamic off inefficient paths. Evolution is orders of magnitude faster than optimization; the relative time scales make the processes observationally distinguishable.     

THE ECONOMICS OF CARPOOLS

The paper shows how separate parts of a work trip enter the decision to carpool, and examines how the size of a carpool is related to the gasoline price, the wage rate, speed limits, and other factors. The paper also suggests that policies designed to promote carpooling may produce perverse effects on gasoline consumption.     

THE ECONOMICS OF TERRORISM

This paper treats terrorism as an economic phenomenon— as a way to understand it and to control it. It uses the tools of substitution, innovation, and cycles and concludes by noting the importance of intelligence and that the most valuable approach to defeating terrorism is that of denying resources to the terrorists rather than attempting to protect assets at risk. It notes that we are probably not any safer than before the implementation of the post–9/11 strategies and emphasizes that new initiatives must be undertaken to prevent terrorist use of weapons of mass destruction.     

THE ECONOMICS OF AEROBICS

This study presents a simple model that weighs the benefits and costs of aerobic exercise to the individual. The model assumes that adding years to life serves as the primary benefit of exercise, and that hours of exercise over a lifetime serve as the cost. Given previous estimates of individual rates of time preference this study finds that people act rationally when they choose to watch a track event rather than choose to run themselves. (JEL I1)     

AT THE MOVIES: THE ECONOMICS OF EXHIBITION CONTRACTS

We describe a real-world profit sharing contract—the movie exhibition contract—and consider alternative explanations for its use. Two explanations based on difficulties with forecasting fit the facts better than asymmetric information models. The first emphasizes two-sided risk aversion; the second emphasizes measurement costs. Transaction costs and long-term relationships also affect contractual practices. We use an original data set of all exhibition contracts involving 13 theaters owned by a prominent St. Louis exhibitor over a two-year period to inform our theories and test hypotheses. The findings question traditional contract theory and may be relevant for other contracting environments.(JEL L14 , L82 , D45 , D80 )     

SUPPLY SHOCKS AND THE INTEREST RATE

The classic example of a temporary supply shock is a failed agricultural harvest. Theoretically, adverse temporary supply shocks are predicted to raise the ex ante real interest rate; that is, a below-normal harvest raises the interest rate. Apparently, however, no one has tested this conclusion using agriculture as the supply shock. This paper examines nineteenth century French data and confirms the hypothesis that deviations from the "average" harvest have an inverse effect on the interest rate. It also finds that temporary fluctuations in government spending affect the interest rate: higher than normal government spending raises the interest rate.