Bargaining on Board Structure at the Initial Public Offering

Going public often creates an agency conflict between the owner-manager and minority shareholders. One possible way to resolve this conflict is through independent board monitoring. But board monitoring does not arise automatically in IPO companies. Owner-managers tend to entrench and capture the board. Analyzing a sample of French IPO firms, we find that the fraction of independent directors declines if the owner-manager is more powerful. However, we find that large pre-IPO non-management shareholders, such as venture capitalists, are successful in bargaining on board composition. These shareholders are successful in opposing the owner-manager and prevent a further reduction in the proportion of independent directors in the board. We also find that these shareholders contract on board composition in shareholder agreements.     

A Smooth Model of Decision Making under Ambiguity

We propose and characterize a model of preferences over acts such that the decision maker prefers act f to act g if and only if 𝔼_μφ(𝔼_πu○f) 𝔼_μφ(𝔼_πu○g), where 𝔼 is the expectation operator, u is a von Neumann–Morgenstern utility function, φis an increasing transformation, and μis a subjective probability over the set Πof probability measures πthat the decision maker thinks are relevant given his subjective information. A key feature of our model is that it achieves a separation between ambiguity, identified as a characteristic of the decision maker's subjective beliefs, and ambiguity attitude, a characteristic of the decision maker's tastes. We show that attitudes toward pure risk are characterized by the shape of u, as usual, while attitudes toward ambiguity are characterized by the shape of φ. Ambiguity itself is defined behaviorally and is shown to be characterized by properties of the subjective set of measures Π. One advantage of this model is that the well‐developed machinery for dealing with risk attitudes can be applied as well to ambiguity attitudes. The model is also distinct from many in the literature on ambiguity in that it allows smooth, rather than kinked, indifference curves. This leads to different behavior and improved tractability, while still sharing the main features (e.g., Ellsberg's paradox). The maxmin expected utility model (e.g., Gilboa and Schmeidler (1989)) with a given set of measures may be seen as a limiting case of our model with infinite ambiguity aversion. Two illustrative portfolio choice examples are offered.     

Social media and Web 2.0 for knowledge sharing in product design

Working collaboratively with internal and external partners (suppliers, customers and internal stakeholders) has been at the epicentre of product design. Knowledge sharing has been well recognised in this context. However, there is limited research that has addressed the role of social media/Web 2.0 in facilitating knowledge sharing for sense- and decision-making within product design. To address this gap, this study draws on the resource-based view (RBV) of the firm and two vignettes that relate to ‘collaborative co-design’ and ‘collaborative design-to-order’. We illustrate the role of social media/Web 2.0 in building knowledge sharing capabilities for sense- and decision-making for internal and external partners during product design. Limitations and further research into the use of social media/Web 2.0 are also discussed.     

Reviewing Leadership Styles: Overlaps and the Need for a New ‘Full‐Range’ Theory

A central topic in leadership research concerns the impact of leadership style – the pattern of attitudes that leaders hold and behaviors they exhibit. Since the year 2000, several new leadership styles have been proposed to capture important missing aspects beyond the dominant charismatic/transformational and transactional framework. The authors review the emerging literature on these new styles – ideological leadership, pragmatic leadership, authentic leadership, ethical leadership, spiritual leadership, distributed leadership, and integrative public leadership – as well as the recent work on servant leadership. They also comment on the Ohio State studies on leadership, and then discuss the ways in which these many styles overlap with transformational leadership and each other, and issue a call to leadership researchers to collectively develop a new ‘full‐range’ model of leadership that encompasses and distills what is unique about these various styles. The authors argue that such an integrated full‐range model is necessary for research on leadership style to progress.     

Nuclear Waste Management under Approaching Disaster: A Comparison of Decommissioning Strategies for the German Repository Asse II

This article compares different strategies for handling low‐ and medium‐level nuclear waste buried in a retired potassium mine in Germany (Asse II) that faces significant risk of uncontrollable brine intrusion and, hence, long‐term groundwater contamination. We survey the policy process that has resulted in the identification of three possible so‐called decommissioning options: complete backfilling, relocation of the waste to deeper levels in the mine, and retrieval. The selection of a decommissioning strategy must compare expected investment costs with expected social damage costs (economic, environmental, and health damage costs) caused by flooding and subsequent groundwater contamination. We apply a cost minimization approach that accounts for the uncertainty regarding the stability of the rock formation and the risk of an uncontrollable brine intrusion. Since economic and health impacts stretch out into the far future, we examine the impact of different discounting methods and rates. Due to parameter uncertainty, we conduct a sensitivity analysis concerning key assumptions. We find that retrieval, the currently preferred option by policymakers, has the lowest expected social damage costs for low discount rates. However, this advantage is overcompensated by higher expected investment costs. Considering all costs, backfilling is the best option for all discounting scenarios considered.     

Efficient Labour Contracts: Impediments and How to Circumvent Them

Efficient labour contracts on wages and employment could contribute to a reduction in unemployment in Europe. Their implementation is hindered by institutional settings and asymmetric incentives at different levels of the bargaining process. Employed workers have no incentives to forego wage increases at the firm level for potential employment gains, while employers’ federations possess no means to guarantee an employment increase for the sector covered by a wage agreement. Decentralization of wage bargaining does not solve this incentive problem. It is demonstrated that the introduction of marketable certificates may reduce the asymmetric incentive effects enabling contracts with higher employment.     

Notes on L(1,1) and L(2,1) labelings for n-cube

Suppose \(d\) is a positive integer. An \(L(d,1)\) -labeling of a simple graph \(G=(V,E)\) is a function \(f:V\rightarrow \mathbb{N }=\{0,1,2,{\ldots }\}\) such that \(|f(u)-f(v)|\ge d\) if \(d_G(u,v)=1\) ; and \(|f(u)-f(v)|\ge 1\) if \(d_G(u,v)=2\) . The span of an \(L(d,1)\) -labeling \(f\) is the absolute difference between the maximum and minimum labels. The \(L(d,1)\) -labeling number, \(\lambda _d(G)\) , is the minimum of span over all \(L(d,1)\) -labelings of \(G\) . Whittlesey et al. proved that \(\lambda _2(Q_n)\le 2^k+2^{k-q+1}-2,\) where \(n\le 2^k-q\) and \(1\le q\le k+1\) . As a consequence, \(\lambda _2(Q_n)\le 2n\) for \(n\ge 3\) . In particular, \(\lambda _2(Q_{2^k-k-1})\le 2^k-1\) . In this paper, we provide an elementary proof of this bound. Also, we study the \(L(1,1)\) -labeling number of \(Q_n\) . A lower bound on \(\lambda _1(Q_n)\) are provided and \(\lambda _1(Q_{2^k-1})\) are determined.     

Challenges and solutions for marketing in a digital era

Internet usage continues to explode across the world with digital becoming an increasingly important source of competitive advantage in both B2C and B2B marketing. A great deal of attention has been focused on the tremendous opportunities digital marketing presents, with little attention on the real challenges companies are facing going digital. In this study, we present these challenges based on results of a survey among a convenience sample of 777 marketing executives around the globe. The results reveal that filling “talent gaps”, adjusting the “organizational design”, and implementing “actionable metrics” are the biggest improvement opportunities for companies across sectors.     

Problematic emotions and maternal grief

The study was an empirical examination of the relation of personality proneness to "problematic social emotions"--envy (Dispositional Envy Scale), jealousy (Interpersonal Jealousy Scale), and shame and guilt (Personal Feelings Questionnaire-2)--to maternal grief (Perinatal Grief Scale-33) following miscarriage, stillbirth, neonatal death, or infant/child death. The 441 women who participated in the study were enrolled from the Website, e-mail contact lists, and parent support groups of an organization that offers information and support to bereaved parents. All four problematic emotions were positively correlated with maternal grief. Envy, jealousy, and guilt made significant unique contributions to the variance in maternal grief. Overall, time lapse since the loss and the four problematic emotion predispositions explained 43% of the variance in maternal grief following child bereavement.