PROGRESS IN OPERATIONS MANAGEMENT

In this issue, Robert Hayes has written provocatively about the implications of the digital economy for Operations Management (om). Here I examine and illustrate a simple four‐stage framework for thinking about these implications: advances in digital technology (stage 1) lead to business developments (stage 2), which impact the views of OM‐relevant thought leaders (stage 3), which influence the conduct of OM activities (stage 4). This framework provides a perspective for viewing the evolution of OM and indicates how educators, researchers, and practitioners can steal the march on mainstream thinking.     

THE IMPACT OF PSYCHOLOGICAL AND HUMAN CAPITAL ON WAGES

Historically, economists have taken the position that psychological capital is either unobservable or immeasurable; thus, heretofore, little evidence has been available on the contribution of psychological capital to wages. Using data drawn from two different waves of the National Longitudinal Survey of Youth, we offer evidence that psychological capital has both a direct effect—via self-esteem—and an indirect effect—through locus of control—on an individual's real wage. We find a person s wage is more sensitive to changes in self-esteem than to comparable alterations in human capital. Both relative wages and human capital contribute to self-esteem.     

Rationality and the Shoulds

This paper is about rational and irrational uses of deontological words, such as “should”, “ought”, and “must”, referred to as “the shoulds”. Rationality is taken as a mutual relationship between conceptual schemes and human agency. These are expressed in what Bakhtin referred to as authoritative discourse and internally persuasive discourse respectively. When the conceptual scheme is in place and its authority transparent, and there is interplay between authoritative discourse and internally persuasive discourse, then the shoulds are perceived as rational. When the interplay is disrupted or suppressed the shoulds are seen as irrational. Breakdown occurs in two main ways. First, when the effective conceptual schemes are hidden, and the origin of the shoulds obscured. We describe some instances of the latter, from philosophy, psychotherapy, and experimental studies of rationality. Second, in technology and science the mutual relationship sometimes breaks down because authoritative discourse is too powerful, and inhibits the interplay in order to maintain itself. After describing these pathologies, we turn to William James, who drew attention to a repair kit for rationality in his detection of the psychologist's fallacy. Describing the work of Dewey and Husserl as elaborations of this, we distinguished two essential aspects of rationality, disciplinary expressed in authoritative discourse, and emancipatory expressed in internally persuasive discourse.     

WAR OF ATTRITION: EVIDENCE FROM A LABORATORY EXPERIMENT ON MARKET EXIT

We report an experiment designed to study whether inefficient firms are systematically driven from overcrowded markets. Our data set includes a series of 3,800 wars of attrition of a type modeled by Fudenberg and Tirole in 1986. We find that exit tends to be efficient and exit times conform surprisingly well to point predictions of the model. Moreover, subjects respond similarly to implementations framed in terms of losses as they do to those framed in terms of gains. (JEL D21, L11, C92)     

STEROIDS AND HOME RUNS

There has been no change in Major League Baseball home run hitting for 45 yr, in spite of the new records. Players hit with no more power now than before. Records are the result of chance variations in at bats, home runs per hit, and other factors. The clustering of records is implied by the intermittency of the law of home runs. Home runs follow a stable Paretian distribution with infinite variance. The shape and scale of the distribution have not changed over the years. The greatest home run hitters are as rare as great scientists, artists, or composers. (JEL A10, C02, C16, C52, L51)     

COMPARING CITIZEN AND ELITE BELIEF SYSTEMS IN POST-SOVIET RUSSIA AND UKRAINE

No previous research has systematically compared the policypreferences and attitudinal constraint of elites and ordinarycitizens in societies undergoing a fundamental change in theform of the government and the economic system. This articleutilizes directly comparable survey questions asked of a representativesample of citizens and their parliamentary representatives intwo post-Soviet countries, Russia and Ukraine, to determinethe degree of similarity that existed in the attitudinal preferencesand ideological consistency of these two sets of political actors6 months after the collapse of the Soviet Union. The level ofattitude consistency and ideological thinking among ordinarycitizens was found to be unexpectedly high, thereby reflectingthe degree of politicization occurring during the period immediatelypreceding the Soviet disintegration. Relative to other studiesof elites, however, the attitude constraint among the eliteswas unexpectedly low. This unexpected finding is explained bythe absence of various institutions and arrangements that promoteconsistent attitudes among elites in western democracies, suchas functioning political parties, lobby groups, and an investigatorymedia.     

TAX RATES AND LABOR SUPPLY IN FISCAL EQUILIBRIUM

A central tenet of supply-side economics is that a balanced-budget reduction in the marginal tax rate on wage income increases aggregate labor supply. In contrast, the orthodox Keynesian analysis concludes that the relationship between tax rates and the economy-wide supply of labor is theoretically ambiguous. Our analysis of a general model reveals that these two propositions are associated, respectively, with the special assumptions of "compensated independence" and "ordinary independence" between leisure and public spending.     

A LONGITUDINAL STUDY OF THE EFFECT OF A SERVICE GUARANTEE ON SERVICE QUALITY

This paper develops a theoretical framework that relates a service guarantee to service quality. The framework hypothesizes that a service guarantee can positively affect service quality through its positive effect on both learning through service failure and employee motivation and vision. A longitudinal, empirical study was conducted to test these hypotheses. Surprisingly, the service guarantee was not found to have a direct effect on learning through service failure. However, the service guarantee clearly had a positive effect on service quality primarily through its positive effect on employee motivation and vision. The research strongly supports using a service guarantee to improve service quality.