Get more for less? Experimental evidence on repeated decision making under non-monotone incentives

Summary  This paper presents experimental results of a benchmark study to analyze the incentive effects of non-monotone pay schemes. An incentive compatible contract that does not award the highest pay to the highest possible output combination was tested in a neutral, framing, and two framing-with-principal settings, respectively. The results confirm the model in a statistically significant way. Principals select the non-monotone contract over a monotone contract that would give them ex ante a lower expected surplus. Agents predominantly select the income-maximizing strategy, i.e. select the effort level that should be implemented by the contract. Given the widespread view that non-monotone output-contingent incentives are not plausible labor contracts, it seems worthwile to extend the experimental study to include aspects which are common in labor relations, such as an option to quit for the employee and repeated interaction between employer and employee. This would help answer the question whether theoretically optimal non-monotone contracts may be used as labor contracts. The author acknowledges insightful comments by Jeannette Brosig, Alexis Kunz, Thomas Riechmann, Dirk Sliwka, Joachim Weimann and two anonymous referees. Financial support by MaxLab is gratefully acknowledged. Any remaining errors are my own.     

The Length of Working Life in Spain: Levels,Recent Trends,and the Impact of the Financial Crisis

While there has been considerable debate about extending the length of working life, relatively little is known about this issue. We use data from the Spanish Continuous Working Life Sample for 2004–2013 to calculate period working life tables, which in turn allows us to assess the impact of the financial crisis on working life expectancy in Spain. Before the recession hit, working life expectancy in Spain was around 38 years for males and 33 years for females. The recession had a tremendous impact on the Spanish labor market, but the effects differed considerably by gender and occupational category. Men working in skilled non-manual jobs were less affected, while men working in unskilled manual jobs lost close to 14 years of working life expectancy. Women were less affected than men. With working life expectancy decreasing, the average proportion of lifetime spent in unemployment and outside the labor market increased markedly, whereas the average number of years spent in retirement changed only a little. When we decompose losses in working life expectancy by age group, we find that economic fluctuations affect both older and younger workers. This result suggests that policies that focus on retirement ages only are incomplete. We also compare our findings to the results obtained by Sullivans method, which is based on prevalence rates rather than the incidence-based working life table approach. We find that the use of Sullivans approach does not accurately reflect the levels of and the trends in working life expectancy.     

Parents' Attitudes and Knowledge Regarding Gambling Among Youths

This study evaluates attitudes and knowledge of parents regarding gambling behaviors among youths, aged 5 to 17 years. Telephone interviews were conducted among 279 randomly selected parents (32% fathers and 68% mothers) in the Quebec City region. Results indicate that parents overestimate the age of children's first wagers and underestimate the probability that their own child has already gambled. Most parents (86%) believe that the availability of gambling for youths should be reduced and that schools should include prevention programs concerning problem gambling. Results also show that parents fail to associate excessive gambling with poor grades or with alcohol and drug use. Finally, 84% of the parents reported that they would accept buying lottery tickets for their child. These results suggest that prevention programs for excessive gambling among children should include information for parents.     

Intrinsic losses

Since the choice of a particular loss function strongly influences the resulting inference, it seems necessary to rely on intrinsic losses when no information is available about the utility function of the decision-maker, rather than to call for classical losses like the squared error loss. Since this setting is quite similar to the derivation of noninformative priors in Bayesian analysis, we first recall the conditions of this derivation and deduce from these conditions some requirements on the intrinsic losses. It then appears that these loss functions should only depend on the sampling distribution and that they should be independent of the parameterization of the distribution. The resulting estimators are therefore transformation equivariant. We study the properties of two natural intrinsic losses, namely entropy and Hellinger losses, and show that they can be expressed in closed form for exponential families. Moreover, the entropy loss also provides analytic expressions of Bayes estimators under conjugate priors; the derivation of Bayes estimators associated with the Hellinger loss is more cumbersome, as shown in Poisson and Gamma cases, while leading to similar estimators.     

Designing a long range marketing strategy for services

The purpose of the article is to develop a frame of reference for long range marketing strategy, labelled the Three Stage Model which could benefiti the attempts of service firms and institutions to successfully introduce marketing and eventually achieve marketing-orientated operations. The author stresses some organizational aspects especially concerning the use of traditional marketing departments for handling an organization's marketing function. The views on service marketing are supported by a substantial amount of empirical evidence from the industrial and the consumer service sector. The frame of reference and the organizational views of the marketing of services will be equally valid for industrial marketing of services and for marketing consumer services.     

通过顾客关系服务化来强化顾客价值过程--顾客关系时代的营销新命题

本文建立在这样一个全新的观念基础之上,即营销资源和活动必须与企业所面临的目标顾客相互一致,同时,顾客价值不是由制造商或服务提供者创造的,而是由顾客在其价值创造过程中创造的.企业的资源、流程和能力并不是企业的生产(如产品)、管理(如网站)、财务(如结算)、法律(如顾客申述的处理)及其它活动过程的结果,而应当被视为顾客价值创造过程的投入要素.因此,供应商的作用是通过向顾客提供恰当的资源要素,如产品、服务、信息、服务补救、个性化关怀等来支持顾客价值创造过程,并与顾客资源形成互动,惟此,顾客才会感知到价值被创造出来.要以此方式运营,企业必须将自己看作是服务企业,而且真正地为顾客服务.为强化顾客价值的生成,企业必须将其客户关系中的所有要素"服务化"(Servicizing),无论是与制造或服务相关的,还是管理、财务或者法律等常规活动.这些常规活动通常属于"隐性服务"(HiddenService),它们在价值创造中的潜力没有得到应有重视.相反,这些要素对顾客价值的生成过程常常起到破坏而不是支撑作用."服务化"意味着要将所有与顾客关系相关的要素,不管它们的类型和特性如何,转化为顾客价值创造过程中的投入要素.最后,本文还探讨了在顾客关系管理时代,如何配置企业营销资源及营销规划等问题.     

State neutrality and Islamic headscarf laws in France and Germany

Neutrality has been the classic answer of the liberal state to religious and cultural difference. A number of multicultural critics recently debunked it as “myth” and group power in disguise. Comparing Islamic headscarf laws in France and Germany, I argue that neutrality is more complex and multifaceted than this. The comparison shows that neutrality leaves space for particularistic and universalistic, unity- and rights-oriented stances, the first located in the sphere of democratic politics, the second in the legal–constitutional sphere. Recent headscarf laws may then be understood as political backlash against the rights-oriented neutrality that has emerged in the legal spheres of both countries.

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A Virginia Tech MFT ethics class reflects on the shootings at Virginia Tech

The authors of this article include the professor and most of the students in a doctoral course on marriage and family therapy ethical and professional issues that met the semester that a disturbed student shot and killed 32 Virginia Tech students and faculty before killing himself. In this article, we reflect through short essays on issues related to the tragedy, ethics, and recovery.     

Entlassungen: Gerechtigkeitsempfinden und Folgewirkungen.

Zusammenfassung:  Entlassungen sind zu einer allt?glichen Erfahrung vieler Menschen geworden. In diesem Beitrag wird die Frage untersucht: Unter welchen Bedingungen werden Entlassungen als gerecht wahrgenommen und inwieweit rufen sie innerbetriebliche Widerst?nde hervor? Die Untersuchung stützt sich auf eine Befragung von mehr als 3 000 Personen im Alter zwischen 20 und 60 Jahren in Ost- und Westdeutschland. Die Ergebnisse zeigen: Entlassungen werden nicht als selbstverst?ndlich akzeptiert. Darauf weisen die Bewertungen hypothetischer Szenarien und eigener Erfahrungen hin. Durch die Prozessgestaltung kann jedoch die Wahrnehmung der Ma?nahmen positiv oder negativ beeinflusst werden.

TURBULENCE AND UNEMPLOYMENT IN A JOB MATCHING MODEL

According to Ljungqvist and Sargent (1998), high European unemployment since the 1980s can be explained by a rise in economic turbulence, leading to greater numbers of unemployed workers with obsolete skills. These workers refuse new jobs due to high unemployment benefits. In this paper we reassess the turbulence‐unemployment relationship using a matching model with endogenous job destruction. In our model, higher turbulence reduces the incentives of employed workers to leave their jobs. If turbulence has only a tiny effect on the skills of workers experiencing endogenous separation, then the results of Ljungqvist and Sargent (1998, 2004) are reversed, and higher turbulence leads to a reduction in unemployment. Thus, changes in turbulence cannot provide an explanation for European unemployment that reconciles the incentives of both unemployed and employed workers. (JEL: E24, J64)