Hedging and accounting-based RPE contracts for powerful CEOs

Several firms prohibit their CEOs from trading in the stock of peer firms. This is puzzling since hedging by the CEO through private trading in the capital market can reduce the CEO’s exposure to systematic compensation risk. When the CEO’s incentive contract comprises relative performance evaluation, we find that the firm might want to disallow private hedging even though there are no technological interdependencies or strategic interactions to peer firms. In the analysis, we highlight two frequently observed characteristics of incentive contracts. First, the use of accounting benchmarks is widespread in compensation contracts for CEOs. Second, empirical and anecdotal evidence suggests that powerful CEOs have influence on the process of designing their own compensation. We find that in the presence of a powerful CEO, the firm can benefit from disallowing private hedging. In particular, the firm’s decision to allow or to disallow private hedging depends on the characteristics of the accounting benchmarks and the characteristics of the peer firms.     

Process matters—The relevance of the decision making process for divestiture outcomes

We apply strategic decision making and organizational change theory to corporate divestitures and argue that key characteristics of the divestiture decision making process can contribute to explaining the variation in divestiture outcomes. We test our hypotheses in an empirical multi-source quantitative study and find evidence that analytical comprehensiveness in the evaluation of divestiture effects on the corporate portfolio has a positive impact on the effectiveness of divestiture choices, but analytical comprehensiveness at the focal business unit (BU) level does not enhance decision effectiveness. Our results further indicate that involvement of the affected BU management has a varying impact during the decision making process, with negative effects during the early phase and positive effects in the later phase.     

Physical activity assessment and health outcomes in old age: how valid are dose–response relationships in epidemiologic studies?

In this systematic review the validity of the dose–response relationships between physical activity (PA) and energy expenditure (EE) on defined health outcomes (cardio- and cerebrovascular morbidity and mortality, cancer) for the elderly is questioned. Medline, Cochrane, and EMBASE databases were reviewed for epidemiological longitudinal studies in populations aged 60+ for the years 1985–2007. Although most of the 18 identified studies generally demonstrated an inverse dose–response relationship between PA and EE level with morbidity and mortality, the range of dose–responses was remarkably broad. The nature of the dose–response relationship remained unclear. PA questionnaires - even those constructed for the elderly - do not cover the extremely diverse aspects of age-specific PA behavior and modes of muscular activity. Only non-age-specific tables had been used to estimate the EE in the elderly. Direct measurements of EE were limited. The results have implications for the interpretation of the dose–response relationships between PA and EE on defined health outcomes in old age.     

Some comments on Latin squares and on Graeco-Latin squares,illustrated with postage stamps and old playing cards

We present some comments on Latin squares and on Graeco-Latin squares, with special emphasis on their use in statistics and in a historical context. We also comment on the Knut Vik square, the knight’s move design and the knight’s tour, as well as the Magic Card Puzzle. We consider the well-known 36 officers problem studied by Euler (Verhandelingen uitgegeven door het zeeuwsch Genootschap der Wetenschappen te Vlissingen, vol. 9 (Middleburg 1782), pp. 85–239, 1779/1782), and give two examples of diagonal Latin squares of order 6 due, respectively, to Abbé François-Guillaume Poignard (Chez Guillaume Fricx, Imprimeur &; libraire ruë Bergestract, à l’enseigne des quatre Evangelistes, Bruxelles [4] 79 pp. (p. 71 folded), 1704) and József Dénes (J Lond Math Soc Ser 2, 6(4):679–689, 1970). We illustrate our comments with images of postage stamps and old playing cards. An extensive annotated bibliography ends the paper.     

Norwegian cohort emigration

This paper introduces a counterfactual technique to estimate net emigration from Norwegian birth cohorts from 1846 to 1900. A main finding is that despite strong fluctuations in annual emigration, the percentage reduction of each cohort due to emigration was surprisingly stable for all cohorts from 1846 to 1886, with net emigration of about 30% for males and about 20% for females. Estimating an econometric model of annual male gross emigration by single years of age 15–60 in the period 1870–1914, we find that previous net emigration from a cohort reduces later gross emigration from the same cohort. The estimations also give some justification for attributing this to selectivity of emigration, in the sense that only a certain proportion of each cohort were potential migrants. Received: 1 October 1997/Accepted: 23 March 2000     

On voters’ attitudes towards unemployment insurance subsidies across regions: a Canadian simulation

The Canadian unemployment insurance program is designed to reflect the varying risk of joblessness across regions. Regions that are considered low-risk areas subsidize higher-risk ones. A region’s risk is typically proxied by its relative unemployment rate. We use a dynamic, heterogeneous-agent model calibrated to Canada to analyze voters’ preferences between a uniformly generous unemployment insurance and the current system with asymmetric generosity. We find that Canada’s unusual unemployment insurance system is surprisingly close to what voters would choose in spite of the possibilities of shirking and self-insurance through asset buildup.

The co-evolution of gossip and friendship in workplace social networks

This study investigates the co-evolution of friendship and gossip in organizations. Two contradicting perspectives are tested. The social capital perspective predicts that friendship causes gossip between employees, defined as informal evaluative talking about absent colleagues. The evolutionary perspective reverses this causality claiming that gossiping facilitates friendship. The data comprises of three observations of a complete organizational network, allowing longitudinal social network analyses. Gossip and friendship are modeled as both explanatory and outcome networks with RSiena. Results support the evolutionary perspective in that gossip between two individuals increases the likelihood of their future friendship formation. However, individuals with disproportionately high gossip activity have fewer friends in the network, suggesting that the use of gossiping to attract friends has a limit.     

Actor-based analysis of peer influence in A Stop Smoking In Schools Trial (ASSIST)

As shown by the success of network intervention studies that exploit the occurrence of peer influence in their target group, the reliable assessment of peer influence processes can be important for informing public health policy and practice. A recently developed tool for assessing peer influence in longitudinal social network data is stochastic actor-based modeling. The body of the literature in which this method is applied is growing, but how reliable are the results? In this paper, we identify two shortcomings in this literature: the questionable assumption of temporal homogeneity, and the potential dependence of results on the inclusion of nuisance parameters in the model specification. These issues are resolved by analyzing the data of three schools selected from ASSIST, a large UK-based trial of a school-based smoking prevention intervention. Results show that the co-evolution of friendship and smoking is a time heterogeneous process, and that results are sensitive to specification details. However, the peer influence parameter is not affected by either, but emerges as surprisingly stable over time and robust to model variation. This establishes confidence in the method and encourages detailed future investigations of peer influence in ASSIST.     

Kontaktgenerierung auf StudiVZ: Wie über Social Networking Platforms alte Freundschaften gepflegt und neue geschlossen werden

Virtual communication continuously gains importance in modern society, as the growing success of “social networking platforms”(SNPs) like Facebook, XING or StudiVZ indicates. In this article we compare such platforms in regard to their instrumental vs. expressive orientation. It is supposed, that amore expressive orientation of a platform like Facebook or StudiVZ is not only functional to manage contacts to friends already known outside the internet (“social searching”), like studies on user's reports on their own motivations have recently shown for Facebook, but also helps generating new contacts to people not already known before (“social browsing”). This more implicit function might be promoted by the trust-promising visuability of a person's network contacts, especially in the face of strangers. An online survey on StudiVZ with n = 1316 randomized participants confirms both hypotheses.