Local Interactions as a Decentralized Mechanism Coordinating Equilibrium Expectations

In the context of standard two-period pure-exchange economies with sequential trade, this paper proposes a decentralized coordination mechanism for equilibriumexpectations, facilitated by local interactions between agents. Interactions are modelled stochastically by specifying a family of individual Markov processes on a two-dimensional integer lattice Z2 in continuous time. These processes are interdependent, in that the transition rate of each agent’s expectation also depends on expectations of neighboring agents. The particular specification of transition rates chosen in the present paper is known as the (two-dimensional) Voter Model. The composite process has two extremal invariant measures and a continuum of non-extremal invariant measures. The economic content of the stochastic expectations process is twofold. First, the convergence of the expectations process itself constitutes a “sunspot-device”. While convergence to either one of the extremal invariant measures corresponds to a sunspot-free coordination state, convergence to a convex mixture of invariant measures engenders a sunspot equilibrium. Thus, nonergodicity of the expectations process is related to the occurrence of sunspot equilibria. Second, it explains how coordination of expectations is actually achieved through direct interactions between agents. Any particular coordination state (defined as a limiting measure of the process) can be traced back to a set of initial configurations or more general initial distributions of expectations.Sunspot Equilibria, Voter model, local interactions, coordination

The Explanatory Power of Reciprocal Behavior for the Inter-Organizational Exchange Context

In order to create sustainable competitive advantages, organizations are embedded in dyadic exchange relationships, which depend on the coordination of the behavior of the actors involved. Often, coordinated behavior is explained by trust. Since trust develops in a process of reciprocal responses to presumed trustworthy behavior, it is a reciprocity-based concept. While inter-organizational exchange relationships can appear in different stages (forming, establishing, broken), different reciprocity types (direct, indirect, negative) can be distinguished. The study links reciprocal behavior to different stages of inter-organizational exchange relationships in order to investigate reciprocity as a possible coordination mechanism of behavior and thus explore the basis of coordination of trust-based behavior. Qualitative Comparative Analysis as a set-theoretic approach is applied to analyze the empirical data consisting of 78 qualitative semi-structured interviews with managers of small-, medium- and large-sized companies. The results show that different reciprocity types become effective in different stages of an inter-organizational exchange relationship: For forming inter-organizational exchange relationships indirect reciprocal behavior, besides direct reciprocity, becomes effective while in establishing inter-organizational exchange relationships, direct reciprocal behavior is evident. Negative reciprocal behavior leads to a break up of relationships. Using these results, on the one hand, the concept of trust can be sharpened by deepening the understanding of the trust-building mechanisms and on the other hand, reciprocity can be seen as coordination mechanism in exchange relationships of different stages. In doing so, with this knowledge, relationships can be coordinated towards a long-term orientation in order to create sustainable advantages

New distribution channels in service firms: marketing and organizational consequences.

This paper aims at showing marketing and organizational impacts of the diversification of distribution channels, i.e. interfaces between distributor and consumer, on the service encounter between customers and a service firm in retail banking. Interactions between branches, the outgoing call-centre and the incoming call-centre are scrutinized. Our study highlights four main results : (a) New distribution channels use is linked to customer profile, and lack of customer capacity to participate is a major restraint to customer willingness to participate. (b) New distribution channels favour potential customer opportunism for a limited number of customers. Two forms of opportunism are shown: active and premeditated opportunism versus the incoming call-centre, “spontaneous” or “incident” opportunism when called by the outgoing call-centre. (c) To limit potential opportunism, the bank insists on formal coordination mechanisms: process standardization, qualification standardization, direct supervision. (d) the customer acts as a “perception filter” between the different channels employees. The customer’s actions modify - positively or more generally negatively - the internal perception of branch sales people about their colleagues working in the call centre.opportunism; retail banking sector; distribution channels; multichannel distribution; intra-organizational coordination;

A People's Budget: A Research and Evaluation Report on Participatory Budgeting in New York City

This cycle of Participatory Budgeting in New York City ushered in a significant expansion of the process from previous years, with 24 Council Members -- nearly half the City Council -- taking part. More than six thousand New Yorkers brainstormed ideas for projects to improve their community, and more than 50,000 turned out to vote all across the city, at high schools, senior centers, public housing developments, community centers, in parks and on street corners. Through the PB process, driven by and centered on community members, New Yorkers determined the allocation of more than $30 million of City Council funds to bring to fruition capital projects in their Council districts. This year, for the first time, the process was supported by the City Council Speaker's office, with the dedication of resources and coordinating support, including: contracts issued to enlist community-based organizations in PB outreach; assistance in translation, printing and counting of PB ballots; media outreach and PB promotion; and central coordination of trainings and meetings throughout the process. Participatory budgeting (PB) allows community members -- instead of elected officials alone -- to determine how public funds should be spent, from start to finish. Four years ago, in 2011- 12 a pilot process in four City Council districts brought this unique form of direct democracy to this city. Since then, the process has grown with each PB cycle, with this year's process seeing a six-fold increase in the number of participating Council districts and the amount of money allocated to the process, and more than eight times as many New Yorkers casting PB ballots

The timing and funding of CHAPS sterling payments

Real-time gross settlement (RTGS) systems such as CHAPS Sterling require large amounts of liquidity to support payment activity. To meet their liquidity needs, RTGS participants borrow from the central bank or rely on incoming payments from other participants. Both options can prove costly -- the latter in particular if participants delay outgoing payments until incoming ones arrive. This article presents an empirical analysis of the timing and funding of payments in CHAPS. The authors seek to identify the factors driving the intraday profile of payment activity and the extent to which incoming funds are used as a funding source, a process known as liquidity recycling. They show that the level of liquidity recycling in CHAPS is high and stable throughout the day, and attribute this result to several features of the system. First, the settlement of time-critical payments provides liquidity to the system early in the settlement day; this liquidity can be recycled for the funding of less urgent payments. Second, CHAPS throughput guidelines provide a centralised coordination mechanism, in effect limiting any tendency toward payment delay. Third, the relatively small direct membership of CHAPS facilitates coordination between members, for example, through the use of bilateral net sender limits. Coordination encourages banks to maintain a relatively constant flux of payments throughout the day. The authors also argue that the high level of recycling helps to reduce liquidity risk, and that the relatively smooth intraday distribution of payments serves to mitigate operational risk associated with highly concentrated payment activity. They note, however, that the benefits of liquidity recycling are not evenly distributed between members of CHAPS.Payment systems ; Bank liquidity ; Risk ; Electronic funds transfers

From International Coordination to a Rule-Based Monetary Regime

1\. Introduction 5 2\. Domestic Stability or International Coordination 7 3\. State Preferences and Institution Design 10 3.1 Domestic Factors 10 3.2 International Factors 12 3.3 Method 13 4\. From Non-Coordination to Direct Negotiation 14 4.1 Non-Coordination Period 14 4.2 Direct Negotiation and Country-Specific Recommendation 15 4.3 Coordination and Surveillance 17 4.4 Obstacle of Coordination 18 5\. The EU: From the EMS to the EMU 19 5.1 The Delors Report: Framing the Problem 19 5.2 The EU and Inflation Targeting 20 5.3 The EU as the a Promoter of Central Bank Independence 21 6\. The BIS and the IMF Research Department 22 6.1 The BIS 22 6.2 IMF Research Department 23 7\. The Internationalization of the Norm of Price Stability Targeting 24 7.1 World Economic Outlook: Institutionalization of the Norm of Inflation Targeting 25 8\. Analysis and Conclusion 26 Literature 29 Appendix 34During the 1990s, a consensus consolidated among policy makers and economists worldwide regarding the desirability of very low inflation targeting. So far, this process has been explained on the basis of a domestic-functional thesis, according to which commitment to very low inflation provides local economic gains with no costs. In this paper, I present an alternative explanation, according to which the global norm of very low inflation targeting was consolidated as a political solution to the problem of exchange rate misalignment and volatility. I argue that policy makers in Germany and the US believed that convergence of monetary policies and inflation rates, in addition to liberalization of financial markets, will stabilize exchange rates without the need for direct coordination. The paper employs the theory of liberal intergovernmentalism as a benchmark to explain the choice of the European and the G-5/7 countries to establish a low-inflation rule-based international monetary regime. The paper concludes that the regime of very low inflation targeting was consolidated as a politically viable solution to a political problem rather than as an economic best practice. Furthermore, it concludes that the norm of very low inflation targeting was a “corer solution” that neglected the problem of exchange rate stability

Co-ordination of enterprise skill formation: a sociological and historical narrative of professional, market and state initiatives in South Africa

This thesis analyses the sociological and historical genesis of enterprise skill formation in South Africa and its effective coordination. South Africa’s late nineteenth century development as an emerging economy contributed to the state often taking the lead and being at the forefront of efforts to ensure coordination in enterprise skill formation. But gradually, concerns shaped by issues related to labour supply motivated leaders in firms and enterprises to forge their own imprint on the coordination of enterprise skill formation. The thesis also shows how these concerns with the coordination of enterprise skill formation involved intellectuals and professionals who attempted to intervene on these matters. The thesis proceeds to elaborate the unique institutional architecture which was constructed at various junctures in the history of South Africa’s human resource and skill formation journey. Furthermore the thesis gives an insight into the coordination of enterprise skill formation which occurred in the period of apartheid induced reforms. The evidence however shows that even when regimes change and new political orders are established, it does not end the necessity for continuity in the coordination of enterprise skill formation. As is to be expected, the institutional, regulatory and instrumental content of the coordination of enterprise skill formation is more complex in the contemporary period (circa. 2017) than it was in the 1920s and 1930s. However, the goal striven toward then was for a more streamlined process which could contribute to a change and improvement in the existing practice of enterprise skill formation. Evidence shows that this has been ongoing for over a century. The thesis gives an intricate and detailed insight into the process of building a new coordinated skills development system that was intended to ensure the coordination of enterprise skill formation under a democratic post-apartheid political dispensation. In this period a levy-grant system underwritten by a national skills levy has been a central instrument of direct coordination into enterprise skill formation. The analysis that is provided traces the iterative steps that were treaded by policy makers and policy thinkers from at least the early 1920s as they confronted what may have appeared as an elusive enterprise skill formation process. This analysis is done with a great deal more depth for the period since the early 1990s