Editorial: Beyond embodied cognition: Intentionality, affordance, and environmental adaptation

The paper describes the contents of the contributions contained in the special topi

Employees high in personal intelligence differ in workplace perceptions and behavior from their colleagues

Personal intelligence (PI) involves the ability to recognize, reason, and use information about personality to understand oneself and other people. Employees in two studies (Ns = 394, 482) completed the Test of Personal Intelligence (TOPI; e.g., Mayer, Panter, & Caruso, 2017a) and assessments of workplace perception and behavior. Higher PI was associated with higher perceived workplace support and lower counterproductive work behavior. These relationships continued to hold after controlling for other key variables. The results indicate the TOPI, although still in research trials, shows promise as a screening device for selecting employees and targeting individuals for training

Analogy-based Expectations and the Partially Cursed Equilibrium

Recent literature has questioned the existence of a learning foundation for the partially cursed equilibrium. This paper closes the gap by showing that a partially cursed equilibrium corresponds to a particular analogy-based expectation equilibrium.Analogy Expectations; Bounded Rationality; Curse; Learning

Bank runs, liquidity and credit risk

In this paper, I develop a model that addresses the links between banks’ liquidity outlook and their incentives to take credit risk. Assuming that both bank-specific liquidity shocks and credit losses are necessary to provoke bank runs, the model predicts that a bank’s incentives to mitigate its credit risk by screening decrease if the probability of a bank-specific liquidity shock declines. This suggests that the benign liquidity outlook prevailing prior to the subprime crisis may have contributed to the lack of screening by banks that has been an important causal factor in the crisis.liquidity; credit risk screening; bank runs

Contracts and Promises - An Approach to Pre-play Agreements

In line with the widely applied principle of just deserts, we assume that the severity of the penalty on a contract offender increases in the harm on the other. When this principle holds, the influence of the efficiency of the agreement on the incentives to abide by it crucially depends on whether actions are strategic complements or substitutes. With strategic substitutes, there is a conflict between Pareto-efficiency and the incentives to abide. The opposite tends to be true when actions are strategic complements. The results are interpreted in the context of legal contracts and in that of informal mutual promises.partnerships; contracts; pre-play communication; legal enforcement; social norms; guilt

Moral Hazard and Clear Conscience

The paper studies theoretically how the optimal contract in the hidden-action moral hazard model is affected when an agent feels bad when not reaching a target effort set in the contract. While the presence of guilt brings the outcome closer to first-best, an effort target is not costless for the principal. In equilibrium, the agent’s effort falls short of the target, inducing guilt which must be compensated by a higher financial reward. Thus, although the principal’s payoff is higher, the agent receives a part of the monetary rents accruing to intrinsic motivation. This result differs markedly from previous contributions on contracting under social preference or pro-social motivation.Moral Hazard; Norms; Agency; Social Preferences; Guilt; Work Ethic

On Path Integral Localization and the Laplacian

We introduce a new localization principle which is a generalized canonical transformation. It unifies BRST localization, the non-abelian localization principle and a special case of the conformal Duistermaat-Heckman integration formula of Paniak, Semenoff and Szabo. The heat kernel on compact Lie groups is localized in two ways. First using a non-abelian generalization of the derivative expansion localization of Palo and Niemi and secondly using the BRST localization principle and a configuration space path integral. In addition we present some new formulas on homogeneous spaces which might be useful in a possible localization of Selberg's trace formula on locally homogeneous spaces.Comment: 30 pages LaTeX, 1 figure; published versio