Signaling about norms: socialization under strategic uncertainty

We consider a signaling model where adults possess information about the dominant social norm. Children want to conform to whatever norm is dominant but, lacking accurate information, take the observed behavior of their parent as representative. We show that this causes a signaling distortion in adult behavior, even in the absence of conflicts of interest. Parents adopt attitudes that encourage their children to behave in a socially safe way, i.e. the way that would be optimal under maximum uncertainty about the prevailing social norm. We discuss applications to sexual attitudes, collective reputation, and trust

Self-fulfilling regression and statistical discrimination

This paper provides a simple model which explains that statistical discrimination can arise in a purely self‐fulfilling manner. The story is as follows. (i) At the point of hiring, employers cannot observe workers’ productivities but can observe only their signals, such as test scores, and under perfect competition they pay for expected labor productivity conditional on signal observation, based on their belief about return to signal. (ii) Given the employers’ belief, workers choose an effort level, which affects the joint probability distribution over productivity–signal pairs. (iii) In equilibrium, the employers’ belief proves to be statistically consistent. We show that there may be multiple equilibria, and that equilibrium selection has nothing to do with economic fundamentals

Why Are There So Few Female Leaders in Higher Education: A Case of Structure or Agency?

A significant gender imbalance remains at executive management level within higher education despite a number of initiatives to increase the number of women in the leadership pipeline and ensure they are better prepared for these roles. This article presents findings from a recent study on the appointment of deputy and pro vice chancellors in pre-1992 English universities that provide fresh insights into why this might be the case. These findings challenge the notion of women’s missing agency - characterised by a lack of confidence or ambition and a tendency to opt out of applying for the top jobs - as an explanation for their continued under-representation. Rather, they highlight the importance of three structural factors associated with the selection process: mobility and external career capital, conservatism, and homosociability. An approach of ‘fixing’ the women is therefore unlikely to be sufficient in redressing the current gender imbalance within university executive management teams

Kinship, Incentives and Evolution

We analyze how family ties affect incentives, with focus on the strategic interaction between two mutually altruistic siblings. The siblings exert effort to produce output under uncertainty, and they may transfer output to each other. With equally altruistic siblings, their equilibrium effort is non-monotonic in the common degree of altruism, and it depends on the harshness of the environment. We define a notion of local evolutionary stability of degrees of sibling altruism, and show that this degree is lower than the kinship-relatedness factor. Numerical simulations show how family ties vary with the environment, and how this a¤ects economic outcomes

Computing welfare losses from data under imperfect competition with heterogeneous goods

We study the percentage of welfare losses (PWL) yielded by imperfect competition under product differentiation. When demand is linear, if prices, outputs, costs and the number of firms can be observed, PWL is arbitrary in both Cournot and Bertrand equilibria. If in addition, the elasticity of demand (resp. cross elasticity of demand) is known, we can calculate PWL in Cournot (resp. Bertrand) equilibrium. When demand is isoelastic and there are many firms, PWL can be computed from prices, outputs, costs and the number of .rms. In all these cases we find that price-marginal cost margins and demand elasticities may influence PWL in a counterintuitive way. We also provide conditions under which PWL increases or decreases with concentration

Tacit collusion, firm asymmetries and numbers:evidence from EC merger cases

The purpose of this paper is to identify empirically the implicit structural model, especially the roles of size asymmetries and concentration, used by the European Commission to identify mergers with coordinated effects (i.e. collective dominance). Apart from its obvious policy-relevance, the paper is designed to shed empirical light on the conditions under which tacit collusion is most likely. We construct a database relating to 62 candidate mergers and find that, in the eyes of the Commission, tacit collusion in this context virtually never involves more than two firms and requires close symmetry in the market shares of the two firms