Uncertainty behind the veil of ignorance

This paper argues that the decision problem in the original position should be characterized as a decision problem under uncertainty even when it is assumed that the denizens of the original position know that they have an equal chance of ending up in any given individual's place. It argues for this claim by arguing that (a) the continuity axiom of decision theory does not hold between all of the outcomes the denizens of the original position face and that (b) neither us nor the denizens of the original position can know the exact point where discontinuity sets in, because the language we employ in comparing different outcomes is ineradicably vague. It is also argued that the account underlying (b) can help proponents of superiority in value theory defend their view against arguments offered by Norcross and Griffin

Belief heterogeneity and survival in incomplete markets

In complete markets economies (Sandroni [16]), or in economies with Pareto optimal outcomes (Blume and Easley [10]), the market selection hypothesis holds, as long as traders have identical discount factors. Traders who survive must have beliefs that merge with the truth. We show that in incomplete markets, regardless of traders’ discount factors, the market selects for a range of beliefs, at least some of which do not merge with the truth. We also show that impatient traders with incorrect beliefs can survive and that these incorrect beliefs impact prices. These beliefs may be chosen so that they are far from the truth

Model of macroeconomic evolution in stable regionally dependent economic fields

We develop a model for the evolution of economic entities within a geographical type of framework. On a square symmetry lattice made of three (economic) regions, firms, described by a scalar fitness, are allowed to move, adapt, merge or create spin-offs under predetermined rules, in a space and time dependent economic environment. We only consider here one timely variation of the ''external economic field condition''. For the firm fitness evolution we take into account a constraint such that the disappearance of a firm modifies the fitness of nearest neighboring ones, as in Bak-Sneppen population fitness evolution model. The concentration of firms, the averaged fitness, the regional distribution of firms, and fitness for different time moments, the number of collapsed, merged and new firms as a function of time have been recorded and are discussed. Also the asymptotic values of the number of firms present in the three regions together with their average fitness, as well as the number of respective births and collapses in the three regions are examined. It appears that a sort of $critical$ selection pressure exists. A power law dependence, signature of self-critical organization is seen in the birth and collapse asymptotic values for a high selection pressure only. A lack of self-organization is also seen at region borders.Comment: 11 figures double columns on 7 page

Employee Stock Ownership and Financial Performance in European Countries: The Moderating Effects of Uncertainty Avoidance and Social Trust

This study investigates how the effect of employee stock ownership on financial performance may hinge on the diverse cultural and societal contexts of European countries. Based on agency and national culture theories, we hypothesize that the positive relationship between employee stock ownership and return on assets (ROA) is stronger in those nations with lower uncertainty avoidance and higher social trust. Using a multisource, time‐lagged, large‐scale dataset of 1,741 firms from 21 countries in Europe, our multilevel, random coefficient modeling analysis found evidence for these hypotheses, suggesting that uncertainty avoidance and social trust serve as important contextual cues in predicting the linkage between employee stock ownership and financial performance. Our supplemental analysis with distinction between the managerial and nonmanagerial employee stock ownership further indicates managerial employee stock ownership has a direct positive effect on ROA. Although nonmanagerial employee stock ownership had a nonsignificant association with ROA, the relationship was positive and significant when uncertainty avoidance was low and social trust was high. This research contributes to the existing literature by illuminating some of the contextual influences altering the effectiveness of employee stock ownership. Our findings also offer practical suggestions for effectively using employee stock ownership

论一种度量通货膨胀的正确方法

劳工统计局的消费价格指数（CPI）和商务部的国民生产总值折算指数是两种常被引用而且是有报道价值的价格指数。这两种指数已经变成经济信息的重要部份而且常常被认为是经济学家所称的“价格水平”的操作对应物。因此，它们经常被用来作为作通货膨胀的测度，而且经常是货币政策与财政政策的目标或指标。不过，这些价格指数（它们代表对当期消费服务与当期产出价格的测度）就其通常被赋予的作用从理论上说是不适当的。本文的分析是以基于费雪传统的正确定义的跨期消费的价格指数为基础的，得出的结论为用于测度通货膨胀的价格指数必须包含资产价格。对给定效用水平的名义货币成本的变化的正确测度是财富价格指数。如果货币冲击通过对服务流动和资产产生短暂的相对价格变化（如产生实际利率的短期变化）传导至经济实际部门，那么，通常所使用的、不完整的现行流动价格指数会提供“货币购买力”变动的有偏短期测度。主导一般文献和专业文献和分析的不适当的价格指数使货币理论研究与政策得出有显著误差的结果。 　　译者单位：厦门大学经济学院金融学系（361005

Shareholder Theory/Shareholder Value

Shareholder theory states that the primary objective of management is to maximize shareholder value. This objective ranks in front of the interests of other corporate stakeholders, such as employees, suppliers, customers, and society.Shareholder theory argues that shareholders are the ultimate owners of a corporate’s assets, and thus, the priority for managers and boards is to protect and grow these assets for the benefit of shareholders. Shareholder theory assumes that shareholders value corporate assets with two measurable metrics, dividends and share price. There-fore, management should make decisions that maximize the combined value of dividends and share price increases. However, shareholder theory fails to consider that shareholders and corporates may have other objectives that are not based on financial performance. For example, as early as1932, Berle and Means argued that corporations have a variety of purposes and interests including encouraging entrepreneurship, innovation, and building communities. This wider view is gaining more traction in recent decades as evidenced by an increased interest in ethical investment funds.This suggests that shareholders and potential shareholders are not only interested in financial gains but are also interested in corporates being socially responsible (Kyriakou2018). Therefore shareholder value creation is important; however,it needs to be balanced with other stakeholders’ interests. This is referred to as an enlightened approach to shareholder value maximization