Asking Price and Price Discounts: the Strategy of Selling an Asset under Price Uncertainty

We consider fixed and asking price strategies in the context of selling an asset with Bernoullian updating of the seller’s subjective probability of sale at a given price. The determination of optimal fixed, asking and endogenous reservation prices is discussed under risk-neutrality and expected utility maximisation. With risk-neutrality, the optimal asking price exceeds the optimal fixed price when the expected gain is a strictly concave function. The seller’s choice between the fixed and the asking price strategies depends on several factors: the expected cost of haggling, price competition and the seller’s attitude towards risk

Intergenerational Analysis of Social Interaction

We explore the relationship between the social interaction of parents and their offspring from a theoretical and an empirical perspective. Our theoretical framework establishes possible explanations for the intergenerational transfer of social interaction whereby the social interaction of the parent may influence that of their offspring and vice versa. The empirical evidence, based on four data sets covering Great Britain and the U.S., is supportive of our theoretical priors. We find robust evidence of intergenerational links between the social interaction of parents and their offspring supporting the existence of positive bi-directional intergenerational effects in social interaction.social interaction, intergenerational transfer

Firm corruption in the presence of an auditor

This paper develops a framework to explore firm corruption taking account of interaction with an auditor. The basic idea is that an auditor can provide auditing and other (consultancy) services. The extent of the other services depends on firm profitability. Hence auditor profitability can increase with firm corruption that may provide an incentive to collude in corrupt practices. This basic idea is developed using a game theoretic framework. It is shown that a multiplicity of equilibria exist from stable corruption, through auditor controlled corruption, via multiple equilibria to honesty on behalf of both actors. Following the development of the model various policy options are highlighted that show the difficulty of completely removing corrupt practices.firm corruption, auditor corruption, perfect equilibrium

Intergenerational Analysis of Social Interaction

We explore the relationship between the social interaction of parents and their offspring from a theoretical and an empirical perspective. Our theoretical framework establishes possible explanations for the intergenerational transfer of social interaction whereby the social interaction of the parent may influence that of their offspring and vice versa. The empirical evidence, based on four data sets covering Great Britain and the U.S., is supportive of our theoretical priors. We find robust evidence of intergenerational links between the social interaction of parents and their offspring supporting the existence of positive bi-directional intergenerational effects in social interaction.Social interation, intergenerational transfer

On Modelling the Social Interaction of Couples

In this paper we contribute to the existing microeconomic literature on social interaction, which has generally focused on social interaction from an individual’s perspective. Given that decisions regarding social interaction are often made within the context of a couple or family, we explore the potential interdependence between the social interaction of husbands and wives from both a theoretical and an empirical perspective. We develop a theoretical framework based on an extension of Becker (1974) to include factors which characterise aspects of a couple’s decision-making in relation to social interaction and show that these factors support a tendency towards a positive correlation between the husband’s and wife’s levels of social interaction. Indeed, our empirical findings suggest such a positive association between the social interaction of husbands and wives as measured by active club membership and the frequency of the social interaction activities. In addition, we find that this positive association is particularly pronounced across the same types of club membership or social activities.Couples; Panel Data; Social Interaction

On the Incentives to Increase Input Efficiency under Monopoly Trade Unions

We examine the effects of and the incentives for increasing input efficiency within a spatially segregated  Cournot duopoly with monopoly trade unions whose utility functions depend on both wages and employment. We show that with neoclassical as well as Leontief technology, unions raise wages to appropriate fully the gains from labor-saving technological (or organisational) improvements, leaving the firm with no incentive to invest in increasing the efficiency of workers. However, capital-saving     technological improvement may be profitable depending on the elasticity of substitution. Finally, we examine the implication of a fixed minimum wage (or competitive labor market) in one country

Workplace Performance, Worker Commitment and Loyalty

Using matched employer-employee level data drawn from the 2004 UK Workplace and Employee Relations Survey, we explore the determinants of a measure of worker commitment and loyalty (CLI) and whether CLI influences workplace performance. Factors influencing employee commitment and loyalty include age and gender, whilst workplace level characteristics of importance include human resource practices. With respect to the effects of employee commitment and loyalty upon the workplace, higher CLI is associated with enhanced workplace performance. Our findings that workplace human resources influence CLI suggest that employers may be able to exert some influence over the commitment and loyalty of its workforce, which, in turn, may affect workplace performance.labor productivity, commitment, financial performance, loyalty

Employee trust and workplace performance

We explore the relationship between employee trust of managers and workplace performance. We present a theoretical framework which serves to establish a link between employee trust and firm performance as well as to identify possible mechanisms through which the relationship may operate. We then analyse matched workplace and employee data in order to ascertain whether the average level of employee trust within the workplace influences workplace performance. We exploit the 2004 and 2011 Workplace Employment Relations Surveys (WERS) to analyse the role of average employee trust in influencing workplace performance in both pre- and post-recessionary periods. Our empirical findings support a positive relationship between three measures of workplace performance (financial performance, labour productivity and product or service quality) and average employee trust at both points in time. Moreover, this relationship holds when we jointly model average employee trust and firm performance in an instrumental variable framework in order to take into account the potential endogeneity of employee trust. We then exploit employee level data from the WERS to ascertain how individual level trust of the employee (rather than the average within the workplace) is influenced by measures taken by employers to deal with the recent recession. Our findings suggest that restricting paid overtime and access to training potentially erode employee trust. In addition, we find that job or work reorganisation experienced at either the employee or organisation level is associated with lower employee trust

Network Interconnectivity with Regulation and Competition

A simple theoretical network model is introduced to investigate the problem of network interconnection. Prices, pro ts and welfare are compared under welfare maximisation, network monopoly and network monopoly with competition over one part of the network. Given that inducing actual competition may bring disbene ts such as cost duplication and co-ordination costs, we also explore the possibility of a regulator using the threat of entry on a section of the monopoly network in order to bring about the socially preferred level of interconnectivity. We show that there are feasible parameter values for which such a threat is plausible