A desire for deviance: The influence of leader normativeness and inter-group competition on group member support


Journal of Experimental Social Psychology

janvier 2015, vol. 56, pp.36-49

Départements : Management et Ressources Humaines, GREGHEC (CNRS)

Mots clés : Deviance; Leadership; Inter-group competition; Social identity

A Note on 'Sourcing Decisions with Stochastic Supplier Reliability and Stochastic Demand'


Production and Operations Management

octobre 2015, vol. 24, n°10, pp.1636-1639

Départements : Informations Systems and Operations Management, GREGHEC (CNRS)

Mots clés : Sourcing, Supplier selection, Random yield

This note complements the study of Burke, Carillo, and Vakharia (2009 hereafter “BCV”) which analyzes a class of single-product multisourcing problems under stochastic demand and random yields. The purpose is twofold. First, we prove that the objective function used by these authors is only a lower bound for the expected profit for which we provide the correct expression. Second, we show on some of the numerical instances provided in BCV's study that the structure and the performance of the BCV ordering policy may be substantially different from the optimal ordering policy. We conclude by giving general qualitative insights characterizing suboptimality of the BCV solution

A world of models: review of Mary S. Morgan, The world in the model: how economists work and think (book review)


Journal of Economic Methodology

2015, vol. 22, n°2, pp.235-240

Départements : Economie et Sciences de la décision, GREGHEC (CNRS)

Accurate Methods for Approximate Bayesian Computation Filtering


Journal of Financial Econometrics

automne 2015, vol. 13, n°4, pp.798-838

Départements : Finance, GREGHEC (CNRS), Economie et Sciences de la décision

Mots clés : Bandwidth, Kernel density estimation, Likelihood estimation, Model selection, Particle filter, State-space model, Value-at-risk forecasts

The Approximate Bayesian Computation (ABC) filter extends the particle filtering methodology to general state-space models in which the density of the observation conditional on the state is intractable. We provide an exact upper bound for the mean squared error of the ABC filter, and derive sufficient conditions on the bandwidth and kernel under which the ABC filter converges to the target distribution as the number of particles goes to infinity. The optimal convergence rate decreases with the dimension of the observation space but is invariant to the complexity of the state space. We show that the adaptive bandwidth commonly used in the ABC literature can lead to an inconsistent filter. We develop a plug-in bandwidth guaranteeing convergence at the optimal rate, and demonstrate the powerful estimation, model selection, and forecasting performance of the resulting filter in a variety of examples

Approval Voting and Arrow's Impossibility Theorem


Social Choice and Welfare

mars 2015, vol. 44, n°3, pp.519-532

Départements : Economie et Sciences de la décision, GREGHEC (CNRS)

Approval voting has attracted considerable attention in voting theory, but ithasrarelybeeninvestigatedinanArrovianframeworkofcollectivepreference(”socialwelfare”) functions and never been connected with Arrow’s impossibility theorem.The article explores these two directions. Assuming that voters have dichotomouspreferences, it first characterizes approval voting in terms of its collective preferenceproperties and then shows that these properties become incompatible if the collectivepreference is also taken to be dichotomous. As approval voting and majority votinghappen to share the same collective preference function on the dichotomous domain,the positive result also bears on majority voting, and is seen to extend May’s andInada’s early findings on this rule. The negative result is a novel and perhaps surprisingversion of Arrow’s impossibility theorem, because the axiomatic inconsistency herestems from the collective preference range, not the individual preference domain

Approximate Implementation In Markovian Environments


Journal of Economic Theory

septembre 2015, vol. 159, Part A, pp.401-442

Départements : Economie et Sciences de la décision, GREGHEC (CNRS)

Mots clés : Implementation, Approximation, Undetectability, Efficiency, Dynamic, Mechanism Design, Markov Processes

This paper considers dynamic implementation problems in environments with changing private information (according to Markov processes). A social choice function is approximately implementable if it is correctly implemented an arbitrary large number of times with arbitrary high probability in all (communication) equilibria. We show that if a social choice function is strictly efficient in the set of social choice functions that satisfy an undetectability condition, then it is approximately implementable

Are We Lost in Translation? The Impact of Using Translated IFRS on Decision-Making


Accounting in Europe

2015, vol. 12, n°1, pp.107-125

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

Mots clés : Translation, Language, Decision-making

International Financial Reporting Standards (IFRS) are issued in English and subsequently translated into a multitude of languages to make them accessible to non-English-speaking IFRS users. In an international work context, IFRS users apply either the original English version or a translated version of an IFRS standard to input information presented in different languages. While research has reported numerous challenges inherent in IFRS translation, we know very little about the actual impact of using different languages on decision-making. Based on a series of 2 × 2 between-subjects experiments with German students who possessed different levels of accounting knowledge, we investigate the influence of language on decision-making. Our experimental manipulations entail the language of the accounting standard used (English vs. German) and the language of the input case information (English vs. German). Our German participants made decisions about a series of cases relating to IAS 24 Related Party Disclosures. Based on an expert benchmark solution for the cases, we determine the quality of participants’ decisions. We find that the use of IAS 24 in the participants’ mother tongue (German) has a positive impact on decision-making quality. We also find some support for a positive influence of the native language of the input case information relative to English input case information. Moreover, participants’ accounting knowledge and English language skill are positively associated with decision-making quality

Asset Divestment as a Response to Media Attacks in Stigmatized Industries


Strategic Management Journal

août 2015, vol. 36, n°8, pp.1205-1223

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : Stigma, Impression management, Divestment, Media, Categories, Reputation, Defense industry

In stigmatized industries characterized by social contestation, hostile audiences, and distancing between industry insiders and outsiders, firms facing media attacks follow different strategies from firms in uncontested industries. Because firms avoid publicizing their tainted-sector membership, when threatened, they can respond by divesting assets from that industry. Our analyses of the arms industry demonstrate that media attacks on the focal firm and its peers both increase the likelihood of divestment for the focal firm. Specifically, attacks on the focal firm are the most consequential, followed by attacks on peers in the same industry subcategory, and by attacks on peers in different subcategories. These findings shed new light on divestment as a response to media attacks in stigmatized industries and lead us to rethink impression management theory

Attribute-Level Heterogeneity


Management Science

avril 2015, vol. 61, n°4, pp.885-897

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Heterogeneity, Mixture models, Hierarchical Bayes, Conjoint analysis, Reversible-jump MCMC, Segmentation

Modeling consumer heterogeneity helps practitioners understand market structures and devise effective marketing strategies. In this research we study finite mixture specifications for modeling consumer heterogeneity where each regression coefficient has its own finite mixture—that is, an attribute finite mixture model. An important challenge of such an approach to modeling heterogeneity lies in its estimation. A proposed Bayesian estimation approach, based on recent advances in reversible-jump Markov chain Monte Carlo methods, can estimate parameters for the attribute-based finite mixture model, assuming that the number of components for each finite mixture is a discrete random variable. An attribute specification has several advantages over traditional, vector-based, finite mixture specifications; specifically, the attribute mixture model offers a more appropriate aggregation of information than does the vector specification facilitating estimation. In an extensive simulation study and an empirical application, we show that the attribute model can recover complex heterogeneity structures, making it dominant over traditional (vector) finite mixture regression models and a strong contender compared to mixture-of-normals models for modeling heterogeneity

Boards’ Response to Shareholders’ Dissatisfaction: The Case of Shareholders’ Say on Pay in the UK


European Accounting Review

décembre 2015, vol. 24, n°4, pp.727-752

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

Mots clés : Executive compensation, Say-on-Pay, shareholders' vote, dissatisfaction

In 2002, the United Kingdom adopted a regulation allowing shareholders to cast non-binding (advisory) votes on their firm's Directors' Remuneration Report during annual general meetings (the 'Say-on-Pay' rule). This study evaluates a decade of this regulation and examines how it affected the behavior of shareholders and boards in a sample of FTSE 350 firms during the period 2002-2012. I find evidence that shareholder dissatisfaction increases with excess CEO compensation. This relationship does not exist for the expected level of compensation, suggesting that shareholders take a sophisticated approach when casting their vote. Boards do not appear to respond to shareholder dissatisfaction systematically, however they do respond selectively by reducing the excessiveness of CEO compensation when performance is poor. Boards also seem to respond swiftly to shareholder dissatisfaction. There is evidence that the probability of CEO turnover increases with shareholder dissatisfaction. Overall, the evidence suggests that 'Say-on-Pay' regulation addressed regulatory concerns about transparency, accountability, and performance linkage