Characterizations of Smooth Ambiguity Based on Continuous and Discrete Data


Mathematics of Operations Research

février 2017, vol. 42, n°1, pp.167 - 178

Départements : Economie et Sciences de la décision

Mots clés : smooth ambiguity; variational preferences; revealed preference; completely monotone functions; Afriat inequalities; moment problem

In the Anscombe-Aumann setup, we provide conditions for a collection of observations to be consistent with a well-known class of smooth ambiguity preferences (Klibanoff P, Marinacci M, Mukerji S (2005) A smooth model of decision making under ambiguity. Econometrica 73(6):1849–1892.). Each observation is assumed to take the form of an equivalence between an uncertain act and a certain outcome. We provide three results that describe these conditions for data sets of different cardinality. Our findings uncover surprising links between the smooth ambiguity model and classic mathematical results in complex and functional analysis.

Dynamic Dependence and Diversification in Corporate Credit


Review of Finance

2017, pp.1-40

Départements : Finance, GREGHEC (CNRS)

Mots clés : Credit risk, Default risk, CDS, Dynamic dependence, Copula

We characterize dependence in corporate credit and equity returns for 215 firms using a new class of large-scale dynamic copula models. Copula dependence and especially tail dependence are highly variable and persistent, increase significantly in the financial crisis, and have remained high since. The most drastic increases in credit dependence occur in July/August of 2007 and in August of 2011 and the decrease in diversification potential caused by the increases in dependence and tail dependence is large. Credit default swap correlation dynamics are important determinants of credit spreads

Effects of inter-group status on the pursuit of intra-group status

J. W. CHANG, Rosalind CHOW, Anita WOOLLEY

Organizational Behavior and Human Decision Processes

mars 2017, vol. 139, pp.1–17

Départements : Management et Ressources Humaines, GREGHEC (CNRS)

Mots clés : Inter-group status; Intra-group status; Cooperation; Competition

This research examines how the status of one’s group influences intra-group behavior and collective outcomes. Two experiments provide evidence that, compared to members of low-status groups, members of high-status groups are more concerned about their intra-group standing, which in turn can increase both the likelihood of competitive and cooperative intra-group behavior. However, whether the desire for intra-group standing manifests via competitive versus cooperative behavior depends on the relevance of the task to the group’s inter-group standing. When the task is not clearly relevant to the group’s status, members of high-status groups are more likely to engage in competitive behavior out of a desire to manage their intra-group status, which, in turn, leads to less desirable collective outcomes. However, when the group’s status is at stake, members of high-status groups seek intra-group status via cooperative behavior, leading to better collective outcomes.

Estimating Value Creation from Revealed Preferences: Application to Value-Based Strategies


Strategic Management Journal

2017, vol. 38, pp.1964-1985

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

Mots clés : buyer–supplier relationships; client-speciceconomies of scope; cooperative game theory; revealedpreferences; value-based strategy

We develop and apply a new set of empirical tools consistent with the tenets of value-based business strategies, leveraging the principle that “no good deal comes undone” and the methods of revealed preferences to empirically estimate drivers of value creation. We demonstrate how to use these tools in an analysis of value creation in buyer–supplier relationships in the UK corporate legal market. We show how the method can uncover evidence of subtle mechanisms that traditional methods cannot easily distinguish from each other. Furthermore, we show how these estimates can be used as parameters of biform games for out-of-sample analyses of strategic decisions. With readily available data on relationships between firms, this approach can be applied to many other contexts of interest to strategy researchers

Evaluative Infrastructures: Accounting for distributed network production


Accounting Organizations and Society

2017, vol. 60, n°7, pp.79-95

Départements : Comptabilité et Contrôle de Gestion

Mots clés : AccountingHierarchical consciousnessEvaluationInfrastructurePlatform organization!

Platform organizations such as Uber, eBay and Airbnb represent a growing disruptive phenomenon in contemporary capitalism, transforming economic organization, the nature of work, and the distribution of wealth. This paper investigates the accounting practices that underpin this new form of organizing, and in doing so confronts a significant challenge within the accounting literature: the need to escape what Hopwood (1996) describes as its “hierarchical consciousness”. In order to do so, this paper develops the concept of evaluative infrastructure which describes accounting practices that enable platform based organization. They are evaluative because they deploy a plethora of interacting devices, including rankings, ratings, reviews, and audits to establish orders of worth. They are infrastructures because they provide the invisible yet essential mechanisms for the flow of economic activity and exchange on platforms. Illustrating the concept of evaluative infrastructure with the example of eBay, the paper's contribution is to (1) provide an analytical vocabulary to capture the accounting practices underpinning platforms as new organizational forms, and in so doing (2) extend accounting scholars' analytical focus from hierarchical settings towards heterarchies. Conceptually, this shift from management accounting to evaluative infrastructures entails a focus on relationality (evaluative infrastructures do not represent or reference but relate things, people and ideas with each other); generativity (evaluative infrastructures do not territorialize objects but disclose new worlds); and new forms of control (evaluative infrastructures are not centres of calculation; rather, control is radically distributed, whilst power remains centralized).

France’s Commercial courts: a good example of the administration of justice by ordinary citizens


Journal of Business Law

2017, vol. 1, pp.1-22

Départements : Droit et fiscalité, GREGHEC (CNRS)

Mots clés : Accessto justice; Commercial law; Courts' powers and duties;France; Judges; Legal history

Commercial courts occupy a highly specific position in the French judiciary landscape, since their judges are elected.French commercial court judges are not members of the legal professions but business executives and tradespeoplechosen by their peers. This encourages a pragmatic view that takes into account the economic constraints faced by companies. InFrance, certain courts of first instance,such asthe commercial courts, delegate the function of judgment to ordinary citizens, whereas in most courts of first instance, and the appeal courts Cour d’appel and Cour de cassation, only full-time professional magistrates can rule on the cases brought before the court

Heterogeneous social motives and interactions: The three predictable paths of capability development: Heterogeneity in capability development paths


Strategic Management Journal

2017, vol. 38, n°9, pp.1755-1773

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

Mots clés : deliberate capability development; motiva-tional microfoundations; social interactions; businessprocess performance; multilevel

Research summary: Limited attention has been paid to the crucial role of individuals' motivation and social interactions in capability development. Building on literature in social psychology and behavioral economics that links heterogeneity in individual social motives to social interactions, we explain how the variation, selection, and retention processes underlying a group's deliberate capability development are affected by the composition of the group in terms of individuals' social motives in interplay with the organizational-level motivational levers designed by managers. Our multilevel theoretical model suggests that individual-level heterogeneity leads to the development of capabilities along different paths. For practice, this implies that, according to the composition of the group in terms of social motives, capabilities are more or less technically and evolutionary adequate and a source of business process performance.Managerial summary:We propose that when a group of employees engages in developing one of the firm's capabilities, capability development will follow a different path according to what motivates most of the employees composing the group. We identify and discuss three paths. Two of these paths (convergence and congruence) can help improve business process performance in a stable environment, the third one (open-ended) in a dynamic environment. Our work invites managers to not only think in terms of more or less capability development, but also in terms of capability development path(s): the path(s) in which groups in the firm are currently engaged and the one(s) that are desirable given the firm's objectives and the nature of the environment(s) the firm faces in deploying its business processes

Housing Collateral and Entrepreneurship


The Journal of Finance

février 2017, vol. 72, n°1, pp.99-132

Départements : Finance

We show that collateral constraints restrict firm entry and postentry growth, using French administrative data and cross-sectional variation in local house-price appreciation as shocks to collateral values. We control for local demand shocks by comparing treated homeowners to controls in the same region that do not experience collateral shocks: renters and homeowners with an outstanding mortgage, who (in France) cannot take out a second mortgage. In both comparisons, an increase in collateral value leads to a higher probability of becoming an entrepreneur. Conditional on entry, treated entrepreneurs use more debt, start larger firms, and remain larger in the long run.

Incorporating hidden costs of annoying ads in display auctions


International Journal of Research in Marketing

2017, vol. 34, pp.622-640

Départements : Marketing, GREGHEC (CNRS)

Media publisher platforms often face an effectiveness-nuisance tradeoff: more annoying ads can be more effective for some advertisers because of their ability to attract attention, but after attracting viewers’ attention, their nuisance to viewers can decrease engagement with the platform over time. With the rise of mobile technology and ad blockers, many platforms are becoming increasingly concerned about how to improve monetization through digital ads while improving viewer experience.We study an online ad auction mechanism that incorporates a charge for ad impact on user experience as a criterion for ad selection and pricing. Like a Pigovian tax, the charge causes advertisers to internalize the hidden cost of foregone future platform revenue due to ad impact on user experience. Over time, the mechanism provides an incentive for advertisers to develop ads that are effective while offering viewers a more pleasant experience. We show that adopting the mechanism can simultaneously benefit the publisher, advertisers, and viewers, even in the short term.Incorporating a charge for ad impact can increase expected advertiser profits if enough advertisers compete. A stronger effectiveness-nuisance tradeoff, meaning that ad effectiveness is more strongly associated with negative impact on user experience, increases the amount of competition required for the mechanism to benefit advertisers. The findings suggest that the mechanism can benefit the marketplace for ad slots that consistently attract many advertisers

Italy’s Gentle Revolution: The New Law on Same-Sex Partnerships


The Digest - National Italian American Bar Association (NIABA) Law Journal

2017, vol. 25, pp.1-31

Départements : Droit et fiscalité, GREGHEC (CNRS)

Mots clés : Italy; Constitutional Law; Human Rights; LGBT Rights

This Article comments the genesis and the content of the Italian law on civil partnerships between people of the same sex, enacted in May, 2016, and eventually entered into operation, together with a bunch of administrative regulations, in early 2017. As the last country of Western Europe to adopt such a law, the Italian law recognises civil partnerships for same-sex couples but presents several flaws in terms of equality and nondiscrimination based on sexual orientation