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Full-Text Articles in Social and Behavioral Sciences
Does Globalization Create Superstars? A Simple Theory Of Managerial Wages, Armin Schmutzler, Hans Gersbach
Does Globalization Create Superstars? A Simple Theory Of Managerial Wages, Armin Schmutzler, Hans Gersbach
Armin Schmutzler
To examine the impact of globalization on managerial remuneration, we consider a matching model where firms compete both in the product market and in the managerial market. We show that globalization, i.e., the simultaneous integration of product markets and managerial pools, leads to an increase in the heterogeneity of managerial salaries. Typically, while the most able managers obtain a wage increase, less able managers are faced with a reduction in wages. Hence our model is consistent with the increasing heterogeneity of CEO remuneration that has been observed in the last few decades.
Explaining Gift-Exchange - The Limits Of Good Intentions, Armin Schmutzler, Nick Netzer
Explaining Gift-Exchange - The Limits Of Good Intentions, Armin Schmutzler, Nick Netzer
Armin Schmutzler
This paper explores the limitations of intention-based social preferences as an explanation of gift-exchange between a firm and a worker. In a framework with one selfinterested and one reciprocal player, gift-giving never arises in equilibrium. Instead, any equilibrium in a large class of multi-stage games must involve mutually unkind behavior of both players. Besides gift-exchange, this class of games also includes moral hazard models and the rotten kid framework. Even though equilibrium behavior may appear positively reciprocal in some of these games, the self-interested player never benefits from reciprocity. We discuss the relation of these results to the theoretical and …
Does Supporting Passenger Railways Reduce Road Traffic Externalities?, Armin Schmutzler
Does Supporting Passenger Railways Reduce Road Traffic Externalities?, Armin Schmutzler
Armin Schmutzler
Many governments subsidize regional rail service as an alternative to road traffic. This paper assesses whether increases in service frequency reduce road traffic externalities. We exploit differences in service frequency growth by procurement mode following a railway reform in Germany to address endogeneity of service growth. Increases in service frequency reduce the number of severe road traffic accidents, carbon monoxide, nitrogen monoxide, nitrogen dioxide pollution and infant mortality. Placebo regressions with sulfur dioxide and ozone yield no effect. Service frequency growth between 1994 and 2004 improves environmental quality by an amount that is worth approximately 28-40 % of total subsidies. …
Competition And Investment - A Unified Approach, Armin Schmutzler
Competition And Investment - A Unified Approach, Armin Schmutzler
Armin Schmutzler
Using a simple but general two-stage framework, this paper identifies the circumstances under which increasing competition leads to more cost-reducing investments. The framework can, for instance, capture increasing substitutability for different types of oligopoly models or changes from Cournot to Bertrand competition. The paper identifies four transmission mechanisms by which competition affects investment. For a firm with lower initial marginal costs (higher efficiency), a positive effect of competition on investment is more likely. Positive spillovers support a negative effect of competition on investment. The relation between competition and Investment is not affected in an unambiguous way by the level of …