Bunching with the Stars: How Firms Respond to Environmental Certification

Voluntary environmental certification programs have been a popular tool used by governments, industry groups, and nonprofit organizations alike. A central question in the design of such programs is who should pay for them. In a context where firms respond strategically to a certification, the answer to this question is a priori ambiguous and, ultimately, empirical. This paper provides important insights on this question using ENERGY STAR, a voluntary certification program for energy-efficient products, as a case study. I show that firms are highly strategic with respect to this certification and extract consumer surplus associated with certified products via three mechanisms. They offer products that bunch at the certification requirement, differentiate certified products in the energy and nonenergy dimensions, and charge a price premium on certified products. I use these findings to motivate a structural econometric model with firms’ strategic behaviors with respect to product line and pricing decisions and to investigate the incidence of a certification licensing fee to fund the certification program. This paper was accepted by Juanjuan Zhang, marketing.

Affective and Emotional Determinants of Entrepreneurial Orientation Within Family Firms

As a predominant form of business organization, family firms have attracted increasing attention by scholars, and especially by those researching entrepreneurial orientation with the aim of better understanding of entrepreneurial activities pursued by enterprises. However, the literature on the confluence of entrepreneurial orientation and family firms has paid scant attention to the influence of affective and emotional factors. To cover this research gap, the authors analyze the impact of affective commitment and concern for socioemotional wealth preservation on entrepreneurial orientation. To do so, they performed an empirical study using the data collected from 342 small and mid-sized family firms from Portugal, a country where family firms are under-researched even though they make up the backbone of the economy. Results show that both affective commitment and socioemotional wealth positively impact entrepreneurial orientation, pointing to the need to further research the relationships between such factors and strategic behaviors in the family business context.

Information Asymmetry Among Investors and Strategic Bidding in Peer-to-Peer Lending

Peer-to-peer (P2P) lending became a global phenomenon in recent years. Despite their prominence in the “FinTech” era, P2P platforms remain a risky investment because of the high default rate of unsecured personal loans funded on such platforms. In contrast, the rate of return can be much higher than that of other investments if P2P loans are repaid. Therefore, investors of P2P loans need information about borrowers’ ability to repay. An important channel is to learn from other investors who may have information advantages. We argue that, because collective effort from investors is required in P2P lending, it could be optimal for informed investors to bid early in projects with the purpose of signaling the quality. With a unique data set from Prosper.com, we find that informed investors are indeed more likely to bid in the early stage of a project with a low probability of being funded, whereas uninformed investors will follow. The “squatting” behavior (early bidding) of informed investors facilitates information spillover to uninformed investors, benefitting the investors and borrowers who otherwise may not raise sufficient funding. Our findings also have implications for P2P lending platforms on how to manage the information asymmetry and strategic behaviors of investors.

Spatio-Temporal Pricing for Ridesharing Platforms

Ridesharing platforms have radically changed the way people get around in urban areas, but there remain challenges undercutting the mission of “making transportation as reliable as running water.” A particular concern is that drivers strategize: calling riders to find out their destinations and canceling trips that are not worthwhile, declining trips and chasing surge prices in neighboring areas, and going off-line before large events will end in anticipation of a price increase. In this work, we show that such strategic behaviors are symptoms of inefficiencies in the pricing and dispatching rules governing today's platforms. We propose the Spatio-Temporal Pricing mechanism, which solves for the welfare-optimal matching of drivers to trips, and sets prices that are appropriately smooth in both space and time such that the best thing for drivers to do is accept any proposed trip dispatch. This demonstrates that ridesharing platforms can succeed in optimally orchestrating trips and providing reliable transpiration for riders, while still leaving drivers with the flexibility to decide how to work.

How do users interact with Virtual Geographic Environments? Users’ behavior evaluation in urban participatory planning

For the past twenty years, the adoption of Virtual Geographic Environments is thriving. This democratization is due to numerous new opportunities offered by this medium. However, in participatory urban planning these interactive 3D geovisualizations are still labeled as very advanced means, and are only scarcely used. The involvement of citizens in urban decision-making is indeed carefully planned ahead to limit off-topic feedback. A better comprehension of Virtual Geographic Environments, and more specifically of users’ strategic behaviors while interacting with this medium could enhance participants’ contributions. The users’ strategic behavior was assessed in this article through an experimental study. A total of 107 participants completed online tasks about the identification of 3D scenes’ footprints, the comparison of buildings’ heights, and the visibility of objects through the scenes. The interactions of the participants were recorded (i.e. pressed keys, pointing device interactions), as well as the camera positions adopted to complete specific tasks. The results show that: (1) users get more efficient throughout the study; (2) interruptions in 3D manipulation appear to highlight difficulties in interacting with the virtual environments; (3) users tend to centralize their positions within the scene, notably around their starting position; (4) the type of task strongly affects the behavior of users, limiting or broadening their explorations. The results of this experimental study are a valuable resource that can be used to improve the design of future urban planning projects involving Virtual Geographic Environments, e.g. with the creation of personalized 3D tools.

The Emergence of Lying for Reputational Concerns in 5-Year-Olds

Research suggests that even young children engage in strategic behaviors to manipulate the impressions others form of them and that they manage their reputation in order to cooperate with others. The current study investigated whether young children also lie in order to manage their, or their group’s, reputation in front of ingroup and outgroup members. Five-year old children (n=55) were randomly assigned to an individual reputation condition or a group reputation condition. Then, they played a mini dictator game in which they could share privately any number of their or their group’s stickers with an anonymous child. Participants then met ingroup and outgroup members, established through a minimal group design, via a pre-recorded, staged Skype call. Group members asked the participant how many stickers she, or her group, had donated. Results revealed that children stated to peers to have donated more than their actual donation, with no differences between conditions and no difference toward ingroup and outgroup members. Findings suggest that by 5years of age, children use lying as a strategy to manage their reputation.

Nomination trade-offs: How context affects political parties’ strategies to nominate immigrant-origin candidates

Political parties in Western democracies with large immigrant populations have become increasingly interested in nominating immigrant-origin candidates. This paper investigates how contextual factors explain parties’ effort of immigrant representation. I argue that nominations of immigrant-origin candidates are shaped by parties’ strategic calculations weighing out potential vote gains among immigrant-origin voters compared to a potential native backlash. I contend that alien enfranchisement and liberal naturalization policies provide decisive incentives to nominate immigrant-origin candidates. In contrast, economic insecurity implies potential material threat perceptions generating a native backlash against immigrants, reducing the nomination of immigrant-origin candidates. Using a novel dataset on candidates in Switzerland, the analysis reveals that the political and economic contexts indeed determine the number of immigrant-origin candidates and their ballot position, particularly those of non-Western origin. These findings have significant implications for our understanding of strategic behaviors of political parties and the promotion of immigrant representation.

Strategic Analysis of Participants in the Provision of Elderly Care Services—An Evolutionary Game Perspective

Population aging poses challenges to the immature elderly care service system in many countries. The strategic behaviors of different participants in the provision of elderly care services in a long-term and dynamic situation have not been well studied. In this paper, an evolutionary game model is developed to analyze the strategic behaviors of two types of participants—the government sectors and the private sectors in provision of elderly care services. Firstly, eight scenarios are analyzed, and the evolutionary process and stable strategies are identified. Then, the behavioral strategies of the two types of participants under demand disturbance and dynamic subsidy strategy are analyzed. Simulation experiments are conducted to explore the influence of different initial conditions and parameter changes on the evolutionary process and results. The obtained observations are not only conducive to a systematic understanding of the long-term dynamic provision of elderly care services but also to the policymaking of the government.

Gender, Electoral Incentives, and Crisis Response: Preliminary Evidence from Brazilian Mayors

While there is evidence of gender differences in policy preferences and electoral strategic behaviors, less is known about how these differences play out during crises. We use a close election RD design to compare the performance of female- and male-led Brazilian municipalities during the COVID-19 pandemic. We find that having a female mayor led to more deaths per capita early in the first wave of the pandemic -a period characterized by great uncertainty about the severity of the disease and the effectiveness of containment policies. In contrast, having a female mayor led to fewer deaths per capita early in the second wave -a period where this uncertainty was reduced, and when the 2020 mayoral election took place. Consistent with the evolution of deaths, we find that female mayors were less likely to implement commerce restrictions at the beginning of the period, while they became more likely to do so at the end. We also show that the second-wave effect coincides with a lower tendency of the population in maleled municipalities to stay at home around election day. Both the first and second wave effects are driven by municipalities whose mayors were not term limited, and thus allowed to run for re-election. These findings suggest that the gender differences we observe stem from female and male mayors reacting differently to electoral incentives. While electorally motivated female mayors were more likely to delay restrictive policies at the beginning, electorally motivated male mayors were more likely to open-up the municipality closer to the election.