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BBC Funding: Much Ado about the Cost of a Coffee a Week
Get PDFBBC funding (the licence fee model and the funding level) has been turned into a big issue out of all proportion to the low financial stakes—equivalent to the cost of one takeaway coffee a week for the whole household, excluding those with free TV licences. This article first proposes and explores three possible reasons for all the fuss: that licence payers take the BBC for granted, underestimating the value they get from it; that the attacks on BBC funding are part of a wider ‘war’ against it, driven by commercial or political vested interests; and that at least some of the criticisms of the licence fee reflect genuine, although much exaggerated, disadvantages. The article then evaluates four alternative funding models: advertising, subscriptions, general taxation and a universal household levy. It argues that the best long‐term model would be a flat, universal household levy, with exemptions for those least able to pay, as in Germany, with the funding level set by an independent body organised by Ofcom; and that, because the licence fee is becoming harder to sustain, this new funding model should be introduced at the start of the next BBC Charter in January 2028
The effects of a firm’s internationalization, age, and environmental turbulence on the capabilities that comprise strategic agility
Get PDFThis study investigates a largely unexplored area by examining how internationalization, firm age, and environmental turbulence influence the key components of strategic agility, namely strategic sensitivity, leadership unity, and resource fluidity. Although these factors have been identified as potential catalysts for strategic agility, their specific impacts on strategic agility’s core capabilities have yet to be thoroughly explored. Our research aims to bridge this gap, providing a nuanced understanding of how each of these variables shapes the strategic agility of a firm. The study uses the empirical research of 220 Spanish firms in the service sector and then adopts partial least squares structural equation modeling to analyze the data. Our findings indicate that internationalization has a dual effect on strategic agility: internationalization enhances strategic sensitivity, reflecting improved environmental awareness, but it diminishes leadership unity, illustrating the complexities of global leadership alignment. Additionally, an increase in firm age is associated with a decrease in all the aspects of strategic agility. By contrast, environmental turbulence positively impacts each dimension of strategic agility, suggesting that turbulent conditions can indeed promote the adaptability and responsiveness of a firm
Apparent algorithmic discrimination and real-time algorithmic learning in digital search advertising
Get PDFDigital algorithms try to display content that engages consumers. To do this, algorithms need to overcome a `cold-start problem' by swiftly learning whether content engages users. This requires feedback from users. The algorithm targets segments of users. However, if there are fewer individuals in a targeted segment of users, simply because this group is rarer in the population, this could lead to uneven outcomes for minority relative to majority groups. This is because individuals in a minority segment are proportionately more likely to be test subjects for experimental content that may ultimately be rejected by the platform. We explore in the context of ads that are displayed following searches on Google whether this is indeed the case. Previous research has documented that searches for names associated in a US context with Black people on search engines were more likely to return ads that highlighted the need for a criminal background check than was the case for searches for white people. We implement search advertising campaigns that target ads to searches for Black and white names. Our ads are indeed more likely to be displayed following a search for a Black name, even though the likelihood of clicking was similar. Since Black names are less common, the algorithm learns about the quality of the underlying ad more slowly. As a result, an ad is more likely to persist for searches next to Black names than next to white names. Proportionally more Black name searches are likely to have a low-quality ad shown next to them, even though eventually the ad will be rejected. A second study where ads are placed following searches for terms related to religious discrimination confirms this empirical pattern. Our results suggest that as a practical matter, real-time algorithmic learning can lead minority segments to be more likely to see content that will ultimately be rejected by the algorithm
The short-termism trap: Catering to informed investors with limited horizons
Get PDFDoes the stock market exert short-term pressure on listed firms, do they respond, and is this response value reducing? We show that limited investor horizons indeed have those consequences, as follows. First, informative stock prices increase firm value; in our model, they reduce the agency cost of incentivizing managers. Second, short project maturity improves stock price informativeness by catering to informed investors with short horizons. Third, since informed trading capital is a scarce resource, attracting informed investors cannot increase an individual firm’s price informativeness in equilibrium: it simply destroys shareholder value. This “short-termism trap” can potentially destroy up to 100% of the benefits of stock market listing
Dynamic equilibrium with costly short-selling and lending market
Get PDFWe develop a dynamic model of costly stock short-selling and lending market and obtain implications that simultaneously support many empirical regularities related to short-selling. In our model, investors’ belief disagreement leads to shorting demand, whereby short-sellers pay shorting fees to borrow stocks from lenders. Our main novel results are as follows. Short interest is positively related to shorting fee and predicts stock returns negatively. Higher short-selling risk can be associated with lower stock returns and less short-selling activity. Stock volatility is increased under costly short-selling. An application to GameStop episode yields implications consistent with observed patterns
Human resource redeployability and entrepreneurial hiring strategy
Get PDFThe timing of talent acquisition is a central decision for new ventures. On one hand, hiring after demand is proven minimizes losses. On the other hand, hiring before demand is proven allows new ventures to start developing unique capabilities. We resolve this tension by proposing that the timing depends on human resource redeployability. We test our theory with the population of Finnish ventures showing that portfolio entrepreneurs hire more employees early on because of higher redeployment potential and that they hire employees with more transferable skills in order to benefit from the redeployment option. To probe our mechanisms, we examine how talent acquisition strategies in portfolio and standalone ventures vary with external conditions that reduce or amplify the benefits of redeployment
Brands in the Labor Market: How Vertical and Horizontal Brand Differentiation Impact Pay and Profits Through Employee-Brand Matching
Get PDFThe primary focus of brand equity research has been on how brand knowledge creates value for firms through customer behavior in product markets. Using archival data and five experiments, this article tests a framework that outlines the unique role brands play in the labor market. The framework distinguishes between vertical and horizontal differentiation and shows that vertical brand differentiation is associated with lower pay, whereas horizontal brand differentiation is associated with higher pay. Employees are also vertically and horizontally differentiated and firms high in horizontal brand differentiation pay more for employees who match their brands differentiating characteristics (i.e., brand-relevant complementarities). Results show that these brand-pay relationships have important downstream effects on employee behavior and, consequently, on firm profits. Specifically, leveraging vertical brand differentiation to lower pay represents a false economy because profits are attenuated by negative effects on employee productivity and retention. In contrast, when managers at firms high on horizontal brand differentiation pay more, profits increase via the same mediating employee behaviors. Six firm strategies and investments that influence firm bargaining power in the employee-brand matching process are found to moderate the brand-pay relationship and downstream effects on profits
Introduction: NBER International Seminar on Macroeconomics
No full textThis issue is a selection of papers presented at the 46th annual meeting of ISoM, the International Seminar on Macroeconomics. ISoM, a project of the National Bureau of Economic Research, brings together American and European economists in a different European city each June. This year's meeting was held in Ispra, Italy, June 21–22, 2023, hosted by the Economic Research Centre of the European Commission. The program was organized by Frankel and Rey. The papers have gone through the usual refereeing process of the Journal of International Economics, with Linda Tesar serving as special editor of this issue
A stochastic inference-dual-based decomposition algorithm for TSO-DSO-Retailer coordination
Get PDFThe flexibility services available from embedded resources, being attractive to both the network operators and retailers, pose a problem of co-ordination and market design at the local level. This research considers how a Flexibility Market Operator (FMO) at the local level, analogous to market operators at the wholesale level, can improve the real-time operation of the power systems and efficiently manage the interests of the TSO, DSO, and Retailers. Using generalized disjunctive programming, a stochastic bilevel representation of the task is reformulated as a stochastic mixed-logical linear program (MLLP) with indicator constraints. An Inference-Dual-Based Decomposition (IDBD) Algorithm is developed with sub-problem relaxation to reduce the iterations. Using expected Shapley values, a new payoff mechanism is introduced to allocate the cost of service activations in a fair way. Finally, the performance and benefits of the proposed method are assessed via a case study application
Time is not money! Temporal preferences for time investments and entry into entrepreneurship
Get PDFStarting a business requires investing both money and time in the hope of future financial benefits. Since investments and potential gains happen over time, the way in which individuals value the future relative to the present—i.e., their temporal preferences—may be an important driver behind the decision to become an entrepreneur. Whereas existing research examines temporal preferences for financial gains, we advance this research by theorizing about temporal preferences not only for money, but also for the future time commitments that entrepreneurship entails. Results from a lab-in-the-field study show that individuals who heavily discount future time investments are more likely to become entrepreneurs. In two follow-up studies, we confirm that recent startup founders discount future time investments more than salaried workers. We also provide suggestive evidence of the mechanisms at play: recent startup founders perceive the future differently than salaried workers, both viewing themselves as more agentic vis-à-vis the future and perceiving the future as more distant. We discuss the implications of temporal preferences—not only for money, but also for time—for understanding the behavioral drivers of entrepreneurshi