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Baucells M.,IESE Business School
Theory and Decision | Year: 2010

Are risk preferences stable over time? To address this question we elicit risk preferences from the same pool of subjects at two different moments in time. To interpret the results, we use a Fechner stochastic choice model in which the revealed preference of individuals is governed by some underlying preference, together with a random error. We take cumulative prospect theory as the underlying preference model (Kahneman and Tversky, Econometrica 47:263-292, 1979; Tversky and Kahneman, Journal of Risk and Uncertainty 5:297-323, 1992). We observe that the aggregate pattern of preferences is very similar in both sessions, and it matches the results reported in the literature. Most subjects are risk averse for gains, and risk seeking for losses. However, the subjects that jointly agree with the reflection effect of prospect theory are around 50%. The percentage of individuals that change their responses across sessions is quite high, 63%. Estimating the stochastic choice model we find that 72% of the subjects have an underlying preference which agrees with the reflection effect of prospect theory. The remaining 28% are mainly classified as risk averse for both gains and losses. The results reinforce the empirical validity of the reflection effect. Deviations from the reflection effect can be attributed to noise, as well as to the existence of a fraction of risk averse subjects.


Campa J.M.,IESE Business School
Asian Economic Policy Review | Year: 2012

Fiscal challenges in the Euro zone have been at the center of global economic concern in the last 2 years. Despite lower debt burdens, and higher fiscal efforts taken by Euro countries, a perception of high fiscal risk remains. This paper reviews the fiscal challenges facing the Euro area countries and the measures taken at the Euro area level to manage short-term pressures and to enhance long-term functioning of the area, as well as the main lines of national specific reforms. The paper shows the unique characteristics of the Euro area that still raise concerns to foster stability and the challenges to address them. © 2012 The Author. Asian Economic Policy Review © 2012 Japan Center for Economic Research.


Kaganer E.,IESE Business School | Pawlowski S.D.,Louisiana State University | Wiley-Patton S.,Louisiana State University
Journal of the Association of Information Systems | Year: 2010

Research on IT innovations has largely relied on economic-rationalistic models and focused on individuals or organizations as the unit of analysis. The intent of this paper is to advance an alternative research agenda that explores the institutional underpinnings of IT innovation diffusion at the inter-organizational level. Through a multistage research study, we examine the legitimation function of organizing visions for IT innovations and develop a taxonomy of legitimation strategies employed by the proponents of an IT innovation. We first built a preliminary theoretical framework that synthesizes key arguments on legitimacy drawn from the organization theory and IS literatures. Next, we conducted an exploratory case study of institutional entrepreneurship surrounding computerized physician order entry (CPOE) systems. We examined the discursive actions of CPOE vendors by content analyzing 165 press releases issued between 1998 and 2006. We then combined the findings of the literature analysis and the case study to create a taxonomy of discursive strategies for building IT innovation legitimacy. A post-hoc analysis of the case study data reveals a number of interesting patterns in the CPOE vendors' use of the legitimation strategies and helps us formulate a set of research questions to guide future investigations. The work reported in this paper lays a foundation for a deeper understanding of the role of legitimacy and legitimation in shaping diffusion of IT innovations. It also contributes to the conceptual and methodological elaboration of the organizing vision framework. © 2010, by the Association for Information Systems.


Cassiman B.,IESE Business School | Di Guardo M.C.,University of Cagliari | Valentini G.,Bocconi University
Research Policy | Year: 2010

Links with science have been argued to improve the (innovation) performance of firms. Yet we still know comparatively little about the project-level characteristics affecting the organization of such links. Our study, based on a sample of 52 projects carried out by a multinational company in the semiconductor industry, reveals that the knowledge attributes of a project help in predicting how the R&D activities will be organized. In particular, basic projects are likely to be developed through formal cooperative agreements with universities. Such projects also tend to be strategically less important. For strategically more important projects, in contrast, and for those where the knowledge to be developed is particularly novel to the firm, the firm is more likely to resort to formal contracting with a university for a specific component of the R&D project, usually early on in the project. © 2010 Elsevier B.V. All rights reserved.


Vives X.,IESE Business School
Oxford Review of Economic Policy | Year: 2011

This paper summarizes some of the arguments relating competition and banking instability, draws connections between regulation and competition policy, and surveys and analyses the role of competition policy in the banking sector in a financial crisis. It is argued that a trade-off between competition and stability is bound to persist despite improvements in regulation, that the banking sector specificity should be recognized by competition policy, and that competition policy and regulation need close coordination. © The Author 2012. Published by Oxford University Press.

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