Regulation and the Management of Expectations - Rating Agencies Revisited

In the aftermath of the 2008 crisis, scholars have begun to revise their conceptions of how market participants interact. While the traditional “rationalist optic” posits market participants who are able to process decisionrelevant information and thereby transform uncertainty into quantifiable risks, the increasingly popular “sociological optic” stresses the role of uncertainty in expectation formation and social conventions for creating confidence in markets. Applications of the sociological optic to concrete regulatory problems are still limited. By subjecting both optics to the same regulatory problem—the role of credit rating agencies (CRAs) and their ratings in capital markets—this paper provides insights into whether the sociological optic offers advice to tackle concrete regulatory problems and discusses the potential of the sociological optic in complementing the rationalist optic. The empirical application suggests that the sociological optic is not only able to improve our understanding of the role of CRAs and their ratings, but also to provide solutions complementary to those posited by the rationalist optic.

Cooperative VET in Training Networks: Analysing the Free-Rider Problem in a Sociology-of-Conventions Perspective

In training networks, particularly small and medium-sized enterprises pool their resources to train apprentices within the framework of the dual VET system, while an intermediary organisation is tasked with managing operations. Over the course of their apprenticeship, the apprentices switch from one training company to another on a (half-) yearly basis. Drawing on a case study of four training networks in Switzerland and the theoretical framework of the sociology of conventions, this paper aims to understand the reasons for the slow dissemination and reluctant adoption of this promising form of organising VET in Switzerland. The results of the study show that the system of moving from one company to another creates a variety of free-rider constellations in the distribution of the collectively generated corporative benefits. This explains why companies are reluctant to participate in this model. For the network to be sustainable, the intermediary organisation has to address discontent arising from free-rider problems while taking into account that the solutions found are always tentative and will often result in new free-rider problems.