Governance of Massive Multiauthor Collaboration – Linux, Wikipedia, and Other Networks: Governed by Bilateral Contracts, Partnerships, or Something in Between?

Open collaborative projects are moving to the foreground of knowledge production. Some online user communities develop into longterm projects that generate a highly valuable and at the same time freely accessible output. Traditional copyright law that is organized around the idea of a single creative entity is not well equipped to accommodate the needs of these forms of collaboration. In order to enable a peculiar network-type of interaction participants instead draw on public licensing models that determine the freedoms to use individual contributions. With the help of these access rules the operational logic of the project can be implemented successfully. However, as the case of the Wikipedia GFDL-CC license transition demonstrates, the adaptation of access rules in networks to new circumstances raises collective action problems and suffers from pitfalls caused by the fact that public licensing is grounded in individual copyright. Legal governance of open collaboration projects is a largely unexplored field. The article argues that the license steward of a public license assumes the position of a fiduciary of the knowledge commons generated under the license regime. Ultimately, the governance of decentralized networks translates into a composite of organizational and contractual elements. It is concluded that the production of global knowledge commons relies on rules of transnational private law.

Live Cattle Futures and Options: How Have They Done?

Futures did reduce price risk. Hedging produced a higher minimum return and higher return at the 25th percentile (75% of the returns are better than this figure) than did the cash market. The 50th percentile, or median return, was higher for yearlings in the cash market than hedged cattle, and the calves had mixed results. Although the differences are not great, there have been months when the option strategies performed better than cash or futures, (i.e., January–April and September–October), and there are months when they did not fare well (i.e., June–August).

In Case of Emergency: Implementing Disaster Clauses in Publisher Contracts

Joanne Romano, Licensing and Serials Librarian for The Texas Medical Center Library, presented “In Case of Emergency--Implementing Disaster Clauses in Publisher Contracts” to the National Network of Libraries of Medicine/Southeastern/Atlantic Region’s Emergency Response and Preparedness Advisory Committee, (NN/LM-SE/A ERAC) on November 17, 2010, in St. Petersburg, FLA at the Marriott Vinoy Renaissance Resort. Included were slides of the devastation after the 8.8 magnitude earthquake in the Maule region of Chile, how The TMC Library assisted, lessons learned, and advice for how to include disaster clauses in publisher licenses. The NN/LM-SE/A ERAC group invited Ms. Romano to present at their bi-meeting after learning of her library’s key role from other NLM officers. As a result, Ms. Romano was then invited as a guest speaker on for NN/LM-SE/A region’s annual webinar, “Beyond the Sea”, which also included speakers from John Wiley & Sons, Inc., the publisher who worked with The TMC Library in providing emergency access to researchers at the University de Talca, Talca, Chile.

Envisioning sustainable water futures in a transdisciplinary learning process: combining normative, explorative, and participatory scenario approaches

Competing water demands for household consumption as well as the production of food, energy, and other uses pose challenges for water supply and sustainable development in many parts of the world. Designing creative strategies and learning processes for sustainable water governance is thus of prime importance. While this need is uncontested, suitable approaches still have to be found. In this article we present and evaluate a conceptual approach to scenario building aimed at transdisciplinary learning for sustainable water governance. The approach combines normative, explorative, and participatory scenario elements. This combination allows for adequate consideration of stakeholders’ and scientists’ systems, target, and transformation knowledge. Application of the approach in the MontanAqua project in the Swiss Alps confirmed its high potential for co-producing new knowledge and establishing a meaningful and deliberative dialogue between all actors involved. The iterative and combined approach ensured that stakeholders’ knowledge was adequately captured, fed into scientific analysis, and brought back to stakeholders in several cycles, thereby facilitating learning and co-production of new knowledge relevant for both stakeholders and scientists. However, the approach also revealed a number of constraints, including the enormous flexibility required of stakeholders and scientists in order for them to truly engage in the co-production of new knowledge. Overall, the study showed that shifts from strategic to communicative action are possible in an environment of mutual trust. This ultimately depends on creating conditions of interaction that place scientists’ and stakeholders’ knowledge on an equal footing.

Static replications with traffic light options

It is well known that sufficiently regular, one-dimensional payoff functions have an explicit static hedge by bonds, forward contracts, and options in a continuum of strikes. An easy and natural extension of the corresponding representation leads to static hedges based on the same instruments along with traffic light options, which have recently been introduced in the market. It is well known that the second strike derivative of non-discounted prices of vanilla options is related to the risk-neutral density of the underlying asset price in the corresponding absolutely continuous settings. Similar statements hold for traffic light options in sufficiently regular, bivariate settings.

Essays on behavioral aspects of the design and disclosure of compensation contracts

This thesis consists of four essays on the design and disclosure of compensation contracts. Essays 1, 2 and 3 focus on behavioral aspects of mandatory compensation disclosure rules and of contract negotiations in agency relationships. The three experimental studies develop psychology- based theory and present results that deviate from standard economic predictions. Furthermore, the results of Essay 1 and 2 also have implications for firms’ discretion in how to communicate their top management’s incentives to the capital market. Essay 4 analyzes the role of fairness perceptions for the evaluation of executive compensation. For this purpose, two surveys targeting representative eligible voters as well as investment professionals were conducted. Essay 1 investigates the role of the detailed ‘Compensation Discussion and Analysis’, which is part of the Security and Exchange Commission’s 2006 regulation, on investors’ evaluations of executive performance. Compensation disclosure complying with this regulation clarifies the relationship between realized reported compensation and the underlying performance measures and their target achievement levels. The experimental findings suggest that the salient presentation of executives’ incentives inherent in the ‘Compensation Discussion and Analysis’ makes investors’ performance evaluations less outcome dependent. Therefore, investors’ judgment and investment decisions might be less affected by noisy environmental factors that drive financial performance. The results also suggest that fairness perceptions of compensation contracts are essential for investors’ performance evaluations in that more transparent disclosure increases the perceived fairness of compensation and the performance evaluation of managers who are not responsible for a bad financial performance. These results have important practical implications as firms might choose to communicate their top management’s incentive compensation more transparently in order to benefit from less volatile expectations about their future performance. Similar to the first experiment, the experiment described in Essay 2 addresses the question of more transparent compensation disclosure. However, other than the first experiment, the second experiment does not analyze the effect of a more salient presentation of contract information but the informational effect of contract information itself. For this purpose, the experiment tests two conditions in which the assessment of the compensation contracts’ incentive compatibility, which determines executive effort, is either possible or not. On the one hand, the results suggest that the quality of investors’ expectations about executive effort is improved, but on the other hand investors might over-adjust their prior expectations about executive effort if being confronted with an unexpected financial performance and under-adjust if the financial performance confirms their prior expectations. Therefore, in the experiment, more transparent compensation disclosure does not lead to more correct overall judgments of executive effort and to even lower processing quality of outcome information. These results add to the literature on disclosure which predominantly advocates more transparency. The findings of the experiment however, identify decreased information processing quality as a relevant disclosure cost category. Firms might therefore carefully evaluate the additional costs and benefits of more transparent compensation disclosure. Together with the results from the experiment in Essay 1, the two experiments on compensation disclosure imply that firms should rather focus on their discretion how to present their compensation disclosure to benefit from investors’ improved fairness perceptions and their spill-over on performance evaluation. Essay 3 studies the behavioral effects of contextual factors in recruitment processes that do not affect the employer’s or the applicant’s bargaining power from a standard economic perspective. In particular, the experiment studies two common characteristics of recruitment processes: Pre-contractual competition among job applicants and job applicants’ non-binding effort announcements as they might be made during job interviews. Despite the standard economic irrelevance of these factors, the experiment develops theory regarding the behavioral effects on employees’ subsequent effort provision and the employers’ contract design choices. The experimental findings largely support the predictions. More specifically, the results suggest that firms can benefit from increased effort and, therefore, may generate higher profits. Further, firms may seize a larger share of the employment relationship’s profit by highlighting the competitive aspects of the recruitment process and by requiring applicants to make announcements about their future effort. Finally, Essay 4 studies the role of fairness perceptions for the public evaluation of executive compensation. Although economic criteria for the design of incentive compensation generally do not make restrictive recommendations with regard to the amount of compensation, fairness perceptions might be relevant from the perspective of firms and standard setters. This is because behavioral theory has identified fairness as an important determinant of individuals’ judgment and decisions. However, although fairness concerns about executive compensation are often stated in the popular media and even in the literature, evidence on the meaning of fairness in the context of executive compensation is scarce and ambiguous. In order to inform practitioners and standard setters whether fairness concerns are exclusive to non-professionals or relevant for investment professionals as well, the two surveys presented in Essay 4 aim to find commonalities in the opinions of representative eligible voters and investments professionals. The results suggest that fairness is an important criterion for both groups. Especially, exposure to risk in the form of the variable compensation share is an important criterion shared by both groups. The higher the assumed variable share, the higher is the compensation amount to be perceived as fair. However, to a large extent, opinions on executive compensation depend on personality characteristics, and to some extent, investment professionals’ perceptions deviate systematically from those of non-professionals. The findings imply that firms might benefit from emphasizing the riskiness of their managers’ variable pay components and, therefore, the findings are also in line with those of Essay 1.

Validierung einer deutschsprachigen Version des Career Futures Inventory (CFI): Berufliche Anpassungsfähigkeit, beruflicher Optimismus, Arbeitsmarktwissen und Berufserfolg

Das Career Futures Inventory (CFI; Rottingaus, Day & Borgen, 2005) erfasst die drei laufbahnbezogenen Zukunftsfaktoren career adaptability (Berufliche Anpassungsfähigkeit), career optimism (Beruflicher Optimismus) und knowledge of job market (Arbeitsmarktwissen). Die Ziele dieser Studie waren (a) eine deutschsprachige Version des CFIs zu konstruieren und (b) an zwei Stichproben mit Erwerbstätigen mittels (c) unterschiedlicher Indikatoren des Berufserfolgs und anhand von Persönlichkeitseigenschaften zu validieren. Es konnte in beiden Stichproben (N1 = 153; N2 = 110) die 3-faktorielle Struktur des CFIs nachgewiesen werden. Zudem konnten Annahmen zur konvergenten und diskriminanten Validität in beiden Stichproben bestätigt werden, da die CFI-Faktoren in erwarteter Richtung mit Berufserfolg (z. B. Beförderungen, Karrierezufriedenheit) bzw. Persönlichkeitseigenschaften (d. h. Big Five) korrelierten bzw. nicht korrelierten. Eine Analyse der inkrementellen Validität zeigte, dass Arbeitsmarktwissen zusätzliche Varianz beim Gehalt über Kontrollvariablen und Persönlichkeit hinaus erklärte. Hinsichtlich Karrierezufriedenheit war dies für beruflichen Optimismus der Fall. Diese Validierungsstudie ermöglicht den Einsatz des CFIs im deutschsprachigen Raum.

Contrasting futures for ocean and society from different anthropogenic CO2 emissions scenarios

The ocean moderates anthropogenic climate change at the cost of profound alterations of its physics, chemistry, ecology, and services. Here, we evaluate and compare the risks of impacts on marine and coastal ecosystems—and the goods and services they provide—for growing cumulative carbon emissions under two contrasting emissions scenarios. The current emissions trajectory would rapidly and significantly alter many ecosystems and the associated services on which humans heavily depend. A reduced emissions scenario—consistent with the Copenhagen Accord’s goal of a global temperature increase of less than 2°C—is much more favorable to the ocean but still substantially alters important marine ecosystems and associated goods and services. The management options to address ocean impacts narrow as the ocean warms and acidifies. Consequently, any new climate regime that fails to minimize ocean impacts would be incomplete and inadequate.

Inseparable, incapable, or invisible: Why public organizations award no-bid contracts

No-bid contracting is a highly prevalent practice in public procurement of technology services. Alt-hough no-bid contracting is a substantial problem since it reduces competition and welfare, the litera-ture lacks theoretical explanations and empirical tests for why public organizations award no-bid con-tracts. In this paper, we propose three theoretical explanations for no-bid contracting, drawing on transaction cost economics, organizational learning, and institutional theory. We also present how we test these explanations using a comprehensive sample of public procurement transactions. We expect to contribute theoretical explanations for no-bid contracting and practical implications for policy-makers.

Capital Accumulation in the Presence of Informal Credit Contracts: Does the Incentive Mechanism Work Better than Credit Rationing Under Asymmetric Information?

Credit markets with asymmetric information often prefer credit rationing as a profit maximizing device. This paper asks whether the presence of informal credit markets reduces the cost of credit rationing, that is, whether it can alleviate the impact of asymmetric information based on the available information. We used a dynamic general equilibrium model with heterogenous agents to assess this. Using Indian credit market data our study shows that the presence of informal credit market can reduce the cost of credit rationing by separating high risk firms from the low risk firms in the informal market. But even after this improvement, the steady state capital accumulation is still much lower as compared to incentive based market clearing rates. Through self revelation of each firm's type, based on the incentive mechanism, banks can diversify their risk by achieving a separating equilibrium in the loan market. The incentive mechanism helps banks to increase capital accumulation in the long run by charging lower rates and lending relatively higher amount to the less risky firms. Another important finding of this study is that self-revelation leads to very significant welfare improvement, as measured by consumptiuon equivalence.

Optimal Central Banker Contracts and Common Agency

This paper considers the contacting approach to central banking in the context of a simple common agency model. The recent literature on optimal contracts suggests that the political principal of the central bank can design the appropriate incentive schemes that remedy for time-inconsistency problems in monetary policy. The effectiveness of such contracts, however, requires a central banker that attaches a positive weight to the incentive scheme. As a result, delegating monetary policy under such circumstances gives rise to the possibility that the central banker may respond to incentive schemes offered by other potential principals. We introduce common agency considerations in the design of optimal central banker contracts. We introduce two principals - society (government) and an interest group, whose objectives conflict with society's and we examine under what circumstances the government-offered or the interest-group-offered contract dominates. Our results largely depend on the type of bias that the interest group contract incorporates. In particular, when the interest group contract incorporates an inflationary bias the outcome depends on the principals' relative concern of the incentive schemes' costs. When the interest group contract incorporates an expansionary bias, however, it always dominates the government contract. A corollary of our results is that central banker contracts aiming to remove the expansionary bias of policymakers should be written explicitly in terms of the perceived bias.