This paper studies profit-maximizing seller behavior when brand image affects demand. We consider a seller facing a population of consumers with heterogeneous tastes regarding product quality and brand image. First, we analyze<I> active branding</I> by the seller through costly advertising. Our analysis shows that advertising, price, and profits are all increasing in the average valuation of brand image in the population. Second, we examine the role of<I> passive branding</I> emanating from the population's consumption of the product. We find that seller profits increase in the average degree of conformity in the population, whereas the price remains unaffected. (JEL: D42, L15, L21, M37)
We use propensity score matching methods to quantify the effects of past self-employment experience on subsequent earnings in dependent employment using data on the population of Danish men observed between 1990 and 1996. Our results generally confirm existing studies in that we find that a spell of self-employment is associated with lower hourly wages compared to workers who were consecutively wage-employed. We also show, however, that this effect disappears—and even becomes positive in some settings—for formerly self-employed who find dependent employment in the same sector as their self-employment sector. Hence, the on average negative effect of self-employment is rather caused by sector switching than by the self-employment experience per se. Moreover, formerly self-employed who either enjoyed a high income or hired at least one worker during their self-employment spell receive wages in subsequent dependent employment that are at least as high as for individuals who have been consecutively wage-employed.
Although discrimination is the most prominent explanation for the gender pay gap, studies providing conclusive evidence are scarce. This paper examines whether discrimination is less severe under performance pay than under time-based pay. To identify an external and measurable source of discrimination we exploit the variation of social norms regarding equal pay for equal work across different regions. We hypothesize the influence of social norms to be smaller in performance than time-based pay because performance pay is more closely tied to workers' productivity and thus employers have less scope for discrimination. Our empirical results show a strong and significant effect of social norms for the time-based component of pay, whereas we cannot identify such an effect for the performance-based component of pay. Therefore, our paper provides a direct proof that discrimination is less severe under performance than time-based pay.
Der weltweite Anstieg der Gehälter für angestellte Manager wird kontrovers diskutiert. Aufder einen Seite argumentieren Vertreter „optimaler Verträge“, dass der Anstieg der Gehälterdurch funktionierende Märkte verursacht ist. Aus dieser Sicht erhöhen dieInternationalisierung und Deregulierung der Märkte die Nachfrage nach talentiertenManagerinnen und Managern, welche diese Herausforderungen bewältigen. Weil dasAngebot knapp ist, steigen die Preise für solche Spitzenkräfte. Auf der anderen Seiteargumentieren Vertreter der „Machtperspektive“, dass der Anstieg der Gehälter durch dasKontrollversagen von Verwaltungsräten und Aktionären zu erklären sei. DasKontrollversagen werde verstärkt durch die Internationalisierung und Deregulierung derMärkte, welche die Komplexität der Führungsaufgabe erhöhen. Das Management kann diesausnutzen. Aus dieser Sicht sind variable Management-Kompensationen nicht bloss einMittel, um solche Kontrollprobleme zu lösen, sondern Teil des Kontrollproblems selbst. Dasvorliegende Sonderheft kontrastiert beide Sichtweisen. Das Einleitungskapitel stellt die zuGrunde liegende Argumentation beider Sichtweise dar und nimmt eine Zuordnung derBeiträge des Sonderbandes zu den beiden Sichtweisen vor.
