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Efficiency wage theory predicts that firms can induce worker effort by the carrot of high wages and/or the stick of monitoring worker performance. Another option available to firms is to tilt the remuneration package over time such that the lure of high future earnings acts as a deterrent to current shirking. On the assumption that firms strive for the optimal trade-off between these various instruments, we develop a two-period model of efficiency wages in which increased monitoring attenuates the gradient of the wage-tenure profile. Our empirical analysis, using two cross sections of matched employer-employee British data, provides robust support for this prediction.

When immigrants experience “nationality discrimination” in the labor market, ceteris paribus their earnings are lower than native-born workers because they were born abroad. The challenge to testing for nationality discrimination is that the native/immigrant earnings gap will very likely also be influenced by productivity differences driven by incomplete assimilation of immigrants, as well as the possibility of racial or gender discrimination. There is relatively little empirical literature, and virtually no theoretical literature, on this type of discrimination. In this study, a model of nationality discrimination where customer prejudice and native/immigrant productivity differences jointly influence the earnings gap is presented. We derive an extension of Becker's market discrimination coefficient (MDC), applied to the case of nationality discrimination when there are productivity differences. A number of novel implications are obtained. We find, for example, that the MDC depends upon relative immigrant productivity and relative immigrant labor supply. We test the model on data for hitters and pitchers in Major League Baseball, an industry with a history of immigration, potential for customer discrimination, and clean detailed microdata on worker productivities and race. Ordinary least squares (OLS) and decomposition methods are used to estimate the extent of discrimination. We find no compelling evidence of discrimination in the hitter group, but evidence of ceteris paribus underpayment of immigrant pitchers. While our test case is for a particular industry, our theoretical model, empirical specifications, and general research design are quite generalizable to many other labor markets.

Most years, several AIB members are elected as AIB Fellows on account of their excellent international business scholarship, and/or past service as AIB President or Executive Secretary. The Fellows are in charge of electing Eminent Scholars as well as the International Executive and International Educator (formerly, Dean) of the Year, who often provide the focus for Plenary Sessions at AIB Conferences. Their history since 1975 covers over half of the span of the AIB and reflects many issues that dominated that period in terms of research themes, progresses and problems, the internationalization of business education and the role of international business in society and around the globe. Like other organizations, the Fellows Group had their ups and downs, successes and failures – and some fun too!

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.

We study a microfounded search model of exchange in the laboratory. Using a within-subjects design, we consider exchange behavior with and without an intrinsically worthless token object. While these tokens have no redemption value, like fiat money they may foster greater exchange and welfare via the coordinating role of having prices of goods in terms of tokens. We find that welfare is indeed improved by the presence of tokens provided that the economy starts out with a supply of such tokens. In economies that operate for some time without tokens, the later surprise introduction of tokens does not serve to improve welfare. We also explore the impact of announced changes in the economy-wide stock of tokens (fiat money) on prices. Consistent with the quantity theory of money, we find that increases in the stock of money (tokens) have no real effects and mainly result in proportionate changes to prices. However, the same finding does not hold for decreases in the stock of money.

Dewey, through his contributions to pragmatism (America’s sole original philosophy), has long been considered relative to symbolic interactionism (SI), which emerged from that philosophy. His impact on SI, while falling short of those of Mead and Cooley, has mainly come from (and has been limited to) concepts and insights developed in Human Nature and Conduct: An Introduction to Social Psychology (1922/1957) and his earlier, seminal, article, “The Reflex Arc Concept in Psychology,” published in 1896 during his tenure at the University of Chicago (1894–1904). SI, however, has wrongly ignored Dewey’s political theory, especially his concept of domination. In order to rectify this inattention, I summarize the social and historical contexts that motivated Dewey’s turn toward domination; outline the radical nature of his political theory; illustrate similarities of his political theory with Marx’s; expatiate on his concept of domination, including his argument for social practices to reduce surplus domination; and explicate the theoretical and political implications of taking his political theory seriously.

We replicate and extend the social history treatment of the Berg, Dickhaut, and McCabe (1995) investment game, to further document how the reporting of financial history influences how laboratory societies organize themselves over time. We replicate Berg et al. (1995) by conducting a No History and a Financial History session to determine whether a report summarizing the financial transactions of a previous experimental session will significantly reduce entropy in the amounts sent by Investors and returned by Stewards in the investment game, as Berg et al. (1995) found. We extend Berg et al. (1995) in two ways. First, we conduct a total of five sessions (one No History and four Financial History sessions). Second, we introduce Shannon’s (1948) measure of entropy from information theory to assess whether the introduction of financial transaction history reduces the amount of dispersion in the amounts invested and returned across generations of players. Results across sessions indicate that entropy declined in both the amounts sent by Investors and the percentage returned by Stewards, but these patterns are weaker and mixed compared to those in the Berg et al. (1995) study. Additional research is needed to test how initial conditions, path dependencies, actors’ strategic reasoning about others’ behavior, multiple sessions, and communication may mediate the impact of financial history. The study’s multiple successive Financial History sessions and entropy measure are new to the investment game literature.