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This chapter is motivated by a surprising empirical finding: During the 2008 economic crisis, leading global buyers of labor-intensive manufacturing goods were more likely to terminate contracts with suppliers based in countries with strong formal contract enforcement institutions than with those in countries where such institutions were weak. We develop a formal model that explains this counterintuitive finding as the result of heightened reliance on informal contracting when the formal contracting system is unreliable. This explanation contrasts with recent characterizations of outsourcing as an exercise of real options and adds to understanding of the effect of using relational contracting across multiple borders.

The purpose of this paper is to provide a framework for the optimal design of queueing systems of call centers with delay information. The main decisions in the design of such systems are the number of servers, the appropriate control to announce delay anticipated.

This paper models a multi-server queueing system as an M/M/S+M queue with customer reactions. Based on customer psychology in waiting experiences, a number of different service-level definitions are structured and the explicit computation of their performance measures is performed. This paper characterizes the level of satisfaction with delay information to modulate customer reactions. Optimality is defined as the number of agents that maximize revenues net of staffing costs.

Numerical studies show that the solutions to optimal design of staffing levels and delay information exhibit interesting differences, especially U-shaped curve for optimal staffing level. Experiments show how call center managers can determine economically optimal anticipated delay and number of servers so that they could control the trade-off between revenue loss and customer satisfaction.

Many results that pertain to announcing delay information, customer reactions, and links to satisfaction with delay information have not been established in previous studies, however, this paper analytically characterizes these performance measures for staffing call centers.

We examine how the ability of one actor to gain access to resources controlled by another depends on two factors: (i) the number of mutual acquaintances connecting the prospective lender and borrower and (ii) the scarcity of the resources in question. We argue that the incentives to renege on an agreement grow as the resources being traded become increasingly scarce. Mutual acquaintances, however, dampen these incentives, and therefore become more important to facilitating exchange as demand for the good of interest rises. Our analysis of qualitative and quantitative evidence from a study of senior partners at an international consultancy supports these propositions.

The purpose of this paper is to provide delay announcements for call centers with hyperexponential patience modeling. The paper aims to employ a state-dependent Markovian approximation for informing arriving customers about anticipated delay in a real call center.

Motivated by real call center data, the patience distribution is modeled by the hyperexponential distribution and is analyzed by its realistic significance, with and without delay information. Appropriate M/M/s/r+H₂ queueing model is structured, including a voice response system that is employed in practice, and a state-dependent Markovian approximation is applied for computing abandonment. Based on this approximation, a method is proposed for estimating virtual delays, and it is investigated about the problem of announcing virtual delays to customers upon their arrival.

There are two parts of findings from the results obtained from the case study and a numerical study of simulation comparisons. First, using an H₂ distribution for the abandonment distribution is driven by an empirical study which shows its good fit to real-life call center data. Second, simulation experiments indicate that the model and approximation are reasonable, and the state-dependent Markovian approximation works very well for call centers with larger pooling. It is concluded that our approach can be applied in a voice response system of real call centers.

Many results pertain to announcing delay information, customer reactions and links to estimating hyperexponential distribution based on real data that have not been established in previous studies; however, this paper analytically characterizes these performance measures for delay announcements.

Community solidarity with return migrants is commonly observed in the rural areas of developing countries. In this paper, we briefly review the evidence from sociological studies on this issue and suggest a new economic approach to such solidarity. We show that an implicit institutional arrangement, whereby migrants have no obligations (e.g., no obligation to remit) but may nevertheless enjoy equal ownership rights on collective resources upon return, enhances economic efficiency via an optimal regulation of migration flows. We also address enforceability issues since, within each generation, time consistency problems may give rise to opportunistic behavior among non-migrants.

Desai, a College Student, faced a job search dilemma. Desai applied for two internships – one with a company known for a good culture, Strategic Carrier Logistics (SCL), the other with Thijs Marketing, a company in an industry more familiar and desirable to Desai. After a number of recruitment interactions with both companies, Desai received an offer from SCL and was given two days to decide. Unsure whether Thijs Marketing would make an offer, Desai considered accepting the offer from SCL, but reneging if Thijs eventually offered a job.

The case was developed from primary sources, where “Desai’s” first-hand experience in searching for a job provides the true account of the events noted in the case. The names and demographic information for individuals were changed.

This case study is appropriate for graduate and undergraduate courses in organizational behavior (i.e. decision-making), human resources management (i.e. employee recruitment), and business ethics (i.e. ethical decision-making).

This paper aims to apply the debt sustainability framework using various ratios to review the current state of sovereign debt of Economic Community of West African States (ECOWAS) member countries.

Debt sustainability framework using various ratios (which include the present value approach, Country Policy and Institutional Assessment debt policy assessment ranking and solvency ratio of external debt) for the period 2010 and 2017 were used for the analysis to determine external debt sustainability and solvency of ECOWAS members.

The findings indicate that most ECOWAS countries are already turning at the unsustainable debt path and may renege in their debt obligations, thus creating a vicious cycle of external borrowing that could lead to capital flight.

This paper offers the empirical evidence to identify which of the ECOWAS countries are already at the threshold of external debt stress, and in the likelihood to renege on their debt obligations.

In developing countries, local buyers often rely on relational contracting based on reciprocity and trust. This paper analyzes relational contracting and global value chain (GVC) governance by focusing on how domestic and foreign coffee exporters in Rwanda confront challenges.

Semi-structured interviews were conducted with 25 representatives of Rwandan private, Rwandan cooperative-owned and foreign exporters, and four coffee sector stakeholders.

Foreign firms export most Rwandan coffee, and local exporters express concerns about their ability to compete. Rwandan exporters face challenges accessing capital, competing with foreign firms and managing high transaction costs. They use relational contracts to reduce transaction costs, and they benefit from a monopsony zoning regulation that reduces competition. Foreign exporters face regulatory challenges: a government-set coffee price and the zoning regulation. They vertically integrate to reduce costs and lock in suppliers through prefinancing.

Future research should analyze differences between local and foreign exporters in other contexts to advance understanding of the different challenges faced and contracting approaches used.

Few GVC governance studies address the role of relational contracts in contexts where enforcement is costly. Considering relational contracts within GVCs can improve value chain analysis, specifically in the developing countries where many GVCs start.