Willingness Of Agents Research Articles

Brand Supportive Behavior among Insurance Agents in Malaysia

Brand supportive behavior is important to companies because it shows the willingness of agents to go beyond their prescribed roles for the good of the corporate brand. Hence, this study aimed to examine the relationship of internal brand orientation and customer orientation on brand supportive behavior. A research framework was established based on existing literature to test the relationship among these variables. The Social Exchange Theory were employed to explain the relationship between the variables being studied. In order to empirically test the research framework of the study, data were collected by employing a questionnaire survey. 350 respondents from the insurance industry were selected using the systematic sampling. The data collected was analyzed using the Partial Least Square Structural Equation Modelling (PLS-SEM). The empirical result revealed that internal brand orientation, customer orientation, influenced brand supportive behavior. The results of this study provide insights to managers whereby they must use appropriate applications of internal brand management practices such as internal brand orientation and customer orientation. These findings also suggest that internal brand orientation, customer orientation are crucial factors that affect the willingness of agents to commit to brand supportive behavior.

Blockchain-Enabled Trust Building for Managing Consensus in Linguistic Opinion Dynamics

To manage consensus in opinion dynamics models (ODMs), removing bias from agents' interactions and considering their willingness are critical. It can be accomplished by providing a secure mechanism that does not disclose agents' identities and opinions in their interactions, eliminating the impact of opinion similarity on trust building. To build trust and consensus opinion, we propose a linguistic ODM based on Blockchain technology. This model allows agents' opinions to be expressed using Z-numbers, as opposed to regular ODMs with numerical opinions. Agents are encouraged to modify their initial opinions in response to a minimum cost consensus model. Willingness of agents to accept or refuse the suggested modifications is realized through a Blockchain regime to avoid bias. The regime, however, must be supported by a trust-building mechanism to persuade agents to alter their opinions. To this end, we propose a Blockchain-enabled trust-building mechanism to improve agents' trust and guide them towards a consensus opinion. Following a sensitivity analysis of the underlying assumptions in the developed model, the proposed ODM is tested for its efficiency and validity.

Towards peer review as a group engagement

I discuss from an economic perspective two of the most recent suggestions to reform the peer review system: (a) payment to referees; (b) ex post peer review. I show that strong economic arguments militate against these ideas.
 With respect to payment to referees I use results from the economic analysis of prosocial behavior and the private production of public goods, which show that the supply of monetary incentives has the paradoxical effect of reducing the willingness of agents to collaborate, insofar as they substitute intrincic motivation with extrinsic motivation.
 With respect to ex post peer review, I show that it fails to offer sufficient incentives to researchers, since it is anonymous, depersonalized, and weak in its marginal impact on publishing decisions. I take this argument to criticize the lack of theorizing, in the side of radical proponents of Open access, about the conditions for transition from the subscription model to the Open model. It is this lack of critical attention to economic arguments that has led to the unintended but dramatic outcome of a net increase in the cost of scientific publishing, as documented in very recent papers.
 Finally, I advance a proposal for admitting payments to referees, but not as individuals but as groups of researchers. I offer this idea to open discussion.

Disequilibrium Trade in a Large Market for an Indivisible Good

AbstractDisequilibrium trade can occur in a market lacking both recontracting and a computational system that maps utilities into prices. This paper studies disequilibrium trade in a large market for an indivisible good. We focus on the possible speed of adjustment when arbitrage among periods is feasible and the surplus loss. We find that incentive compatible sequential trade through a disequilibrium path is only compatible with sluggish price adjustments and sufficiently impatient agents. Thus, price adjustment does not depend on excess demand alone but on arbitrage opportunities and the willingness of agents to engage on them. We find that the upper bound on the speed of price adjustment involves a lower bound for the social surplus loss, whatever the kind of rationing. The reason is that even when the market price converges to the surplus maximizing value, as it happens when rationing is efficient, some pieces of surplus are not attainable at the current period due to arbitrage. Moreover, faster price adjustments do not imply less surplus loss, because the effect of price changes on transactions via arbitrage. Finally, under weaker-than-efficient rationing there is a one period incentive compatible trading procedure in which most of the surplus is destroyed. The procedure has the property that almost every agent in the market trades.

Does peer group size influence social preferences and risk taking?

AbstractThis paper examines whether the ex post relative payoffs of peers as well as the size of the peer group impact an agent's willingness to take risks. For example, persons in a flood plain may be less likely to purchase flood insurance if their neighbors also refrain from purchasing. We generalize the Fehr‐Schmidt (1999) model to allow the intensity of the social preferences to vary with the size of the peer group. Our experiment tests whether subjects are more or less likely to choose a lottery over a fixed payment when others have been assigned either the same lottery or the fixed payment. Using both between and within subject designs, we find risk‐taking behaviour is not responsive to the risks faced by others regardless of the size of peer group.

Repeated Moral Hazard with Costly Self Control

We consider a repeated principal-agent model, where a single agent exhibits problems of self control modelled using Gul and Pesendorfer (2001) type temptation preferences. In such a setting, for a parameterized strength of self-control, we solve for the optimal multi-period contract. Our analysis identifies a new channel of principal and agent interactions, that can be used to provide incentives, this being the reduction of agent's self control costs. In fact, the principal computes (and uses) agent's most tempting item but never finds it optimal to reduce the agent's self-control cost to zero. Presence of this new channel challenges typical results obtained in models with no-temptation on the agent's side. For example, the intrinsic motivation (resulting from costly self-control) can substitute for standard (external) incentives, and hence the moral hazard problem can be mitigated (for suficiently high temptation parameter). Moreover, the optimal contract calls for a lower deferred part of the bonus (or consumption smoothing) than in the model with no temptations. Under limited commitment, presence of self-control also reduces agent's willingness to break or renegotiate the contract after output realization within some period, and make the optimal contract spot implementable (again for suficiently high temptation). Impact of self-control on the cost of implementation as well as willingness to safe/borrow is ambiguous, however.

The effect of criminal convictions on real estate agent decisions in New York City

Prior research suggests that a felony conviction limits housing opportunities. This study used an experimental audit design to determine the effect of a felony conviction on real estate agent willingness to accept prospective clients. A male and a female ‘tester’ posing as apartment seekers called real estate agents in New York City to ask for assistance renting an apartment. Conviction type was manipulated such that testers posed as non-offenders (control) or as having a prior conviction for either drug trafficking, statutory rape, or child molestation (experimental groups) to measure the extent to which offense type influenced agent responses. Analyses indicated that a prior conviction was associated with a significant decrease in agent willingness to accept prospective clients, most notably for those with child molestation conviction. Agents were more willing to help prospective clients seeking more expensive apartments, although the time of year nullified the effect of cost. The results suggest that agents may be more concerned with the financial status of prospective clients than their criminal history but market forces override their decisions to accept a client. This study has implications for the ways in which the formerly incarcerated seek housing and how policy can address housing this population.

Status Motives and Agent-to-Agent Information Sharing: How Evolutionary Psychology Shapes Agents' Responses to Control System Design

The quality of decision making within firms often depends on the willingness of agents to share information with other agents. In two studies, we examine the effects of status motives, i.e., the desire to gain the respect of and deference from others, on information sharing. We investigate information sharing in two different control systems: one in which agents receive incentives to share and one in which agents incur costs to share. We draw on theory from evolutionary psychology to argue that status motives modify agents’ responses to the control systems — specifically, constraining the willingness to share information when agents receive incentives to do so but increasing this willingness when agents incur costs to do so. We discuss the implications of our findings for information sharing, and the implications of applying an evolutionary framework of agent motivation to understand decision making in firms.

Real Options and the WTP/WTA Disparity

Presents a real options model of an agent's decision to purchase or sell a good under conditions of uncertainty, irreversibility, and learning over time. The agent's willingness to pay (WTP) and willingness to accept (WTA) contain both the intrinsic value of the good and an option value associated with delaying the decision until more information is available. The model explicitly demonstrates the effect that timing of an action can have on welfare measurement.

Loss Aversion Leading to Advantageous Selection

Some insurance markets are characterized by “advantageous selection,” that is, ex-post risk and coverage are negatively correlated. We show that expectation-based loss aversion as in K'oszegi and Rabin (2006, 2007) provides a natural explanation for this phenomenon when agents face modest scale risks. More exposure to risk has two competing effects on an agent's willingness to pay for insurance: a positive effect, as in standard expected utility models; and a negative one, due to a reference effect. We determine conditions under which an insurance provider optimally sets a high price at which only low risk agents buy.

Trust and matching algorithms for selecting suitable agents

This article addresses the problem of finding suitable agents to collaborate with for a given interaction in distributed open systems, such as multiagent and P2P systems. The agent in question is given the chance to describe its confidence in its own capabilities. However, since agents may be malicious, misinformed, suffer from miscommunication, and so on, one also needs to calculate how much trusted is that agent. This article proposes a novel trust model that calculates the expectation about an agent's future performance in a given context by assessing both the agent's willingness and capability through the semantic comparison of the current context in question with the agent's performance in past similar experiences. The proposed mechanism for assessing trust may be applied to any real world application where past commitments are recorded and observations are made that assess these commitments, and the model can then calculate one's trust in another with respect to a future commitment by assessing the other's past performance.

An agent-based model to study market penetration of plug-in hybrid electric vehicles

A spatially explicit agent-based vehicle consumer choice model is developed to explore sensitivities and nonlinear interactions between various potential influences on plug-in hybrid vehicle (PHEV) market penetration. The model accounts for spatial and social effects (including threshold effects, homophily, and conformity) and media influences. Preliminary simulations demonstrate how such a model could be used to identify nonlinear interactions among potential leverage points, inform policies affecting PHEV market penetration, and help identify future data collection necessary to more accurately model the system. We examine sensitivity of the model to gasoline prices, to accuracy in estimation of fuel costs, to agent willingness to adopt the PHEV technology, to PHEV purchase price and rebates, to PHEV battery range, and to heuristic values related to gasoline usage. Our simulations indicate that PHEV market penetration could be enhanced significantly by providing consumers with ready estimates of expected lifetime fuel costs associated with different vehicles (e.g., on vehicle stickers), and that increases in gasoline prices could nonlinearly magnify the impact on fleet efficiency. We also infer that a potential synergy from a gasoline tax with proceeds is used to fund research into longer-range lower-cost PHEV batteries.

Relational Governance and Contract Damages: Evidence from Franchising

A substantial body of theoretical, qualitative, and experimental research has investigated whether reliance on legal threats “crowds out” informal, norm‐based ways of regulating behavior or, instead, whether the ability to enforce law formally enhances the ability of private parties to use these informal approaches. There has, however, been little quantitative, real‐world work that looks into this question. This article begins this process through a study of how franchisors regulate the incentives that their franchisees have to cut corners on the brand's quality and uniformity standards. One solution to this problem is to threaten to pursue a breach of contract action for violation of these standards, which allows the franchisor to obtain a damage award against a franchisee. Alternatively, a franchisor can rely on more informal means, such as awarding an extra franchise outlet to those franchisees who behave well. There is a tradeoff between these two mechanisms; the informal rewards are costly to provide, but easy to enforce, while contractual threats are cheap, but their enforcement is expensive. Moreover, the literature on relational governance suggests that the use of formal legal threats may undermine an agent's willingness to abide by reciprocation norms along noncontractible dimensions. These theories suggest that formal and informal mechanisms will act as substitutes and this study, which uses a newly collected data set of franchise agreements, provides strong evidence for that assertion. The analytical insight that permits this inference is the presence of liquidated damages provisions as an indicator of the willingness to use formal law. Courts have shown hostility to the use of the default rule of expectation damages, but they will enforce liquidated damages terms, which means that these provisions are a credible threat to use formal legal sanctions. This study finds that a limited number of franchisors use these terms and that their presence correlates negatively and significantly with variables that are associated with informal, nonlegal means of incentivizing franchisees.

Unfair Tax Effects on Bids in an All-Pay Contest with a Possible Tie

This paper examines experimentally the effect of a different payment mechanism in the case of a tie on an agent's willingness to pay (WTP) in a winner-take-all contest. We examine how a small chance to pay tax in case of a tie affects the contest's bids. Our hypothesis is that the tax payment is perceived as unfair and as a result has a non-proportional effect on the bidders. The experimental results indicate that although the probability of a tie is quite low, the participants overweight its importance in determining their bids. As a result, they sharply decrease their bids in the case of a tax which is perceived unfair.

Volume, Liquidity, and Liquidity Risk

Why are volume and liquidity so weakly related over time? Intuition, and many classes of models, suggests it should be easier to trade when markets are more active. Yet this intuition, which works cross-sectionally, largely fails in time-series data. This paper offers an explanation for this failure based on a simple model with exogenous participation. The aggregate willingness of agents to accommodate others' trading demands (i.e. market liquidity) is determined by total participation, while volume reflects the gross flux of entering and exiting agents. More generally, liquidity reflects the average risk-bearing capacity of the economy, and volume reflects the changing contribution of individuals to that average. The model predicts that liquidity should not rise with volume. Instead, it offers a new implication: that volume is positively related to liquidity risk. Empirical evidence from the U.S. government bond and stock markets supports this prediction.

Dynamic Liquidity in Endowment Economies

While recent research has examined the asset pricing implications of systematic liquidity risk, a more basic question remains: Why does market liquidity change over time? Economy-wide fluctuations in asymmetric information, search costs, and credit conditions all may play a part. This paper highlights another potential explanation: changes in the willingness of agents to accommodate perturbations to their equilibrium portfolio holdings. I propose a natural measure of this flexibility - essentially a shadow elasticity - which, like a shadow price, is well defined whether or not trade actually occurs in the economy. This quantity characterizes the price impact or bid/ask spread that a small trader would experience, and is an endogenous function of the underlying state variables in the economy. I compute the function for some tractable example models and uncover a rich variety of predictions about liquidity dynamics that, in some cases, appear consistent with both the levels and covariations observed in the data. The results have important implications for the pricing and hedging of liquidity risk.

Motivation as a limit to pricing

A monetary reward offered by a principal tends to crowd out an agent's willingness to perform the task for its own sake (i.e. based on intrinsic motivation) if the agent's sense of recognition, fairness, or self-determination are thereby negatively affected. The crowding-out effect of pricing may also spill over into sectors where no pricing is applied ( spillover effect) if the persons affected find it costly to dinstinguish their motivations according to sectors. Motivation crowding-out and spillover narrow the scope for successfully applying monetary rewards. These theoretical claims are supported by real-life observations for environmental policy and blood donations.

The Comparative Statics of Self-Protection

The expenditure of resources to modify the probabilities of suffering losses is called self-protection.(1) As noted by Briys and Schlesinger (1990), expenditures on self-protection do not merely trade income in one state of the world for income in another as market insurance contracts do. Rather, self-protection reduces income in all states, shifting the support of the wealth distribution to the left. Hence, increases in self-protection spending do not in general lead to less risky income prospects in the sense of stochastic dominance.(2) Consequently, the willingness of agents to engage in self-protection fails to parallel agents' willingness to buy market insurance in several important respects. Both risk-loving and risk-averse agents may buy self-protection, and more risk-averse agents will not generally spend more on self-protection than less risk-averse agents.(3) This characteristic of self-protection makes its analysis considerably more difficult than that of insurance. In addition, analysis of self-protection choice must account for the fact that any agent's optimal level of self-protection spending depends on an exogenous, relationship between spending and loss probability. This relationship summarizes the agent's opportunities to reduce loss probabilities and is a critical component in determining optimal self-protection choice. The purpose of this article is to present a set of comparative static results for the simplest and most widely-used model of self-protection choice. Interest focuses on the effects of changes in initial wealth and potential losses on optimal self-protection expenditures.(4) The goal is to seek results of a general character which do not depend on the particular form of the technical relationship between spending and loss probability, nor on restrictive characterizations of agents' von Neumann - Morgenstern utility functions for wealth. Further, the main findings will be stated in terms of the characteristics of agents' attitudes towards risk in a relatively straight-forward fashion, and a set of results useful for evaluating economic problems that involve self-protection will be derived. Optimal Self-Protection Choice Consider the simplest model of self-protection choice in which an agent faces the potential of losing a fixed sum of money L. Letting [y.sub.o] be the agent's initial wealth, s her spending on self-protection, p(s) the probability of suffering the loss L given self-protection expenditure s > 0, and u(.), the agent's von-Neumann Morgenstern utility function for money, write the agent's expected utility given self-protection spending level s as v(s,L,yo), where v(s,L,[y.sup.o]) = p(s)u([y.sup.o]-s-L) + [1 - p(s)]u([y.sub.o]-s). (1) Letting y = [y.sub.o] - s, and assuming the required differentiability of p(-) and u(-), the optimal level of self-protection spending s* is given by the firstorder condition -p'(s*)[u(y) - u(y-L)l - [1 - p(s*)]u'(y) - p(s*)u'(y-L) [less than or equal to] 0, (2) with equality holding if s* > 0. The second-order necessary condition for an interior solution requires -p(s*)[u(y) - u(y-L)] + 2p'(s*)[u'(y) - u'(y - L)] + [1 - p(s*)]u(y) + p(s*)u(y-L) The first-order condition given by (2) has an immediate conventional interpretation in terms of costs and benefits: the (expected) marginal benefit of self-protection spending (-p'(s*)[u(y) - u(y-L)]) should be equal to the (expected) marginal cost of such spending ([1-p(s*)]u'(y) + p(s*)u'(y-L)) at the optimal choice s*. Comparative Static Results for Changes in Initial Wealth The initial goal is evaluating the effect of changes in the agent's initial wealth [y.sub.o] on optimal self-protection spending s*. If the purchase of selfprotection is identified with the purchase of an economic good such as a burglar alarm, security guard service, or smoke detector, then the issue of how changes in (initial) wealth [y. …

Regulation of Estate Agents: A Series of Half-hearted Measures?

The British public have long been highly dubious of the activities of that body of persons collectively known as Estate Agents. The business of acting as an agent for people wishing to sell real property has been a feature of the British market for many years. The activity, at least in the good times, can be very lucrative, featuring commissions between 1 and 2 per cent of the selling price, plus additional charges covering most of the actual costs of undertaking the activity. In English law anyone can act as an estate agent. There is no direct requirement for such a person to have acquired any qualification, nor is there any licensing requirement. Many agents are, in fact, qualified as surveyors and/or auctioneers, but this is by no means universal. The organisational structure is as varied as the qualifications of agents, varying from large coxporations down to one-man businesses. In the 1980s, estate agencies were seen as a lucrative investment by building societies and insurance companies, which bought up many agencies and amalgamated them into large chains under subsidiary companies. Many small agencies, however, still exist. It is clear that in the sale of private houses, consumers are virtually forced to employ an agent.l Thus, from a consumer viewpoint, the total honesty and integrity of the agent are essential features. This is often lacking. The scope for minor 'fiddles' is enormous and the Office of Fair Trading (OFT) has uncovered evidence of a number of activities of a more seriously fraudulent nature. It is not surprising to find that estate agents are generally regarded with extreme suspicion by the public. Their honesty is often the subject of 'music hall jokes'. Such an approach is perhaps unfair on some of the corporate agents, although even they sometimes have difficulty controlling the activities at branch level of some of those who work for them. Of course, the general law of agency is applicable to the arrangement. The estate agent is bound by a contract, express or implied, with specific limits, but in practice the contract is drafted by the agent, and will contain many terms ill-understood by the client and usually very much in favour of the agent. Any deficiencies amounting to a breach of the agency contract can be enforced by the principal in a civil action for breach of contract. However, the expense and difficulty of civil enforcement, together with the willingness of agents to appeal as far as the House of Lords on occasion,2 have made it impracticable in most cases to take this step. With this background, one might expect the sort of comprehensive regulatory approach of the legislators, as one has seen in relation to car salesmen, by the application of the criminal law3 or the more recent licensing approach in relation

The Value of a Rational Expectations Forecast in a Risky Market: A Theoretical and Empirical Approach

The central focus of this paper is to develop an easily computable money metric of an agent's willingness to pay for information under risk, to extend this concept to the market, and to demonstrate its application in a simple twoequation econometric model of the U.S. fed cattle market. The paper draws on previous contributions to the theory of competitive firm under price uncertainty, namely Rothschild and Stiglitz, Sandmo, and more recently Pope (1978, 1980) and Pope, Chavas, and Just. The latter contributions provide insight into the econometric application of the theory and into the validity of producer surplus measures of firm welfare under risk. The conceptual approach presented in this paper facilitates empirical application. For a restricted class of utility functions, it is shown that the money metric of an agent's willingness to pay for additional information can be computed from the firm's risk-averse supply or factor demand function. While other studies (e.g., Hayami and Peterson, Freebairn, DeCanio) have derived welfare estimates of the value of a fore