Effect of conformism on firm selection, product quality and home bias
This paper discusses the effect of conformism on the demand for products that differ in quality and studies its implications for firm selection, entry, average quality, and trade pat- terns. Demand for each variety is shown to fall when consumers have a lower degree of conformism or when the distribution of conformism becomes more concentrated. This in- duces firms facing lower demand and of lower quality to exit the market, which raises average quality and diminishes product diversity. In an international trade context, home consumption bias is amplified when there is a lower degree of conformism. Home con- sumption bias is mitigated by the presence of global conformism, in which individuals tend to conform to people across the world rather than within their own country.
In article discusses the impact of self-categorization on the conformal behavior and resistance to it. 61 subjects took part in the experiment. Two hypotheses were tested. 1. Conformity of behavior towards ingroup members higher than with outgroup members. 2. Perception of themselves as a member of the ingroup leads to increase of internal conformity, and perceptions of themselves as outgroup members leads to an increase in external conformity. The results showed that identification with the ingroup leads to sustainable behavior change (internal conformism). Assignment of themselves as outgroup allows the subjects to resist the influence of the group.
Although the linear-in-means model is the workhorse model in empirical work on peer effects, its theoretical properties are understudied. In this study, we develop a social-norm model that provides a microfoundation of the linear-in-means model and investigate its properties. We show that individual outcomes may increase, decrease, or vary non-monotonically with the taste for conformity. Equilibria are usually ineffcient and, to restore the rst best, the planner needs to subsidize (tax) agents whose neighbors make efforts above (below) the social norms. Thus, giving more subsidies to more central agents is not necessarily effcient. We also discuss the policy implications of our model in terms of education and crime.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.