Professor David Hojman PhD

Globalisation makes cross-cultural exchanges increasingly more important. Unfortunately there is plenty of room for misunderstanding here. Miscommunication and negotiation failure are more likely in cross-cultural, as opposed to intra-cultural settings. Part of the problem is translation. For example, there is no English word for 'terroir', which is one of the most important concepts in French wine production and marketing. Or there are no Spanish words for 'bigot', 'bluff' or 'bluff calling'. But the most serious problem may be cultural rather than translation. Words tend to exist, or not, in a particular language because somehow they are part of the respective national culture, or they are not. I am currently researching the possibility of cross-cultural communication failure arising from a well-meaning, friendly but non-literal statement, proposition, offer or compliment, which is wrongly interpreted as literal and, as a result, bluff calling, miscommunication and negotiation failure follow. A good example is the Latin American Spanish expression, 'Mi casa es su casa' (translated approximately into American English as 'Make yourself at home'). Identification of informational and cultural requirements for failure, as well as logical contradictions and possible extensions to deception or to three players, are possible. Some scholars have argued that the Falklands War could have been prevented, had the British government not misinterpreted as bluff the early Argentine statement 'The islands are ours and we will recover them at any cost'.

It has been claimed that unsuccessful populist economic policies are not always punished by voters at the next general election (the 'idea trap' and 'imperfect opinion falsification'). It has also been claimed that voters tend to forgive corrupt politicians, if other conditions are present. Corruption and economic populism tend to appear together in real-world examples of crony capitalism, where institutions are typically weak. Chile since 2014 offers a perfect natural experiment to study what happens when populist economic policies are failing and seen to fail, and eventually corruption scandals emerge, so that there is a 'before' and an 'after' the scandals, but institutions are comparatively strong. A possible conclusion of general applicability is that failing populist economic policies may be more effectively opposed by exposing the associated political corruption. This would be so, in particular, if institutions are comparatively strong (an independent judiciary, a democratic adversarial political system, and free and competitive mass media and social networks). Another possible conclusion of general applicability is that some empirical attempts at measuring voters' tolerance of corrupt politicians may be misleading, because they aggregate across many heterogeneous corrupt activities (typical of crony capitalism), and across diverse and heterogeneous actual or potential victims and beneficiaries.

The world wine industry is one of my on-going research interests. The transition away from commodity exports is a key step in a country's economic development process. This is currently happening with Chilean wine, although with important differences between the domestic and export markets. The domestic market is small, but because of high income inequality and features of the local culture, some wine brands command 'luxury' prices (50 US dollars or more per bottle). There is competition between the top brands to become the most luxurious or prestigious (and expensive) one, with some clear Veblen implications (very low price elasticity of the respective demand, or even a positively-slopped demand curve). By contrast, all the export markets are very different from the domestic market, and in particular, extremely competitive. So, there is no arbitrage or law of one price. Some Chilean wineries seem to be using the extra cash received from the very high domestic prices they charge for their top brands, in order to subsidise the same brands' exports. In some cases the domestic price is about four times the USA or UK price (using market exchange rates). On the other hand, pricing strategies are sometimes company-specific. If these general (as opposed to the company-specific) hypotheses are confirmed, it could be a possibly highly unusual case of successful exports being helped by high domestic inequalities. Or maybe not, maybe this is much more general than previously suspected?