Abreu–Matsushima Mechanisms: Experimental Evidence

Abreu–Matsushima mechanisms can be applied to a broad class of games to induce any desired outcome as the unique rationalizable outcome. We conduct experiments investigating the performance of such mechanisms in two simple coordination games. In these games one pure-strategy equilibrium is “focal”; we assess the efficacy of Abreu–Matsushima mechanisms for implementing the other pure-strategy equilibrium outcome. Abreu–Matsushima mechanisms induce some choices consistent with the desired outcome, but more choices reflect the focal outcome. Moreover, “strengthening” the mechanism has a perverse effect when the desired outcome is a Pareto-dominated risk-dominated equilibrium.Journal of Economic LiteratureClassification Number: C7.     

Resolution of Demand Uncertainty and Competitive Rent Adjustment

This article shows that even when the tenants can acquire the information about rents at no cost, it is possible to get rent dispersion if there is uncertainty about the demand in the market. The equilibrium with rent dispersion has the property that rents rise with the arrival of new tenants. However, even though identical units are offered at different rents, each unit generates zero expected profits. This is because a unit offered at a high rent has a smaller probability of being rented than does a unit offered at a lower rent. If demand uncertainty is resolved sequentially, then rents reveal an increasing trend through time because units with lower rents are rented before units with higher rents. Vacancies are also possible in the current model because some of the units with higher rents might not be rented depending on the realization of total demand in the market.     

An Application of the Extended Glass and McKillop Procedure for Computing TFP Growth to the Malaysian Rice Sector

The objective of the present study is three-fold: to employ an aggregated data to investigate the total factor productivity (TFP) growth of the Malaysian rice sector; to investigate the sources of the TFP growth; and, to examine and extend the Glass and McKillop procedure for computing TFP growth. To this end, we establish several procedures which make it possible for us to: (i) link the TFP analysis with the theory of production; (ii) disentangle the sources of TFP growth into scale and technological change effects; and (iii) apply, compute, examine and extend the Glass and McKillop procedure for computing TFP growth.The finding of the study is as follows. (i) Using the standard procedure forcomputing TFP growth it was found that the average TFP growth for Malaysian rice farming was 1.37%, of which the scale effect contributed 0.29% and the remaining 1.08% was due to the technological change effect. (ii) Using the extended Glass and McKillop procedure, however, it was found that the average TFP growth, the technological change effect and the scale effect were 3.48%, 3.19% and 0.29%, respectively. (iii) Comparing these two results, derived from two different procedures, we concluded that the difference in magnitude of the TFP growth was due to the two distinct procedures for computing the technological change effect per se.     

Banking crises and financial system in Turkey

The important part of the macroeconomic policies is related to financial sector. Banking, which is a portion of this sector, takes the most important place in both the operation of economic system and the realization of the institutional or individual activities. It is well known that the foundation of banking system is based on trust, stability and strong capital formation. The birth and development of the banking sector in Turkey is relatively new. If the roots of the Turkish banking are traced, it is seen that the history goes back to the middle of the nineteenth century. Since the establishment of the Republic of Turkey, the targets of the economic development have been tried to be reached through supporting the industry and banking in the leadership of the State. But the obstacles in the financial system have limited the development of the Turkish banking sector. Since the application of the liberalization policies in the markets, particularly after 1980＇s, the banking sector has been one of the most affected sectors from the liberalization. When the fundamental problems of the Turkish banking sector have been analyzed, they can be enumerated as economic instability, being the financier of the public deficits, being too sensitive to the market risks and being fragile, high input costs, inefficient use of capital, defects in the booking system or weaknesses in the control, problems with restructuring, defects in domestic control, lack of risk management and institutional inner-management. In this study, the development of banking sector will be briefly analyzed for determined periods since 1923. The analysis will include the developments which create economic crises, the role of banks in this process, the defects of the banking sector and the financial system, and the effects of crises on the banking sector on the basis of the cause and effect relation. Economic crisis of February 2001 and the banking crisis will be examined in detail. The new arrangements after the 2001 crisis in the banking sector have been overviewed.     

Matching of Buyers and Sellers by Brokers: A Comparison of Alternative Commission Structures

This note characterizes the set of Pareto optimal and stable matchings among buyers and sellers and examines the optimality of matching strategies employed by brokers under different commission structures. It is shown that the profit-maximizing matching strategy for the broker under percentage commission and flat-fee systems also maximizes the number of houses sold, but it minimizes the buyers' and sellers' surplus. On the other hand, net listing results in the sale of fewer houses, but it yields larger surplus for buyers and sellers.     

The Impacts of Contract Type on Broker Performance

This paper offers a theoretical and empirical analysis of the exclusive agency and exclusive-right-to-sell contracts used in real estate brokerage. The theoretical model predicts that while both contract types will yield the same price, the exclusive agency contract will result in faster sales than the exclusive-right-to-sell contract. In the empirical model, we find that houses sold faster under the exclusive agency contract than the exclusive-right-to-sell contract. However, houses sold with exclusive agency contracts also sold at a marginally lower price. We also find a slightly greater concession from the listing price at the negotiation stage of exclusive agency listings.     

Analysing service quality in the UAE Islamic banks

It is generally agreed that service quality in banking is a significant issue facing this industry. The objective of this study is to analyse service quality in the UAE Islamic banks and to compare service quality between the Dubai Islamic Bank and the Abu Dhabi Islamic Bank. Linear regression results indicate that there was a positive and statistically significant relationship between overall service quality and the SERVQUAL dimensions in the UAE Islamic banks. It was also found that empathy and tangibles were the most important dimensions. ANOVA results showed that there was no significant difference between the level of overall service quality in the Dubai Islamic Bank and the Abu Dhabi Islamic Bank. ANOVA results also indicate that there was no significant difference in the level of service quality in the UAE Islamic banks based on the customer's gender and nationality. The results indicate, however, that there was a significant difference in the level of service quality in the UAE Islamic banks based on the customer's age, education and number of years with the bank.     

Could Auditing Standards Be Based on Society's Values?

One of the criticisms directed at the accounting profession is that auditing and accounting standards are subjective in nature and do not represent the society's widespread interests and values. This paper examines whether a general consensus exists regarding the significance of incorporating society's values into auditing standards. The examination revealed the lack of such general agreement and further indicated that the perceptual differences are subjective in nature and not influenced by the participant's qualifications, income, experience, gender or marital status.     

Efficiency effect of privatization in the developing countries

Privatization gained considerable momentum in the developing world in the 1980s. The motives were many, but the hope for higher economic efficiency underlined the expectations of the implementing governments and agencies in the developing countries. While the merits of a market-based economic system are well established under certain theoretical conditions, far less is known of its empirical relevance in the developing world. Yet, to the best of the author's knowledge, no empirical study has examined the macro-efficiency effect of privatization in the developing countries. Studies concerned with this issue often limit themselves to the impact of privatization at the firm level for a small number of companies and countries. Thus, the current study is an attempt to provide a systematic quantitative measure of the magnitude of the macroeconomic effect of privatization in 45 developing countries. Using the concept of frontier production function, efficiency differences between developing countries with differing degrees of private sector contribution in the economy are estimated. The empirical findings suggest, ceteris paribus, that developing countries can increase the utility of their national resources by approximately 45% simply by converting to market-based economies.