Circuit Breakers with Uncertainty about the Presence of Informed Agents: I Know What You Know … I Think

This study conducts experimental asset markets to examine the effects of circuit breaker rules on market behavior when agents are uncertain about the presence of private information. Our results unequivocally indicate that circuit breakers fail to temper unwarranted price movements in periods without private information. Agents appear to mistakenly infer that others possess private information, causing price to move away from fundamental value. Allocative efficiencies in our markets are high across all regimes. Circuit breakers perform no useful function in our experimental asset markets.     

Work-Related Stress: An Ethical Perspective

Work-related stress is too often neglected by employers and rarely seen as an ethical issue by them. Its moral implications are explored here by the Senior Corporate Policy Manager at City and Inner London North Training and Enterprise Council, 80 Great Eastern Street, London EC2A 3DP. Sue Bryan, M.A., A.M.I.P.D., is also completing an Executive MBA degree at London Business School.     

Striving for quality: The key role of internal and external customers

This research suggests that the concept of customer orientation is at the core of a successful quality program. Based both on a series of interviews conducted at a Baldridge Award winning company and on past literature support, it is shown that in addition to an external customer orientation, an internal customer orientation plays a strategic role in the achievement of high quality standards throughout the organization. Several recommendations are proposed to foster the development of an internal customer orientation—a concept which has been largely neglected in the quality management literature.     

The effect of ocean transport costs on the demand for some Canadian exports

Zusammenfassung Die Auswirkung der Seetransportkosten auf die Nachfrage nach einigen kanadischen Exporten. — Es wird ein Querschnittsregressionsmodell entwickelt, um zu prüfen, inwieweit Seetransportkosten Exportm?rkte für bestimmte kanadische Produkte einschr?nken. Die Ergebnisse zeigen, daβ die Struktur der Ausfuhr von Weizenmehl, Whisky, Tabak, Hemlocktannen, Zeitungspapier, Stahlblechen und — b?ndern, Kupfer, Nickel und Personenkraftwagen durch Transportkosten beeinfluβt wird, nicht aber die Struktur der Ausfuhr von isolierten Dr?hten und Kabeln, Fernsprecheinrichtungen, Flugzeugmotoren, landwirtschaftlichen Maschinen und Baumaschinen. Dies wird damit begründet, daβ Ausführung, Qualit?t, Lieferfristen und Garantien für die zweite Gruppe wichtiger sein k?nnten als der Endpreis. Die Untersuchung zeigt auch, daβ ?nderungen der Transportkosten eine gr?βere Auswirkung auf die Ausfuhrstruktur haben als ?nderungen der Zolltarife (solange die Z?lle nicht diskriminatorisch sind). Der wahrscheinliche Grund hierfür ist, daβ Transportkosten einen gr?βeren Einfluβ auf die relativen Preise haben als Z?lle.

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Résumé L’effet des co?ts de la transportation océanique sur la demande de quelques exportations canadiennes. — Un modèle de coupe transversale aux équations régressives est développé pour tester si les co?ts de la transportation océanique limitent d’une mesure significative les marchés d’exportations pour quelques produits canadiens. Les résultats des régressions indiquent que la structure des exportations concernant la farine de froment, le whiskey, le tabac, la cigu?, le papier- journal, le t?le, l’acier feuillard, le cuivre, le nickel et les voitures particulières est influencée par les co?ts de transportation; tandis que la structure des exportations concernant le cable isolé, les appareils téléphoniques, les moteurs d’avion et les machines d’agriculture et de construction n’est pas affectée. Quant aux derniers produits, le dessin, la qualité, la rapidité de la livraison et les garanties peuvent être plus importantes que le prix de la livraison. Un autre résultat de cette étude est que des variations dans les co?ts de transportation ont un effet plus large sur la structure des exportations que les variations dans les tarifs douaniers (si le tarif n’est pas discriminatoire). La raison est que les co?ts de transportation exercent un plus grand effet sur les prix relatifs que les tarifs.

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Resumen El efecto de los costos de transporte oceánico sobre la demanda por algunas exportaciones canadienses. — La autora desarrolla un model de regresión de corte transversal para examinar hasta qué punto los costos de transporte oceánico limitan los mercados de exportación para algunos productos canadienses. Los resultados de las regresiones indican que las estructuras en la exportación de trigo, whisky, tabaco, cicuta, papel de periódico, chapas de acero, cobre, niquel y automóviles son afectadas por los costos de transporte, mientras que no lo son las estructuras de exportación de productos tales como alambres y cables aislantes, aparatos telefónicos, motores para aviones, maquinaria agricola y de construcción. Para estos productos parece ser que dise?o, calidad, plazos de entrega y garantías son factores más importantes que el precio de venta. The Effect of Ocean Transport Costs on the Demand for Some Canadian Exports Otro resultado del estudio es que variaciones en los costos de transporte tienen un mayor impacto sobre la estructura de las exportaciones que las variaciones en los aranceles de aduana (si estos son no-discriminatorios). La explicación seguramente es que costos de transporte repercuten mucho más en los precios relativos que aranceles.

     

An alternative test of the hedonic theory of housing markets

In this paper the hedonic theory of housing markets is used to generate a multinomial logit model of household behavior in an urban housing market. Application of hedonic theory to housing markets is by now fairly familiar and a link to multinomial logit has also been established. However, by emphasizing more heavily the bid price interpretation of hedonic theory, this paper develops a new connection to econometric estimation that essentially involves running the usual logit equations in reverse. One advantage of this approach is that the link between the logit equations and hedonic theory involves bid price rather than utility functions, and this in turn permits the empirical results to be given an extremely clear interpretation. Furthermore, in contrast to the standard logit model, the extreme value distribution required to justify the estimation technique emerges endogenously as part of the analysis.     

AUDITOR OBJECTIVITY: THE EFFECT OF PRIOR INVOLVEMENT IN AUDIT PROGRAMME DESIGN

This study tests whether the involvement of independent auditors in the design of an audit programme affects their subsequent audit work relating to that audit area. Two groups of subjects played roles in designing partial audit programmes for a particular account. They also evaluated partial audit programmes for another account designed by someone else. A third group merely evaluated partial audit programmes for both accounts. All subjects were informed that both audit programmes were implemented and of potential problems that could be attributed to either of the two accounts. Subjects were asked to allocate 15 hours to investigate either or both of the accounts in question. Our hypothesis was that auditors who had a role in designing a partial audit programme would allocate less audit effort to that account than auditors who had no role in the programme design. Comparisons of the hours allocated provided some support for this hypothesis.     

The politics and economics of decentralization

This paper analyzes a simple general equilibrium model with local public goods subject to exclusion and crowding. In general, no competitive equilibrium exists for such models. However, in this paper we study a four-person example, satisfying assumptions formulated in a paper by McGuire [Group segregation and optimal jurisdictions, J. Political Econ.82, 112–132 (1974)], in which a competitive equilibrium does exist. This example demonstrates that the model is capable of generating realistic implications regarding stratification of jurisdictions, the decision to subdivide or consolidate jurisdictions, reliance on exclusionary zoning, and the use of revenue sharing.     

Engaging students in the politics of tax policy: The tax attitudes survey project

Among other influences, the tax system of a democratic government reflects the many and varied attitudes, perceptions and values of its citizens. Understanding the determinants of attitudes and perceptions about the tax system is fundamental to understanding the dynamics and limitations of a tax system created by political processes. This paper introduces the Tax Attitudes Survey Project (TASP), which gives undergraduate students a hands-on introduction to empirical research through which they can gain a rich understanding of some of the factors, such as taxpayer attitudes and perceptions, underlying the politics of current tax-policy debates.