Managing functional diversity, risk taking and incentives for teams to achieve radical innovations

In this study we analyse the effect of team diversity, encouragement to take risks and team incentives on the degree of radicalness of innovation. Empirical research has been conducted with a sample of 95 companies from four innovative industries according to their high number of patents. The results indicate that team diversity and the combined use of long- and short-term incentives are associated with incremental innovation, whereas the development of risk-taking attitudes within the team is associated with radical innovation.     

Understanding some recent existence results for discontinuous games

We introduce a new condition, weak better-reply security, and show that every compact, locally convex, metric, quasiconcave and weakly better-reply secure game has a Nash equilibrium. This result is established using simple generalizations of classical ideas. Furthermore, we show that, when players’ action spaces are metric and locally convex, it implies the existence results of Reny (Econometrica 67:1029–1056, 1999) and Carmona (J Econ Theory 144:1333–1340, 2009) and that it is equivalent to a recent result of Barelli and Soza (On the Existence of Nash Equilibria in Discontinuous and Qualitative Games, University of Rochester, Rochester, 2009). Our general existence result also implies a new existence result for weakly upper reciprocally semicontinuous and weakly payoff secure games that satisfy a strong quasiconcavity property.     

Educational Reforms Set Professional Boundaries: The Spanish Audit Function, 1850–1988

Research on the accounting profession considers the notion of boundaries a useful, albeit wide and elusive, concept. However, recent sociological and organizational research has sharpened the concept of boundaries to enable further examination of relational processes. In this paper, we draw on this research to advance our understanding of the process of constructing boundaries in auditing. In doing so, we focus on the unique institutional conditions in Spain during the period 1850–1988. This period witnessed the overwhelming role of the State in any sphere of economic and social life. In the case of auditing, the influence of the State was augmented as the academic background became the site of influence, which resulted in educational reforms setting professional boundaries. Our findings provide some additional insights into the boundaries construction process and the dynamics of the symbolic and social boundaries contingent on the wider contexts of the audit function.     

Editorial

This article considers that the two most important current influences on the accounting profession are the development of new information technology and the elaboration of an ever more complex regulatory framework. The article examines the evolution of business reporting on the Internet and its likely consequences for accounting, accountants and assurance services provided by auditors. It then reviews the evolving regulatory framework, noting that this is reaching into new areas, including environmental reporting, social reporting and corporate governance. It concludes with an examination of the paradoxes of globalization in the context of accounting regulation.     

Existence of equilibrium in common agency games with adverse selection

We establish the existence of subgame perfect equilibria in general menu games, known to be sufficient to analyze common agency problems. Our main result states that every menu game satisfying enough continuity properties has a subgame perfect equilibrium. Despite the continuity assumptions that we make, discontinuities naturally arise due to the absence, in general, of continuous optimal choices for the agent. Our approach, then, is based on (and generalizes) the existence theorem of [Simon, L., Zame, W., 1990. Discontinuous games and endogenous sharing rules. Econometrica 58 (4), 861–872] designed for discontinuous games.     

Performance evaluation bias: A comparative study on the role of financial fixation,similarity-to-self and likeability

Performance evaluations are critical to organizational control. Dissatisfaction with systems emphasizing financial targets only has driven many companies to adopt systems using multiple performance measures. These multiple measurement systems (MMS) however may exacerbate certain cognitive biases. Using multiple performance measures can be a cognitively complex task that invites coping reactions anchored in simplifying heuristic biases, such as the likability of the target evaluatee and similarity-to-self. There are reasons to believe that these biases may manifest differently across “individualistic” or “collectivist” cultures. Our study examines three biases (financial fixation, similarity-to-self and likeability) across two distant cultures (United States and Spain) along the individualistic–collectivist dimensions. Participants are MBA students from Spain and the US. Consistent with theory-based predictions, we find that likability and similarity-to-self impact Spanish participants while financial fixation presents greater influence among US participants. These findings underscore the importance of considering national culture in designing performance measurement systems and advise about the role of specific biases, which are not culturally neutral.     

Symposium on: Existence of Nash equilibria in discontinuous games

This paper introduces the symposium on existence of Nash equilibria in discontinuous games.