CAN INEFFICIENT TRADERS CREATE VALUE?

I examine the aggregate expected profit generated by informed traders of diverse ability in a competitive market. I assume that efficient traders get perfect information on asset values whereas inefficient traders get noisy information. In the presence of order size restrictions, I show that the aggregate expected profit generated by efficient and inefficient traders together can be higher than that generated by efficient traders alone. Thus, inefficient traders can create value in a constrained trading environment.     

Condorcet efficiency of two stage constant scoring rules

Previous research has developed a representation for the Condorcet efficiency of plurality and negative plurality rules on three candidates for large electorates under the impartial culture condition. This study considers the two stage voting rules on three candidates, plurality elimination and negative plurality elimination. A representation is obtained for the Condorcet efficiency of each for large electorates under impartial culture. The Condorcet efficiencies of both rules are equal and are shown to be substantially greater than the Condorcet efficiency of plurality and negative plurality.     

Auditor conservatism and voluntary disclosure: Evidence from the Year 2000 systems issue

This study further examines the phenomenon of conservative auditor behaviour by considering the level of voluntary disclosure of Year 2000 remediation information in company annual reports. Previous studies have provided evidence of conservative auditor behaviour by examining the link between Big 6 auditor choice and accruals (Francis and Krishnan 1999; Becker et al ., 1998; Defond and Subramanyam 1998). Protecting their reputation capital increases Big 6 auditor incentives to act conservatively to avoid litigation risk. We propose and find that Big 6 auditor clients disclose more Year 2000 remediation information than non–Big 6 auditor clients.     

An Analysis of Differences in Earnings Between Small and Large Commercial Banks

This paper introduces a simple, yet rich, measure of efficiency changes based on the revenue-generating-ability (RGA) principle. Using this principle, we explain the connections between efficiency changes and the variables, such as pretax profits, interest expense, non-interest expense, profit margins, loan loss provision, and asset quality. These connections are used to explain earnings differences between small and large commercial banks.     

Talk as Technique – A Critique of the Words and Deeds Distinction in the Diffusion of Customer Service Cultures in Call Centres

ABSTRACT   This paper critically explores the common distinction made between words and deeds (or ideas and techniques) in the diffusion of management knowledge literature. The concern with whether management ideas are really being implemented in an organizational context intuitively points to the possibility of a contrast between simply talking about a practice or 'hype' and practical implementation. Drawing on empirical research on the diffusion of customer service culture in two call centres where 'verbal labour' predominates, it is argued that this distinction is important, but overdrawn. Eschewing discursive reductionism, the concepts of 'talk in work' and 'talk about work' are developed to illustrate how talk can be a technique of implementation in its own right.     

Genealogies of calculation

This paper calls firstly for genealogies of calculation, in contrast to traditional accounting history. The term genealogy conveys a focus on the outcomes of the past, rather than a quest for the origins of the present. It is intended to avoid an a priori limiting of the field of study to accounting as it currently exists, or to a particular accounting technique such as double-entry bookkeeping. And it entails an emphasis on the historical contingency of contemporary practices, a concern with the multiple and dispersed surfaces of emergence of disparate practices of economic calculation. Secondly, the paper emphasizes the discursive nature of calculation, the language and vocabularies in which a particular practice is articulated, the ideals attached to certain calculative technologies. Thirdly, the paper stresses the importance of attending to ensembles of practices and rationales that are assembled at various collective levels, rather than with isolated instances of this or that way of accounting. The delineation of the domain of traditional accounting history is illustrated by reference to three sets of issues: the links between double-entry bookkeeping and capitalism in the writings of Weber and Sombart; the links between bookkeeping practice and decision making in the writings of Yamey; and the quest for examples of “early management accounting” in the writings of those such as Edwards and Fleischman & Parker. In contrast to such concerns of accounting history, four genealogies are presented: the promotion of discounted cash-flow techniques for investment decisions in the U.K. in the 1960s; the emergence of costs in the late eighteenth century; the accounting for value added event in Britain in the late 1970s; and the construction of standard costing in the early decades of the twentieth century.     

PRINCIPAL AND AGENCY TRADES BY STOCKBROKERS ARE COMPLEMENTARY: THE WELFARE EFFECTS OF DEREGULATING AGENCY TRADING AND BANNING PRINCIPAL TRADES

This paper models the demand for stockbrokers' services in Australia, consisting of two related services, agency trades and principal trades. The relationship between agency and principal trades is estimated. The results indicate that the two services are complements rather than substitutes. Using unique accounting information, a model of agency and principal trading activities is estimated to determine the welfare effects of (i) deregulating brokerage commissions and (ii) a ban on principal trading by brokers. The results show a sizeable welfare gain to investors (amounting to about 60% of the gross revenue of brokers) stemming from deregulation of the minimum charge for agency trades. The loss in profitability by brokers due to deregulation is also computed and shown to be negligible. The results also show that due to complementarity, a ban on principal trading, even with deregulation of agency trading, can impose an arbitrarily high cost on investors which could, in principle, offset the gains from agency deregulation.