Subscription Mechanisms for Network Formation

We analyze a model of network formation where the costs of link formation are publicly known but individual benefits are not known to the social planner. The objective is to design a simple mechanism ensuring efficiency, budget balance, and equity. We propose two mechanisms towards this end; the first ensures efficiency and budget balance but not equity. The second mechanism corrects the asymmetry in payoffs through a two-stage variant of the first mechanism. Journal of Economic Literature Classification Numbers: C71, C72, D20.     

Managing information sharing and stewardship for public-sector collaboration: a management control approach

Information sharing is essential for public-sector collaboration but needs to be balanced with information stewardship obligations. There is little research on how public-sector managers can influence the attitudes and behaviours of their employees to achieve these competing objectives. To investigate this, the study applies a management control framework to a case study of a law enforcement organization attempting to improve its information sharing and stewardship. The study extends prior literature by providing insights into the specific effects that different management controls have for the information sharing and stewardship behaviours of employees involved in public-sector collaboration.     

Holliston Helping Hands

This case focuses on fraud investigation in a not‐for‐profit organization, along with an examination of governance and management control practices. The student assumes the role of an accountant investigating a possible fraud. The student is first presented with sample invoices paid by the organization that are fraught with irregularities and red flags of potential fraud. Drawing on the student's knowledge of control systems and corporate governance, the student's task is to identify suspicions of possible fraudulent transactions, identify key suspects, and develop an investigative plan. The class can also discuss recommendations to improve governance and control mechanisms to avoid future occurrences of fraud. The case is presented in three parts, and closely parallels a fraud investigation as additional information is revealed in each successive part of the case. This is much like peeling the layers of an onion which is a common way to describe the evolution of a fraud investigation. This case is based on a real fraud investigation conducted by one of the authors who was engaged by the province's Ministry of Health. Students who express disbelief about issues portrayed in the case can be reassured that these faithfully represent actual events.     

Mountain City Transit: Management Control and Performance Measurement

Mountain City Transit (MCT) is a short in‐class case based on a real‐life city transit department, a context with which students are very familiar. The case allows three delivery options for instructors. A first option is for instructors to use the case to introduce various elements of management control—the case is rich, thereby allowing students to identify multiple issues facing the organization. As a second option, instructors can use it as a performance management case wherein students build a balanced scorecard and receive a completed strategy map to analyze. As a third delivery option, the case can be used twice during the course, both to introduce management control and to discuss performance measurement. Students will also discuss real life implementation challenges that MCT and other organizations face.     

Accrual quality,skill, and the cross-section of mutual fund returns

We use returns of actively managed mutual funds to document the link between accrual quality (AQ) and systematic (priced) risk. Despite compelling theoretical arguments, prior research finds no evidence that poor AQ commands a risk premium in the cross-section of realized stock returns. We argue that the previously obtained premium estimates are biased downward because, for a large portion of poor AQ stocks, higher expected returns are offset by the news of deteriorating fundamentals. We suggest that skilled mutual fund managers should be able to either avoid investing in stocks with deteriorating fundamentals or assign them lower portfolio weights. As a consequence, returns on their portfolios should better reflect the expected AQ risk premium. Our empirical evidence is consistent with these predictions.     

The control dynamics of outsourcing involving an early-stage firm

Firms in the early stage of their organisational lifecycle experience challenges that shape the adoption of management controls. They are also recognised for their use of outsourcing. However, the accounting research has provided limited insight on how these control challenges and inter-organisational control concerns interact to influence the adoption of specific controls within an outsourcing relationship involving an early-stage firm. Exploration of this gap provides a key motivation for this paper. Contrary to existing management control and organisational science literature, we find a strong preference for new or enhanced action controls. Conversely, we find low levels of interest in result controls by managers within the buyer but not the supplier firm. These preferences influence inter-organisational control adoption within the frame of an incomplete outsourcing contract that emphasises flexibility in terms of relationship exit. Within the limits of a case study methodology, we argue that adoption of inter-organisational controls is shaped by tensions between the control challenges of early-stage firms, the control preferences of managers within these firms and inter-organisational control concerns. These findings have theoretical implications, expanding the Davila et al. [2009. Reasons for management control systems adoption: insights from product development systems choice by early-stage entrepreneurial companies. Accounting, Organizations and Society, 34 (3–4), 322–347] framework and the Merchant [1985. Control in Business Organizations. Boston, MA: Pitman] control typology into an ESF inter-organisational control context.     

Egalitarian equivalence and strategyproofness in the queueing problem

We investigate the implications of egalitarian equivalence (Pazner and Schmeidler in Q J Econ 92:671–687, 1978) together with queue efficiency and strategyproofness in the context of queueing problems. We completely characterize the class of mechanisms satisfying the three requirements. Though there is no mechanism in this class satisfying budget balance, feasible mechanisms exist and we characterize the set of all such mechanisms. We also show that it is impossible to find a mechanism satisfying queue efficiency, egalitarian equivalence, and a stronger notion of strategyproofness called weak group strategyproofness. In addition, we show that generically there is no mechanism satisfying both egalitarian equivalence and no-envy.     

Does international tourism affect international trade and economic growth? The Indian experience

This study attempts to investigate the relationship between international tourism, trade, and economic growth in India over the period from April 1991 to July 2012. To account for potential asymmetries in the relationship, we make use of new asymmetric Granger-causality tests and frequency analysis. We show that there is bidirectional Granger-causality between trade and tourism in positive components, whereas unidirectional Granger-causality runs from tourism to trade for negative components. Moreover, we find evidence of bidirectional Granger-causality between economic growth and tourism in positive components, but unidirectional Granger-causality running from economic growth to tourism for negative components. On the other hand, the results from frequency analysis provide evidence of Granger-causality between trade and tourism, and also between economic growth and tourism, at different frequency bands.     

The organizational antecedents of a firm’s supply chain agility for risk mitigation and response

Today’s marketplace is characterized by intense competitive pressures as well as high levels of turbulence and uncertainty. Organizations require agility in their supply chains to provide superior value as well as to manage disruption risks and ensure uninterrupted service to customers. Thus the cultivation of agility is approached as a risk management initiative that enables a firm to respond rapidly to marketplace changes, as well as anticipated and actual disruptions in the supply chain. Agility is of value for both risk mitigation and response.     

Discrete forecast horizons for two-product variants of the dynamic lot-size problem

Motivated by the recent success of integer programming based procedures for computing discrete forecast horizons, we consider two-product variants of the classical dynamic lot-size model. In the first variant, we impose a warehouse capacity constraint on the total ending inventory of the two products in any period. In the second variant, the two products have both individual and joint setup costs for production. To our knowledge, there are no known procedures for computing forecast horizons for these variants.Under the assumption that future demands are discrete, we characterize forecast horizons for these two variants as feasibility/optimality questions in 0–1 mixed integer programs. A detailed computational study establishes the effectiveness of our approach and enables us to gain valuable insights into the behavior of minimal forecast horizons.