Stackelberg financial-leader in insider trading model

In this paper, we extend the Jain-Mirman [Jain, N., & Mirman, L. (2000). Real and financial effects of insider trading with correlated signals. Economic Theory, 16, 333–353, Jain, N., & Mirman, L. (2002). Effects of insider trading under different market structures. The Quarterly Review of Economics and Finance, 42, 19–39] and the Daher-Mirman [Daher, W., & Mirman, L. (2006). Cournot duopoly and insider trading with two insiders. The Quarterly Review of Economics and Finance, 46, 530–551, Daher, W., & Mirman, L. (2007). Market structure and insider trading. International Review of Economics and Finance, 16, 306–331] papers on competition, and postulate that the competition among the insiders in the financial market be Stackelberg. However, an owner high in the organizational hierarchy, who designs manager compensation mechanisms and chooses a manager to serve his purpose, should have information on the manager's reaction and act as a Stackelberg leader in the financial sector. We show that owner's profit can definitely enlarged while the manager's profits may decrease or increase depending on the variances in the two sectors, which are the exogenous parameters.     

Real and financial effects of insider trading with correlated signals

Summary. In this paper we study the real and financial effects of insider trading in a Static, Kyle-type model. In our model the insider is also the manager of the firm. Hence the insider chooses both the amount of the real output to be produced and the amount of the stock of the firm to trade. The aim of the paper is to study the relationship between financial decisions and real decisions. In particular, we examine how insider trading on the stock market affects the real output and price and how the real decision making affects the financial variables, such as the extent of insider trading, stock prices, and the stock pricing rule of the market maker. In the model, the market maker observes two correlated signals: the total order flow and the market price of the real good. We study the informativeness of the stock price and the effects on insider's profits. We also construct a compensation scheme that aligns the interests of the insider and the firm. Finally, we generalize the pricing rule set up by a competitive market maker and analyze the comparative statics of the model. Received: October 3, 1999: revised version: December 1, 1999     

Does technology licensing matter for privatization?

In mixed oligopolies, technology licensing from a cost‐efficient firm to a cost‐inefficient firm has been widely observed. This paper examines the relationship between privatization and licensing (by public or private firms) with the consideration of either a domestic or a foreign private firm. We find that (a) in the case of a domestic private firm, public licensing facilitates privatization, but private licensing hinders privatization; (b) in the case of a foreign private firm, both public and private licensing facilitate privatization. Our results yield important policy implications on privatization.     

Qualitätserwartungen und ethischer Anspruch bei der Lektüre von Blogs und von Tageszeitungen

Besides classical journalistic products, media users increasingly tend to read texts on the internet published by other users, as in weblogs. How do users navigate among these offers, how do they evaluate the quality, and which standards in terms of media ethics do they apply when reading weblogs compared to newspaper articles? Two empirical studies address these questions. In a survey, 702 internet users rated their theoretical expectations in terms of journalistic quality and compliance with ethical standards, comparing weblogs and daily newspapers. In a consecutive 2 × 2 experimental design, 120 participants read a journalistic text with varying source information (weblog/daily newspaper) and varying degree of adherence to ethical standards (ethically questionable/neutral). Participants then rated the quality of the text and its ethical standards. Results indicate that daily newspapers more than blogs are expected to deliver journalistic quality. But when read, texts are evaluated according to their content rather than their source. Ethically questionable texts in newspapers are disapproved as much as ethically questionable blog postings.     

ACTION,AGENCIES, ADVOCACY,AND ANALYSTS1

Generally speaking, human beings dislike admitting flaws in their actions. The complexities of regional development provide ample opportunity for flawed action. As public intervention in the process of economic and social development is on the upswing, serious attention must be paid to evaluations in order to minimize flaws in the programs. This paper examines three constraints to evaluation: friction generated by data collection; absence of precise goals and modus operandi coupled with continuous program modification; and role conflict within the evaluation team. The difficulties with data lie in the definition of regional boundaries and hostility of the people resulting from normlessness and government involvement. Regional survey research centers are suggested to mitigate the problem. The second conistraint exists because of the sensitivity of program administrators to critical evaluation. They react with vague, general, and illusory goals, discounting and negation of results, and the concept of a pilot study from which “lessons learned always justify a program.” Long-run conditioning and public relations may be the only effective policies to relieve this constraint. The third constraint of role conflict has always existed but is particularly important when changes in programs derive from their evaluations. The solution is for our professions to insist on full public disclosure of results coupled with triyearly turnover of evaluation personnel. De façon générale, les humains détestent avouer leurs fautes. he dévelop-peraent régional étant trés complexe, beaucoup ?actions enterprises pourront s'avérer défectueuses ou néfastes. intervention publique dans le processus de développement économique et social se faisant peu fréqtiente, une attention spéciale et constante doit être apportée aux évaluations visant. à minimiser les erreurs dans les programmes. Cet article eiamine trois contraintes propres à?évaluation: obstacles crées par la cueilette des données; absence de buts prés et de modus operandi joints à une modification continuelle du programme; et conflit de rôle dans ?équipe ?évaluation. Les difficultés avec les données sont liées à la délimitation des régions et à?hostilityé des gens résultant de ?absence compléte de normes et de ?ingérence gouvernementale dans la vie privée. Pour résoudre le probléme, on suggére des centres ?enquétes et de recherches régionaux. La seconde contrainte vient du fait que les administrateurs de programme sont sensibles à une évaluation critique. lis répondent avec des buts vagues, généraux et illusoires; Us ne nient pas les résultats mais n'acceptent pas le concept ?une étude pilote óu “Les resultats obtenus justifient toujours un plan ?amélioration.” Un conditionnement à long terme et des relations extérienres peuvent être les settles politiques efficaces pour parer à cette contrainte. La troisiéme, due au conflit de rôle, a toujours existé mais elle est particu-liérement importante quand les modifications de programme dérivent de leurs évaluations. La solution serait que les associations professionnelles insistent sur une divulgation compléte des réstultats au public ainsi qu'un renouueUement du personnel ?évaluation tous les trois ans.     

Inflation forecasts,the expected real rate and information efficiency

This paper examines the inflation forecast accuracy and rationality of a time series predictor, an expected inflation series constructed from surveys undertaken by the University of Michigan's Institute for Social Research, and the yield on U.S. Treasury bills. A quadratic loss function is assumed, and Theil's inequality ratios are used to decompose the mean squared foreast error (MSE). Although it is the only unbiased forecast, the time series predictor does not appear to be optimal during the recent period of turbulent inflation. As for bias in the other series, the surveys are inconsistent with weak-form rational expectations and the Treasury bill is reflecting variations in more than one factor. In an examination of the latter under the assumption of no liquidity premium, the results suggest that the forecast error is in part attribute to moderate variation in the expected real rate. Given the minimal cost of observing the Treasury bill yield, the findings of this study suggest that the market, although imperfect, has performed reasonably well in forecasting inflation.