Stationary solution to the overlapping generations model of fiat money: Experimental evidence

Overlapping generations model of fiat money yields an infinity of competitive equilibrium solutions, only one of which is stationary. Economies reported in this paper involved a sequence of overlapping generations of three or four individuals; each individual lived for two periods. In their young age individuals were endowed with chips that could be traded for fiat money wish the individuals of the old generation. In their old age, individuals could exchange their units o flat money for the consumption good. Results of the experiments exhibit some support for the stationary solution. The results are robust to two designs of exchange institutions (double oral auctior and supply schedule auction) and to two different endogenous ways of converting money into chips at the end of the game (average price prevailing during the last period the game is actually played and the average price forecast made during the last period the game is actually played).A preliminary version of this paper was presented at the meeting of the Economic Science Association and at the Federal Reserve Bank of Minneapolis. The authors are grateful for comments received from various participants at both presentations. Financial support was provided by the McKnight Foundation, the Honeywell Foundation, National Science Foundation (SES 89-12552), and Richard. M. and Margaret Cyert Family Funds.     

Is mandated independence necessary for audit quality?

Independence (in fact as well as in appearance) is widely thought to be necessary for the quality of audits, and audit quality is often equated with independence. Private incentives to demand (and supply) independent certification of financial statements are thought to be insufficient, thus the need to mandate independence through regulation. This study presents data from a field experiment on the unregulated market for certification of baseball cards to assess the role of independence vis-à-vis other auditor attributes such as competence, price, and service on audit quality. In our field experiment, we examine prices of baseball cards sold on eBay with or without third party certification. In addition, the certifier was either independent or deeply immersed in providing other services to market participants. We find that market participants pay a significant premium for certified cards. Certifiers who are deeply immersed (and therefore apparently less independent) also provide higher quality service in the form of being stricter graders, command larger price premiums, and dominate in market share. Implications for independence and audit quality are discussed.     

On sums and products of truncated exponential variates

Abstract

The distribution of any linear combination of a finite number of truncated exponential variates from possibly n distinct populations is obtained by using the Laplace transform. The distribution is demonstrated in a compact form which is quite suitable for computational purposes. The results are exemplified. Finally, a brief remark on the distribution of the product of truncated exponential variates is also added.     

Asymmetric wealth gains in joint ventures: Theory and evidence

I examine the causes of asymmetric wealth gains (instances where one partner gains and the other partner loses) and the extent of these gains in joint ventures. I argue that asymmetric gains arise as the common benefits created by the venture are offset by the negative wealth effects of resource appropriation for one parent. Using a sample of 412 joint ventures I find that in 42% of the ventures one parent gained and the other lost. In addition, I find that when the abnormal returns of parents within a venture were compared, firms that gained more from forming the venture experienced [−1,0] returns of +3.22% and firms that gained less experienced [−1,0] returns of −1.37%. Additional analyses showed that asymmetric wealth gains tended to occur in ventures where one parent had relatively high valued resources and the other parent had relatively lower valued resources thus suggesting that resource appropriation may be an important cause of this pattern of gains.     

Performance Management Systems in the Public Housing Sector: Dissemination to Diffusion

This article examines a case study of the implementation of a performance management system in public sector housing in Fiji. The aim is to explore and provide interpretations of why performance management and measures were introduced and implemented and reveal if the indicators were appropriate to serve the strategies of the organisation. The article draws on diffusion of innovation theory and explores the effectiveness of performance management. The research approach is qualitative in nature and uses a case study strategy. Interviews and documentary evidence provide the empirical basis for the research. The organisation has established formal objectives at both institutional and departmental levels and has a performance management system at both levels. With growing pressure for commercialisation from donor agencies, the accounting and managerial practices seem to contradict the organisation's original purpose to provide housing needs for the poor. The case study extends the literature on performance management in developing countries and illuminates the deficiencies within the performance management system. This study has implications for practitioners and researchers as it promotes a better understanding of a new public management practice technique which, in this case, was inadequate to satisfy local housing needs.     

Monopoly versus Competition in Setting Accounting Standards

Financial accounting standards are set by organizations granted a significant degree of monopoly power by various governments. While there has been considerable debate on the merits of national (e.g., US Financial Accounting Standards Board (FASB)) versus international (International Accounting Standards Board (IASB)) monopolies, little attention has been paid to the merits of using competing standard‐setting organizations (SSOs) for setting accounting standards. We compare the standard‐setting processes of the FASB/IASB to the processes of four technology‐oriented SSOs to assess the role of competition. We also provide a case study of monopoly and competitive standards in telephony. Both telephony and accounting yield some gains from coordination, and similar arguments are used (under the labels of comparability and consistency of accounting) in debates about granting a monopoly to their respective SSOs. Our results show that a group of volunteers competing with the government‐sanctioned monopoly of International Telecommunications Union transformed the telephone industry. Thanks to this standards competition, we enjoy free video internet calling and massive cost savings. Implications for accounting standard setting are discussed.     

Unbiased estimates of reliability for the truncated gamma distribution

Abstract

This paper derives the minimum variance unbiased estimate of the reliability function associated with the gamma distribution which is right truncated at a known point by using the classical minimum variance unbiased estimation method as outlined and initiated by Basu (1964). The techniques given are general and can be used to estimate not only the probability in the upper tail (reliability) of a distribution but also the probability content of any other region. In the sequel, the distribution of the minimal sufficient statistic, useful in inferential problems, is also obtained. A result of Basu is deduced as a particular case.     

Stability or growth: The rich nations’ dilemma

The article discusses the economic difficulties from which the industrialized nations have been suffering for the past years giving special regard to the controversy as to what concept of economic policy should be adopted in order to overcome the present problems.     

Toward a rapprochement between the two basic paradigms of educational research

Whereas the natural-science approach has promoted the application of the hypothetico-deductive paradigm, the humanistic approach has encouraged educational researchers to employ the interpretive/symbolic paradigm. These two paradigms are contrasting in their ontology, epistomology, human model and methodology. After comparing the perspectives of the above two approaches to educational research, some justifications have been offered for the utilization of symbolic/interpretive paradigm by emphasizing the need for naturalistic observations, qualitative data, semiotical analysis and intuitive inferences for gaining a better understanding of the teaching-learning process as also the social reality in which it takes place. Although the unification of the two approaches seems antithetical, still there are many empirical instances of the fusion between the two in the areas of perception, learning, remembering, creativity and classroom behaviour. The advantages in the integration of the two paradigms may be seen in the light of the changing conceptions of the world and models of man. For enriching educational research, we need both analytical and synthetic orientations, micro and macro data, statistical and clinical predictions, deductive and inductive inferences, as well as theoretic objectivity and practical valuations. The unification is expected to pave the way for more precision, objectivity as also synthesis in understanding different educational phenomena.