Paradox,accounting values,and intelligible regulation

Expected utility theory, which includes estimating the probabilities of uncertain future outcomes, is the classical model for rational economic decision making, and, by implication, rational valuation and financial reporting regulation. In Wittgensteinian terms it is a ‘hinge’ of the language game in which these practices are embedded. When rendered explicit, however, this ‘hinge’ appears to be formally incoherent. The exploration of this problem has consequences for all of our arguments over the epistemological underpinnings of accounting reports – whether realist, representational, constructivist, or otherwise.Arguably, there are two complementary primitive models that underlie real-world probability estimation. Taken together, they generate a version of Goodman's inductive paradox (other versions of which also arise for non-inductive empirical generalisation). This, in its turn, is related to Kripke's paradox, which arises when we try to give behavioural accounts of rule following, and so of participation in a language game.This paper explicates this type of paradox in the context of commercial decision making, and considers its consequences. The existence of paradoxes should render the system that generates them completely incoherent, but (paradoxically …) they seem to be generated by any attempt to give complete accounts of some of the normative fundamentals which underlie linguistic practice – such as truth-telling, validity and rule-following.Whether or not these paradoxes represent a serious threat to the coherence of the empirical or behavioural sciences, it might be objected that commercial decision making methods and financial regulation rarely aspire to the kind of rigour that these disciplines attempt to achieve. Part of the argument of this paper will be that the intelligibility of commercial language suggests an approach to these paradoxes which is not obvious from more traditional philosophical perspectives.The intentionality of belief renders certain belief claims by participants in a shared language game incorrigible (within the game), in the sense that they can be doubted only by doubting the seriousness or quality of participation. If certain statements about rule following and word meaning have this same quality, then there is a way of avoiding the consequences of Goodman's and Kripke's paradoxes, and of sterilising the probability estimation paradox for any playable commercial language game.     

关于改进个人银行账户分类管理问题的分析

随着互联网和移动通讯技术的发展,支付领域风险范围、扩散速度、溢出效应程几何级数增长。为有效防范网络新型违法犯罪,保护人民群众财产安全和合法权益,中国人民银行相继发布了多项制度条例,全面推进个人账户分类管理。本文结合对商业银行账户分类管理专项调查结果,分析分类管理中存在的问题及原因,在此基础上,提出进一步改进个人银行账户分类管理的措施和建议。     

Personality traits,basic individual values and GMO risk perception of twitter users

Abstract

The present study investigates how the most foundational factors to individual differences – personality traits and personal values – affect the perceived safety of genetic modification and their relative importance. Publicly available communication data from 522 Twitter accounts discussing genetically modified foods and their safety was processed in two steps. First, accounts were categorized by the researchers as viewing GM foods as either safe or not safe. Second, using the IBM Watson platform, the Twitter communication data were subjected to lexical analysis to assign scores according to the Five Factor Model for personality traits and Schwartz’s basic individual values to the individual accounts. Logistic regression analyses were performed to determine how perceived GM food safety is linked to personality traits and individual values. Although both traits and values significantly contribute to explaining GM attitudes, personality traits strongly moderate the effect of individual values on risk perception.     

Public meetings about local cancer clusters: exploring the relative influence of official versus symbolic risk messages on attendees’ post‐meeting concern

Scholars have long lobbied for a view of risk communication that supplants a conventional ‘transmission’ model of risk communication with an alternative that considers the complex social environment that accompanies any risk communication effort. Along these lines, this study examines the relative influence of official health messages versus symbolic risk messages on public meeting attendees’ post‐meeting concern about cancer clusters in six US communities. As part of a larger study of cancer clusters, we obtained written responses from 125 individuals who attended a government‐sponsored public meeting in their community. We asked respondents whether attending the meeting influenced their concerns and, if so, why. The results found that, despite the largely reassuring messages that health officials were giving, most attendees reported feeling more concerned after the meetings in their communities. Regarding why, explanations that denoted symbolic risk messages – unofficial sources of risk information and procedural cues – outnumbered explanations that pointed to official risk messages – scientific presentations – by a score of three to one. The results lend support for a broader view of risk communication, which accounts not only for multiple sources of risk information but also for procedural cues regarding the trustworthiness of an investigation.     

Methods for evaluating mortality risk

An important aspect of decisions related to the long-range planning of large-scale systems, eg world energy supplies, is their possible environmental side-effects. These decisions, which potentially affect the public's health and safety, increasingly require a formal consideration of mortality risk. Several methods have been proposed for the evaluation of public programmes which probabilistically alter human mortality. This article reviews the relevant literature and the practical applications of these proposed methods. Particular emphasis is placed upon the explicit identification of the social objectives implied by their use.     

Why hard-nosed executives should care about management theory

Theory often gets a bum rap among managers because it's associated with the word "theoretical," which connotes "impractical." But it shouldn't. Because experience is solely about the past, solid theories are the only way managers can plan future actions with any degree of confidence. The key word here is "solid." Gravity is a solid theory. As such, it lets us predict that if we step off a cliff we will fall, without actually having to do so. But business literature is replete with theories that don't seem to work in practice or actually contradict each other. How can a manager tell a good business theory from a bad one? The first step is understanding how good theories are built. They develop in three stages: gathering data, organizing it into categories highlighting significant differences, then making generalizations explaining what causes what, under which circumstances. For instance, professor Ananth Raman and his colleagues collected data showing that bar code-scanning systems generated notoriously inaccurate inventory records. These observations led them to classify the types of errors the scanning systems produced and the types of shops in which those errors most often occurred. Recently, some of Raman's doctoral students have worked as clerks to see exactly what kinds of behavior cause the errors. From this foundation, a solid theory predicting under which circumstances bar code systems work, and don't work, is beginning to emerge. Once we forgo one-size-fits-all explanations and insist that a theory describes the circumstances under which it does and doesn't work, we can bring predictable success to the world of management.     

Shifting risk to the frontline: case studies in different contract working environments

An extensive body of safety literature and research discusses the integral role of rules and procedures in managing workplace hazards, ensuring worker safety, and safeguarding the environment. Nevertheless, organizational accidents and workplace injuries continue to occur, and individual employees often bear the brunt of responsibility. This paper examines how risk becomes shifted to individuals at the bottom of supply chains, focusing on two different groups of contract workers. Specifically, it draws on case studies conducted in Australia – one on civil contractors working around hazardous infrastructure and one on athletes who are subject to anti-doping requirements. A comparison of the two cases and their distinctive elements illuminates the ways in which structural pressures, organizational dynamics, and context-specific conditions influence the risks shouldered by individuals. Our analysis shows that, in both cases, adverse outcomes are widely seen as the responsibility of contract workers, prompting other actors to judge them as blameworthy. In doing so, risk in various forms (e.g. safety, financial, reputational) becomes shifted onto workers who are constrained by contracts and away from away from higher level actors and organizations that are generally in more powerful positions than frontline workers. This finding suggests that the burden of accountability and potentially liability is borne primarily by frontline workers. Because of this focus, it is easy to lose sight of organizational and structural conditions that contribute to the risks revealed at the individual level. Through an analysis of 57 interviews across both sectors, complemented by participant observations and a media review, this paper underscores the importance of critically considering not only individual worker actions, but also how regulation can support the diversion of risk, responsibility, and liability onto frontline workers.     

Florida (Un)chained

Excessively easy bank credit – visible in unusually small credit risk spreads and rapid loan growth – is often posited as a root cause of unsustainable asset price booms. This paper considers whether an increase in bank risk tolerance drove high loan growth that coincided with Florida's land boom of the mid-1920s, the first Florida housing boom in which buyers from around the nation participated. Estimates suggest that an astounding 20 million lots were offered for sale in Florida at that time. Our detailed narrative and empirical evidence suggest that the facts do not require the assumption of increased risk appetite during the boom. We find that most Florida banks that failed were associated with the Manley-Anthony chain and did not exhibit increases in observable indicators of risk during the boom. Instead, their increases in risk mainly reflected hidden choices either to lend to bank insiders on a preferential basis or to fund other banks that were engaged in such risky and often fraudulent activities. Bank regulators seem to have been complicit in the hidden risk-taking. Even informed investors would have been left in the dark about the amount of risk that was growing in Florida.     

Researching accounting in health care: considering the nature of academic contribution

As academics we naturally seek to address interesting and important questions. Our concerns for rigour drive us to work from generally accessible preoccupations towards more narrowly and precisely defined questions however. Such specialisation is properly understood as a source of strength in our knowledge. The growing impact of governance mechanisms surrounding journal rankings threatens this strength by attacking our abilities to produce, but also to integrate, the specialised contributions that we make however. This article will expand upon this basic argument and further elaborate it through a discussion of the academic literature around costing in health care.     

The end of risk communication as we know it

According to the US National Research Council, risk communication ought to be viewed as a dialogue among people conducted to help facilitate a more accurate understanding of risks and, related, the decisions they may make to manage them. But, in spite of this widely accepted perspective on risk communication, there is often a disconnect between how it is defined and how it is practiced. Rather than focusing on a true dialogue aimed at improving risk assessments and risk management decisions, risk communication is often viewed as means of simply educating people about existing risk assessments so that, on their own, they might make (or contribute to) better risk management decisions. More worrisome, risk communication is still often seen as a means of ‘correcting’ misconceptions about, or perceptions of, risk; in other words, risk communication is used as a vehicle for attempting to align lay perceptions with their expertly assessed severity. In this paper, I argue that risk communication must become more decision-focused if it is to meet the objectives set forth – in 1989 – by the US National Research Council.     

GUEST EDITORIAL: Cutting corners in chemical risk limitation

The first genetically modified crops and foods to be approved for commercial use in the European Union have prompted intense controversy. Food retailers and processors have been forced to take up the concerns voiced by their customers. New networks of groups have formed to oppose the technology. In response to these pressures, regulators who approved the products have had to reconsider questions they had previously dismissed or officially resolved. Governments have devised more precautionary measures of various kinds. For example, they have increased the burden of evidence for demonstrating safety, have broadened the practical definition of the ‘adverse effects’ which must be prevented, and have devised marketstage precautions for such effects. These extra measures manage the risk debate as well as any risks. In such ways, the technocratic model of European harmonization is being challenged and superseded. This may allow differences in national practices to be viewed as valuable expert resources for a different harmonization model, rather than as deviations from a universal rational norm. Regulatory conflicts offer precautionary opportunities, which could lead to more flexible and democratic procedures. Theoretical perspectives – on risk, uncertainty, precaution, European integration, expertise and the internal market – help illuminate these possibilities.     

Exploring the transition potential of renewable energy communities

Renewable energy communities are grassroots initiatives that invest in ‘clean energy’ in order to meet consumption needs and environmental goals and thereby – often unwittingly – conduce to the spread of renewables. Our aim in the present study is to explore the potential of renewable energy communities in the Netherlands, as social niches, to contribute to transitions in the energy system. To do so, we propose three proxies for measuring the transition potential of social niches, based on proxies for technological innovations derived from the literature. In addition, we reinterpret the notion of niches and the way transition occurs by arguing that niches are complex systems in which both technological and social innovations develop simultaneously and that during a transition entire niches link up with the regime. Furthermore, we make a distinction between internally and externally oriented niches based on their orientation and application focus. We use a comparative case study analysis complemented by a systematic literature and documentary review to show that these communities are already changing the Dutch energy system, by connecting to regime actors. Their further advancement depends on strengthening their links to established actors, but also on providing a favorable regulatory framework.     

Does risk aversion drive financial crises? Testing the predictive power of empirical indicators

There are several types of risk aversion indicators used by financial institutions. These indicators, which are estimated in diverse ways, often show differing developments, although it is not possible to directly assess which is the most appropriate. Here, we consider the most well-known of these indicators and construct others with standard methods. As financial crises generally coincide with periods in which risk aversion increases, we try to check if these indicators rise just before the crises and also if they are able to forecast crises. We estimate logit and multilogit models of financial crises – exchange rate and stock market crises – using control variables and each of the risk aversion indicators. In-sample simulations allow us to assess their respective predictive powers. Risk aversion indicators are found to be good leading indicators of stock market crises, but less so for currency crises.     

The two-fund separation theorem revisited

This paper resolves two issues regarding the traditional capital asset pricing model with one risk-free asset which seem to have been overlooked in the literature. First, it provides an elementary and complete proof of the two-fund separation theorem which accounts for the fact that asset demand may become undefined if the limiting slopes of the investor’s indifference curves are finite. Second, it shows that an additional limiting condition on investors’ risk aversions is generally necessary to guarantee existence of an equilibrium. Moreover, a generalized existence result is formulated which includes investors who in equilibrium may not invest in risky assets and a simple condition ensuring positive equilibrium asset prices is given.     

Utilitarianism and risk

Abstract

In day-to-day life, we are continuously exposed to different kinds of risk. Unfortunately, avoiding risk can often come at societal or individual costs. Hence, an important task within risk management is deciding how much it can be justified to expose members of society to risk x in order to avoid societal and individual costs y – and vice versa. We can refer to this as the task of setting an acceptable risk threshold. Judging whether a risk threshold is justified requires normative reasoning about what levels of risk exposure that are permissible. One such prominent normative theory is utilitarianism. According to utilitarians, the preferred risk threshold is the one that yields more utility for the most people compared to alternative risk thresholds. In this paper, I investigate whether and the extent to which utilitarian theory can be used to normatively ground a particular risk threshold in this way. In particular, I argue that there are (at least) seven different utilitarian approaches to setting an acceptable risk threshold. I discuss each of these approaches in turn and argue that neither can satisfactorily ground an acceptable risk threshold.     

Risk mitigation of post-earthquake fire in urban buildings

Post-earthquake fire (PEF) is considered one of the most high risk and complicated problems affecting buildings in urban areas and can cause even more damage than the earthquake itself. However, most standards and codes ignore the implications of PEF and so buildings are not normally designed with PEF in mind. What is needed is for PEF factors to be routinely scrutinized and codified as part of the design process. A systematic application is presented as a means of mitigating the risk of PEF in urban buildings. This covers both existing buildings, in terms of retrofit solutions, and those yet to be designed, where a PEF factor is proposed. To ensure the mitigation strategy meets the defined criteria, a minimum time is defined – the safety guaranteed time target – where the safety of the inhabitants in a building is guaranteed.     

Knowing stories that matter: learning for effective safety decision-making

Ongoing safe operation of hazardous industries such as hydrocarbon production and transportation, air traffic control and nuclear power generation depends on effective decision-making by those in key positions. Safety studies often focus on the extent to which actions of operational personnel in particular are dictated by procedures or rules and hence reinforce the need for compliance to ensure the best outcomes. This article directs attention to a different area – the judgements made by experts in the cases that are not covered by rules and, in particular, the key role of stories and storytelling. This ethnographic research draws on literature related to high-reliability theory, organisational learning and naturalistic decision-making to examine how experts working in diverse critical contexts use stories to share and make sense of their experiences. It argues that such stories are vital to effective decision-making as a result of both the general and specific lessons that they embody. Our analysis shows that experts use stories as parables to nurture their ability to imagine possible outcomes and maintain a safety imagination. Stories are also embedded in work practices to support decision-making in the moment. Finally, stories are strongly linked to organisational learning for experts as a group and in mentoring less-experienced colleagues. We argue that the increased focus on incident reporting systems in hazardous industries, which is driven at least in part by a consideration of organisational learning, is failing in this regard because such systems do not facilitate story-based learning. We appeal to organisations to support story-based learning with as much vigour as formal systems for professional development and reporting.     

Continuity and Discontinuity in Accounting Technology in Danish State Institutions

The development of accounting technology in the Danish state sector is characterised by episodes of disruption and the longevity of certain principles that define accounting's accountability as involved in producing the state as a unit, as providing a continuous concern for productivity, and as providing the means by which a parliamentary democracy may work. The episodes of disruption may often repair on this trinity of issues. The recent transformations are radical as they introduce a new form of management via individualised 'accounting-cultured' institutions and managers. They do so via a heightened emphasis on a core technology already in place supplemented by a new mode of output orientation rather than input orientation via a Company Accounts . In addition to reporting on spending, this set of accounts introduced a series of non-financial measures such as productivity, quality, and customer satisfaction.