An Experimental Study of Bond Market Pricing

An important feature of bond markets is the relationship between the initial public offering (IPO) price and the probability that the issuer defaults. On the one hand, the default probability affects the IPO price; on the other hand, the IPO price affects the default probability. It is a priori unclear whether agents can competitively price such assets. Our paper is the first to explore this question. To do so, we use laboratory experiments. We develop two flexible bond market models that are easily implemented in the laboratory. We find that subjects learn to price the bonds well after only a few repetitions.     

Trading Against the Random Expiration of Private Information: A Natural Experiment

For years, the Securities and Exchange Commission (SEC) accidentally distributed securities disclosures to some investors before the public. We exploit this setting, which is unique because the delay until public disclosure was exogenous and the private information window was well defined, to study informed trading with a random stopping time. Trading intensity and the pace at which prices incorporate information decrease with the expected delay until public release, but the relation between trading intensity and time elapsed varies with traders' learning process. Noise trading and relative information advantage play similar roles as in standard microstructure theories assuming a fixed time window.     

Do HR System Characteristics Affect the Frequency of Interpersonal Deviance in Organizations? The Role of Team Autonomy and Internal Labor Market Practices

Current research on determinants of interpersonal deviant behaviors in organizations, including incivility, bullying, and sexual harassment has focused primarily on the effects of individual‐level characteristics while neglecting inter‐organizational differences in human resource (HR) systems that shape the context for employee interactions at work. Using data from a nationally representative survey of over three hundred U.S. work establishments, I find empirical support for theory‐based predictions that organizations with HR systems characterized by greater use of internal labor markets and less team autonomy are associated with lower frequencies of reported interpersonal deviance behaviors than those that rely on external labor markets and self‐managed teams.     

OBESITY AND MORAL HAZARD IN DEMAND FOR VISITS TO PHYSICIANS

In this article, we use count data regression with sample selection to analyze the effects and degree of moral hazard in demand for visits to physicians among groups of individuals with similar body mass index (BMI). Our results suggest that the effect of moral hazard on the demand for visits to doctors is increasing in BMI for men and for overweight and obese women. Moral hazard is highest among overweight men. (JEL I11, C25)     

Consumer Interest Litigation: A Case Study of Nader v. Allegheny Airlines

The Nader case highlights the related problems of airline “overbooking” and passenger “no shows,” and raises the question of what public policy should be in this area. The paper analyzes the efficiency and equity aspects of Nader's attempt to eliminate overbooking. It also focuses attention on the interplay of litigation and regulation as instruments of economic policy change.     

Global compliance with international accounting education guidelines

The International Accounting Education Guidelines (IAEG) of the International Federation of Accountants (IFAC) issued since 1982 specify the components for the Professional preparation to become a qualified accountant.

This paper presents the results of a survey of compliance conducted in fifty-four countries outside the USA with International Accounting Education Guidelines (IAEG), as issued by the International Federation of Accountants (IFAC). Its purpose is to provide a benchmark measure of compliance for current assessment of accounting education, and for reference in future studies. This study is the first attempt to examine compliance with IAEGs in all sectors of the world in which IFAC has members. The paper is divided into the following sections: international accounting education guidelines; survey questions; methodology; results; effectiveness of the guidelines, and summary and conclusions.     

Inflation,Taxation, and Interest Rates

This paper demonstrates that the response of nominal interest rates to changes in inflationary expectations should lie between that predicted by the “Fisher” and “Darby” effects. The exact nature of the response will depend on the relative size of the income and capital gains tax rates, and the relative size of the derivatives of investment and savings to their respective after-tax real rates. The other major conclusion of this paper is that capital gains taxation offsets the negative effect on investment produced by treating depreciation on a historic rather than a replacement cost basis.     

Renaissance attachment to things: material culture in last wills and testaments1

Over the past decade ‘material culture’ has become a sub‐discipline of Italian Renaissance studies. This literature, however, has focused on the rich and their objects preserved in museums or reflected in paintings. In addition, the period 1300 to 1600 has been treated without attention to changes in the relationship between people and possessions. The article turns to last wills and testaments, which survive in great numbers and sink deep roots through late medieval and Renaissance cities and their hinterlands. They reveal aspirations and anxieties about things from post‐mortem repairs to farm houses to pillows of monk's wool. These aspirations changed fundamentally after the Black Death. Earlier, during the ‘commercial revolution’, ordinary merchants, artisans, and peasants on their deathbeds practised what the mendicants preached: stripping themselves of their possessions, they converted their estates to coin to be scattered among pious and non‐pious beneficiaries. After the Black Death, testators began to reverse tack, devising ever more complex legal strategies to govern the future flow of their goods. This work of the dead had larger economic consequences. By encouraging the liquidation of estates, the earlier mendicant ideology quickened the velocity of exchange, while the early Renaissance attachment to things did the opposite.