How Do Banks Determine Capital? Evidence from Germany

Abstract. We analyse whether the determinants of capital found in the previous literature hold for the special German banking sector comprising three characteristic banking groups including savings banks, cooperative banks and other banks, which differ regarding their ownership and their access to the capital market. Through the use of accounting data from German banks between 1992 and 2001 we find evidence in accordance with the buffer theory of capital for all German banking groups. Furthermore, we also detect some remarkable differences between the three banking groups regarding their determination of capital due to institutional characteristics.     

Principled moral reasoning: Is it a viable approach to promote ethical integrity?

In response to recent recommendations for the teaching of principled moral reasoning in business school curricula, this paper assesses the viability of such an approach. The results indicate that, while business students' level of moral reasoning in this sample are like most 18- to 21-year-olds, they may be incapable of grasping the concepts embodied in principled moral reasoning. Implications of these findings are discussed. James Weber is currently an Assistant Professor of Management at Marquette University. He has published articles on managerial values and moral reasoning and the teaching of business ethics in Research in Corporate Social Performance and Policy: Empirical Studies of Business Ethics and Values, International Journal of Value Based Management, Human Relations, and Journal of Business Ethics. Sharon Green is currently an Assistant Professor of Accounting at the University of Wisconsin-Madison. Her research emphasizes information processing aspects of decision making in governmental, auditing and educational contexts. Her publications have appeared in Accounting Review and Research in Governmental and Non-Profit Accounting.     

How many voters are needed for paradoxes?

Summary. This paper presents a general procedure for finding profiles with the minimum number of voters required for many important paradoxes. Borda's and Condorcet's classic examples are revisited as well as generalizations. Using Saari's procedure line, we obtain an upper bound for the minimum number of voters needed for a profile for which the Condorcet winner is not strictly top ranked for all weighted positional procedures. Also we give a simple upper bound on the minimum number of voters needed for a set of prescribed voting outcomes. In contrast to situations wherein small numbers of voters are needed, we consider paradoxes requiring arbitrarily large numbers of voters as well as large numbers of alternatives. Finally we indicate connections with statistical rank based tests. Received: April 18, 2001; revised version: May 25, 2001     

VII. Erzeugung und handle,warenmärkte

Ohne Zusammenfassung     

The high cost of accurate knowledge

Many business thinkers believe it's the role of senior managers to scan the external environment to monitor contingencies and constraints, and to use that precise knowledge to modify the company's strategy and design. As these thinkers see it, managers need accurate and abundant information to carry out that role. According to that logic, it makes sense to invest heavily in systems for collecting and organizing competitive information. Another school of pundits contends that, since today's complex information often isn't precise anyway, it's not worth going overboard with such investments. In other words, it's not the accuracy and abundance of information that should matter most to top executives--rather, it's how that information is interpreted. After all, the role of senior managers isn't just to make decisions; it's to set direction and motivate others in the face of ambiguities and conflicting demands. Top executives must interpret information and communicate those interpretations--they must manage meaning more than they must manage information. So which of these competing views is the right one? Research conducted by academics Sutcliffe and Weber found that how accurate senior executives are about their competitive environments is indeed less important for strategy and corresponding organizational changes than the way in which they interpret information about their environments. Investments in shaping those interpretations, therefore, may create a more durable competitive advantage than investments in obtaining and organizing more information. And what kinds of interpretations are most closely linked with high performance? Their research suggests that high performers respond positively to opportunities, yet they aren't overconfident in their abilities to take advantage of those opportunities.     

Competent jerks, lovable fools, and the formation of social networks

When looking for help with a task at work, people turn to those best able to do the job. Right? Wrong. New research shows that work partners tend to be chosen not for ability but for likability. Drawing from their study encompassing 10,000 work relationships in five organizations, the authors have classified work partners into four archetypes: the competent jerk, who knows a lot but is unpleasant; the lovable fool, who doesn't know much but is a delight; the lovable star, who's both smart and likable; and the incompetent jerk, who.. .well, that's self-explanatory. Of course, everybody wants to work with the lovable star, and nobody wants to work with the incompetent jerk. More interesting is that people prefer the lovable fool over the competent jerk. That has big implications for every organization, as both of these types often represent missed opportunities. Because they are liked by a disproportionate number of people, lovable fools can bridge gaps between diverse groups that might not otherwise interact. But their networking skills are often developed at the expense of job performance, which can make these employees underappreciated and vulnerable to downsizing. To get the most out of them, managers need to protect them and put them in positions that don't waste their bridge-building talents. As for the competent jerks, too often their expertise goes untapped by people who just can't put up with them. But many can be socialized through coaching or by being made accountable for bad behavior. Others may need to display their competence in more isolated settings. Intriguingly, managers aren't limited to leveraging people that others like and changing those that others loathe. They also can create situations in which people are more apt to like one another, whatever their individual qualities.     

Portfolio Choice in the Presence of Non-Tradable Income: An Experimental Analysis

Abstract. This paper reports the results of an experiment on portfolio choice in the presence of non-tradable income. The non-tradable income part could either be riskless or risky (background risk). In many cases, we observe behavior that is qualitatively consistent with the predictions of normative theory. However, correlations between financial and non-tradable wealth are neglected. The computation of aggregated risk profiles helps subjects to partly overcome the deviations from normative theory due to neglect of correlations.