Accounting for control and trust building in interfirm transactional relationships

This paper theorises the accounting-control-trust nexus in interfirm transactional relationships. In the context of such relationships, accounting has predominantly been conceptualised as a control technology. However, in our paper we analyse stable and durable relationships as being the results of interaction between control and trust building. Such an analysis calls for an additional conceptualisation of accounting as a trust building technology. Furthermore, we explain the interaction between accounting for control and accounting for trust building in the context of a process of embedded agency.     

Exploring the contextual and individual factors on ethical decision making of salespeople

This paper studies how salespeople make ethical decisions. For this purpose a structural model has been developed which configures how the organization's environment, the organizations's climate, and personality traits affect ethical decision making. Internal communication and the choice of a control system especially affect ethical decision making. Internal communication also affects the attraction of salespeople with unethical personality traits (Machiavellism), while the control system affects the ethical climate. Ethical climate and salespeople's personality traits also affect the ethical decision making. In fact the study shows that ethical decision making can be influenced by management.Willem Verbeke is assistant professor in marketing, School of Economics, Erasmus University, Rotterdam, The Netherlands. His research concentration is sales management.Cok Ouwerkerk is founder and director of the CSA, a consulting firm for statistical applications, in Mijnheerenland, The Netherlands. He has been involved in many research projects at different Dutch universities and firms.Ed Peelen is associate professor at the School of Economics, The University of Amsterdam, Amsterdam, The Netherlands. His research concentration is marketing management and logistics.     

Bargaining under Uncertainty and the Monotone Path Solutions

Uncertainty with respect to the feasible set of utility vectors is introduced in an axiomatic bargaining model. Given a criterion for nonprobabilistic decision-making under uncertainty, a natural efficiency requirement can be imposed on a bargaining solution. Using the maximin ordering, thestrictly monotone pathsolutions (generalizations of theegalitariansolution) to the bargaining problem are characterized as the only continuous solutions that satisfy this efficiency axiom. If the maximin criterion is replaced by the maximax ranking or a strict convex combination of the maximin and the maximax criterion, imposing our efficiency axiom and continuity leads to thedictatorialsolutions.Journal of Economic LiteratureClassification Number: C78.     

Contract renegotiation in a continuous state space

Summary. When players are unable to write complete state contingent contracts it is shown, within the context of a non-cooperative contracting-renegotiation game, that the only subgame perfect equilibrium allocations are those that correspond to the set of first-best allocations. Players are able to implement this set of allocations by signing an initial contract that is subsequently renegotiated in all states of the world. The contracting-renegotiation problem is complicated in an interesting way by assuming that the state space is continuous. The issue of the existence of an initial contract, that is subsequently renegotiated to the set of first-best allocations, must be resolved. Unlike Aghion, Dewatripont and Rey [1994], the results here do not require nor depend upon the comonotonicity of the objective functions. Received: January 27, 1995; revised version July 1, 1996     

The Capital Tax and Welfare Effects from Asymmetric Information on Equity Markets

This paper explores the implications of informational asymmetries between domestic and foreign investors for optimal capital tax rates and welfare. It adopts a model in which asymmetric information implies a home bias in equity. The paper finds that asymmetric information may raise capital tax rates by reducing the marginal cost of taxation. Furthermore, it shows that investors may gain from informational asymmetries. Although asymmetric information increases the uncertainty as perceived by investors, it may also increase tax rates and allow for a higher consumption of public goods. This reflects that asymmetric information may reduce the distortionary effects of competition among governments.     

Medicare retiree drug subsidy compliance considerations

Employers and plan sponsors have struggled with many issues associated with Medicare's retiree drug subsidy program. Recent reviews of employer methods for collecting the subsidy from the Centers for Medicare and Medicaid Services (CMS) identified significant gaps that would affect the subsidy payment and create issues in case of an audit. In fact, the Department of Health and Human Services Office of Inspector General (OIG) has placed audits of employer retiree drug subsidy processes in its work plans for 2006 and 2007. This article discusses areas that employers must address now to avoid significant long-term financial and compliance problems in the future.     

EMPLOYEE PARTICIPATION IN POLLUTION REDUCTION: A SOCIO-TECHNICAL PERSPECTIVE

Is industrial pollution reduction solely a matter of applying technical solutions to technical problems, or do organizational strategies and human factors also play an important part? In 1991 the US Environmental Protection Agency began collecting data on organizational strategies in pollution control as part of its Toxic Release Inventory database. An exploratory analysis of the 1991–1992 Toxic Release Inventory data revealed evidence that internally based, socially driven organizational strategies such as employee participation can have a dramatic impact on pollution reduction. The results are reported here of the second phase of this research: the approach is broadened to define general ‘internal’ versus ‘external’ strategies, and ‘social’ versus ‘technical’ approaches. There is strong evidence that the combination of internal and external strategies is superior to either alone; there is even stronger evidence that a socio-technical approach is better than either alone, and still stronger support for a combination of all of these criteria.     

Processing and Retrieval of Inferences and Descriptive Advertising Information: The Effects of Message Elaboration

Abstract

Two issues make advertising effectiveness difficult to assess: (1) advertising effects occur both during ad processing and when ad information is retrieved, and (2) the information that consumers derive from advertisements is likely to be some combination of explicit information and inferences. The study reported in this paper addresses these issues, examining the effects of encoding and time delay on advertising processing. Results indicate that while some types of inferences (product features) are more likely to be made under strong than weak encoding conditions, other types of inferences (consumption situation) are not affected by encoding. In addition, at the time of a decision (after a time delay), memory information use depends both upon individual brand accessibility and the relative accessibility of alternative brands in the memory set. Implications for both advertising researchers and managers are offered.