Design of public procurement auctions: evidence from cleaning contracts

We analyze a regime change from beauty contests to first‐price sealed‐bid and scoring auctions, using Swedish data on public procurement of cleaning services. In beauty contests, the lowest bid often lost, leaving substantial money on the table. The procurement costs were similar before and after the regime change: (i) Entry strongly decreases the procurement cost but did not change. Entry would have decreased had the municipalities not adjusted the objects of auctions. (ii) Municipalities favored in‐house suppliers in the old regime, leading to more aggressive bidding by others. With favoritism reduced, these changes balanced each other out.     

The Federal Reserve’s balance sheet and overnight interest rates: Empirical modeling of exit strategies

This paper provides a comprehensive study of the interplay between the Federal Reserve’s balance sheet and overnight interest rates. We model both the supply of and the demand for excess reserves. Treating outright securities holdings of the Federal Reserve as a policy tool, we estimate the effects of unconventional monetary policy on overnight funding rates. Further, we offer the first empirical assessment of the FOMC’s principles of the exit strategy. Assuming a path for removing monetary policy accommodation that is consistent with the FOMC’s exit principles, we project that the federal funds rate increases to 70 basis points by 2016, settling in a corridor bracketed by the discount rate and the interest rate on excess reserves, as excess reserves of depository institutions decline to near zero.     

Integrating competing conceptions of risk: A call for future direction of research

The goal of this paper is to propose a theoretical framework that integrates between what has been traditionally presented in the risk literature as two opposing perspectives: the positivist‐probabilistic and the contextualist. Acknowledging the differences between the two, we argue that a reconciliation of both could deepen and expand our understanding of risk, enlarge the scope and utilization of research methodologies, and bridge the gap between lay people's and experts' conceptions of risk. This line of thinking reflects a dialectical approach in suggesting integration (‘synthesis’), while acknowledging the existence of differences and oppositions (‘antitheses’). In 1986, Bruner's conceptualization of two irreducible, and at the same time, possibly integrated modes of thought can serve as a promising direction for researching risk. We further suggest how this line of thinking can be integrated utilizing the mixed‐method design in the study of risk. We claim that the positivist‐probabilistic and contextualist perspectives represent two different approaches to understanding and studying risk, and that any attempt to reduce or ignore one at the expense of the other would result in a limited understanding of the phenomenon.     

Bought deals: The value of underwriter certification in seasoned equity offerings

The bought deal is the predominant method of underwriting SEOs in Canada. Offer prices are set and underwriters commit to purchase offerings several days earlier for bought deals than for firm commitment issues, implying stronger underwriter certification for bought deal issues. Consistent with the certification hypothesis, this study finds a significantly smaller negative stock price reaction around the announcement of bought deals compared to firm commitment issues. Bought deals are further shown to have smaller offer price discounts and smaller underwriting fees, implying superior pricing and thus, higher quality offerings. These findings suggest that investment banks’ underwriting method of choice is informative of issue quality.     

投资者保护与创业

我们通过私募资金市场(private capital mar- ket)搜寻模型的均衡,来研究投资者保护对外部融资可得性(availability)、企业家才能(entrepreneurship)和创业所产生的影响。除了搜寻成本(friction)之外,我们还考察了合约成本,特别是由于企业家(entrepre- neur)可能侵夺融资人(financier)所导致的事中和事后(expost)道德风险问题。在我们的模型中,政府选择投资者保护水平,以确定项目盈余(match surplus)在创业者与融资人之间的可转让性。结果表明任何鼓励(抑制)企业家才能的做法也会鼓励(抑制)创业。因此,投资者保护的创业效应取决于各种搜寻成本和合约成本的相对影响。只有当投资者保护对与事中道德风险相比的事后道德风险问题产生更大的影响时,加强投资者保护才能促进创业。我们也发现搜寻成本削弱了投资者保护的积极效应,同时,合约成本则修正了标准的荷氏(Hosios)效率条件。     

Survey data and Bayesian analysis: a cost-efficient way to estimate customer equity

We present a Bayesian framework for estimating the customer lifetime value (CLV) and the customer equity (CE) based on the purchasing behavior deducible from the market surveys on customer purchasing behavior. The proposed framework systematically addresses the challenges faced when the future value of customers is estimated based on survey data. The scarcity of the survey data and the sampling variance are countered by utilizing the prior information and quantifying the uncertainty of the CE and CLV estimates by posterior distributions. Furthermore, information on the purchase behavior of the customers of competitors available in the survey data is integrated to the framework. The introduced approach is directly applicable in the domains where a customer relationship can be thought to be monogamous. As an example on the use of the framework, we analyze a consumer survey on mobile phones carried out in Finland in February 2013. The survey data contains consumer given information on the current and previous brand of the phone and the times of the last two purchases.     

Economics of venue selection for special sporting events: With special reference to the 1996 Melbourne grand prix

Venue selection for major sporting attractions can be a highly politicized decision making process. Due to the sometimes controversial nature of venue selection, politicians can be circumspect on related issues including potential economic impacts. This was the case with the Australian Formula 1 Grand Prix held at Albert Park, Melbourne in March 1996. Comments provided by the authorities on matters associated with the venue selection referred to both the opportunity to showcase Melbourne on international and national television due to the proximity of Albert Park to the Melbourne skyline as well as referring to the fact that the Australian Grand Prix had been conducted at Albert Park in the 1950s and therefore the race could be said to be returning home! However, limited details have been made public regarding the financial aspects of the event. A real challenge was to estimate expenditure by the visitor and the indirect economic benefits on regional economies in the absence of formal data. In the aftermath of the event, however, the media amply reported estimated figures for gross economic gains attributable to the Grand Prix. This paper argues that it is possible to use these estimates of gross economic gains, as reported by the media, to derive the direct contribution of this event This paper investigates the comparative benefits of an alternative venue, such as Sandown Park in the Eastern region and concludes that the higher multiplier effects evident in the Melbourne Metropolitan Region ensured that any decision made on economic grounds would favor Albert Park over outlying regions.     

Factors influencing plagiarism by accounting lecturers

This study examines the possible factors affecting plagiarism by accounting lecturers in the Special Region of Yogyakarta, a province in Indonesia. 108 completed questionnaires were quantitatively analyzed. The multiple regression analysis reveals that working pressure and unfair competition significantly influence the intention to undertake plagiarism. These results indicate that Fraud Triangle theory partially explains the phenomenon of plagiarism among accounting lecturers. The main implication of this research is that accounting lecturers have overload works in their daily activities so that they do not have enough time to write scientific works professionally. Another implication is the presence of an unfair competition among accounting lecturers so that in order to meet the publication target, plagiarism becomes a way. The important contribution of this paper is the finding regarding the influences of working pressure and unfair competition on plagiarism by accounting lecturers.     

Critical reading in accounting

The wave of postmodernism has reached accounting studies. With it that wave has brought new thought provoking and inspiring ideas such as: the local determination of meaning and the proposition that meaning of signs comes from other signs, not from reality. However, if these ideas are left abstract, they may not inspire accounting education with their full potential. Hence, this paper offers a three-stage framework of analysis, the so-called strategy of critical reading, which draws upon ideas of postmodernism and hermeneutics. The framework suggests how the reading of accounting texts could find new insights from postmodern ideas, without lapsing into a linguistic idealism that would deny the world any external reality independent of language.