Information value and efficiency measurement for risk-averse firms

This paper has three goals. First, we demonstrate that standard arguments and methods from production and duality analysis can be used to provide a comprehensive and general treatment of the value of information for a risk-averse firm with expected-utility (linear-in-probabilities) preferences and a general stochastic technology. Second, we place bounds on the value of information for a risk-averse firm and relate these bounds to characteristics of the technology and the producer’s preferences. The third and final goal is to derive the implications that information differences can have for measured efficiency differences and to relate the bounds on the value of information to those measured differences.      

THE MANAGEMENT OF NEW OFFICE TECHNOLOGY: CHOICE, CONTROL AND SOCIAL STRUCTURE IN THE INSURANCE INDUSTRY

Amongst the growing literature on the technical and social aspects of microelectronics in work organizations, a considerable portion has direct or indirect pertinence to the question of managerial practice. That segment of the literature relating to new office technology is perhaps especially conscious of this angle — not least because this sphere of innovation has a clear bearing on the managerial role itself. Drawing both on theoretical issues extracted from this literature, and on empirical studies in three insurance companies, it is argued that while control is of crucial long-term importance in shaping the general direction of organizational change using new technology, there are sound sociological reasons why the path which is beaten out in that direction remains a far from straight one. Moreover, while differences in organizational practice between these organizations are found to exist, these appear to be associated only indirectly with the diverse levels of technological sophistication.     

Property taxes and the timing of urban land development

This paper develops an optimal timing model which extends our understanding of the effects which property taxes have on the timing of land development. Comparative static effects of changes in property tax rates are investigated and policy rules are developed for the use of differential pre- and post-development tax rates to affect the timing of development. Changes in the property tax rate are found to be non-neutral with respect to the timing of development in most cases, accelerating or delaying development depending upon specific market conditions.     

INTRODUCING MARKET FORCES INTO MANAGERIAL DECISION-MAKING IN CHINESE INDUSTRIAL ENTERPRISES

This paper focuses on the fundamental changes in the management of state enterprises that are taking place in China. Specifically, we discuss the expansion of enterprise autonomy and changes in the managerial decision-making structure. The genesis of the reform programme is traced back to inefficiencies caused by the over-centralized state planning system which reduced enterprise management to little more than an administrative function dominated by the Party secretary. As a consequence, managerial and technical cadres became demoralized and the growth of staff functions such as accounting, marketing and personnel management was stunted. From a series of experiments launched in 1978 has grown the realization that tinkering around with the state planning apparatus is insufficient to stimulate entrepreneurship and vigorous industrial expansion. Accordingly, reform has been launched on a broad front both within the state apparatus, in an endeavour to roll back external constraints on enterprise, and within the enterprise itself, by seeking to provide powerful incentives both to managerial cadres and workers through a system stressing individual responsibility and rewards commensurate with results. A number of severe constraints on the reform programme are analysed, in particular, the changing balance of power within the enterprise between the factory director, the Party secretary, the workers’congress and the trade union. Contradictions exist within the new structure of decision-making but, given a period of political stability and sustained economic growth, there should be sufficient surplus to mollify discontent and stifle those who refuse to give up their belief in the virtues of having‘politics in command’of the industrial enterprise.     

Intended electoral participation in transition countries

This paper examines the determinants of intended electoral participation. We analyze attitudes to both referenda and voting in national elections. Sample survey data are obtained from the Eurobarometer survey of transition countries in Central and Eastern Europe. The empirical results suggest that intended electoral participation increases with age, income and education. But attitudinal variables are also important and in particular confidence in the free market economy and satisfaction with the general development of the country impact positively on intended electoral participation. Received: Received: April 2003 / Accepted: August 2004, Accepted: Received: April 2003 / Accepted: August 2004, JEL Classification: H26, K42 We gratefully acknowledge the financial support of CERGE-EI. We are also grateful for the helpful comments of three anonymous referees, the journal editor and R. Filer and L. Squires.     

The impact of the WARN Act on firm value

The Worker Adjustment and Retraining Notification (WARN) Act of 1989 mandated that at least 60 days advance notice be given to employees. Critics argued that its passage would decrease managerial flexibility in closing plants, subsequently reducing firm values. This study addresses this issue by examining the stock market's reaction to announcements leading to the eventual enactment of the WARN legislation. We find evidence indicating negative effects of the legislation on stock returns of small firms.     

Residential Hedonic Models: A Rational Expectations Approach to Age Effects

This paper develops a rational expectations framework for interpreting the coefficient on age in a standard hedonic model. The model demonstrates that there are two components to the age coefficient: a pure cross-sectional depreciation component and a demand-side component that changes over time. We also show that a constant quality price index with age constant can be estimated by using any repeat sales database that contains the year of construction (or property age). When Fairfax County data are fitted to the model, the time series of age coefficients is non-stationary: they change from negative in the early 1980s to positive in the late 1980s; we infer that the demand-side component dominated in the latter period.     

Why I am a Psychology Major: An Empirical Analysis of Student Motivations

The underlying “architecture of the decision to pursue a degree in psychology was quantified using the Method of Sorting technique to identifying the critical issues necessary to make this choice. Multidimentsional scaling procedures were employed to construct a three-dimensional map representing the relationships between reasons for selecting psychology as a major. Freshman and senior psychology majors (N = 165) from a regional university and a large research-based institution rated the relative importance of items in their decision-making process. Hierarchical clustering procedures revealed seven different groups of students. Although significant differences associated with class standing were not found, institutional affiliation did influence cluster composition. Reflecting local emphases, students at the regional institution had a greater interest in Counseling Psychology, whereas those at the research-based school focused on Clinical Psychology. This semantic map and the associated item clusters arising from psychology student data provides an empirical basis for, amongst other things, course selection, faculty-initiated program design or revision, strategic niche marketing, and student retention.     

STRATEGIC INVESTMENT DECISION-MAKING: COMPLEXITIES, POLITICS AND PROCESSES*

This article is a preliminary report on an investigation into the processes of investment decision-making. Three case studies from three firms are presented which show disparities in a number of aspects of process, for example, the length of time taken to arrive at a decision, the number and intensity of disagreements and uncertainties encountered. Data were collected for these cases through semi-structured interviewing from multiple informants in the three organizations, thereby permitting the use of analysis of variance techniques of the different perspectives given by informants. Perceptions of the effectiveness of the decisions were also gathered. One finding from the study is that the decisions with the lowest perceived effectiveness (in firm HE) also lost support from those involved in making the decision during the process, although the decision was eventually implemented. This decision also had the least agreement amongst informants as to the main sources of disagreements. Informants of all three decisions saw effect upon product quality and productivity, fit with business strategy and competitive position of the company as the most important factors to take into account in evaluating the decisions. In firm CG, however, there were disagreements as to how the investment should be evaluated. In the conclusions to the article a disucssion is given as to the nature of evaluation procedures in relation to the developing theory of information systems.