Decentralized trade with bargaining and voluntary matching

Rubinstein and Wolinsky (1990) study a market with one seller, two buyers, and voluntary matching. Both the competitive outcomep _c and the bilateral bargaining outcomep _b are possible in subgame perfect equilibrium. We consider two variations. First, if there is a cost larger thanp _c −p _c to the seller of changing partner,p _c is the unique outcome, otherwise no restriction expires. In the second variation the seller makes anε-binding preannouncement of whether he will change buyer after disagreement. Ifε is small there are equilibrium prices close top _c . But for anyε, if the discount factor is close to 1, the unique equilibrium price isp _c . The authors thank an anonymous referee for helpful comments.     

Predicting technical effciency in stochastic production frontier models in the presence of misspecification: a Monte-Carlo analysis

This paper provides a theoretical explanation for the sensitivity of technical efficiency measures to the choice of functional specification in stochastic production frontier models. It is shown that inappropriate functional specifications translate into a misspecification in the conditional mean of the stochastic frontier regression model. This misspecification, in turn, results in estimates of technical efficiency, confidence intervals and production elasticities being biased, even asymptotically. Monte-Carlo simulations reveal that the severity of the bias depends on the functional specification and the percentage contribution of the variance of technical inefficiency to the total variance of the composed errors.     

Flattening the organization: the effect of organizational reporting structure on budgeting effectiveness

This study investigates whether increasing a superior’s span of control improves the effectiveness of the budgeting process. We characterize the superior’s utility function as consisting of utilities for norm enforcement and wealth, leading the superior to reject profitable projects believed to contain excessive slack. We develop theory to predict that superiors become more willing to reject projects as their span of control increases. Further, subordinates anticipate superiors’ behavior and reduce slack as span of control increases. Experimental results are consistent with these predictions. As span of control increases, superiors show a greater willingness to reject projects that they believe contain excessive slack, and subordinates submit budgets with less slack. The net result is that superiors earn more profit per subordinate under an expanded span of control. Our study suggests that increasing span of control can improve the effectiveness of the budgeting process, an important component of most firms’ control environments.     

OECD unbundled local loop pricing

This study examines OECD fully unbundled and line sharing monthly wholesale prices for 2002–2008. The results are informative with economic analysis appearing to inform regulator decision making. However, with the cost proxy (viz., copper-wage relative price, population density, urbanisation and business line penetration), regulator costing methods (long run incremental and fully allocated cost), and time trend arguments only explaining approximately 40% of the price variation there remains ample unexplained variation, and political and institutional variables may help reduce this. Finally, both price series are subject to increasingly rapid value declines, although the patterns are somewhat distinct. This suggests that initial prices are truly transitory.     

External Tests of Scope and Embedding in Stated Preference Choice Experiments: An Application to Endangered Species Valuation

A criticism often levied against stated preference (SP) valuation results is that they sometimes do not display sensitivity to differences in the magnitude or scope of the good being valued. In this study, we test the sensitivity of preferences for several proposed expanded protection programs that would protect up to three US Endangered Species Act-listed species: the Puget Sound Chinook salmon, the smalltooth sawfish, and the Hawaiian monk seal. An external scope test is employed via a split-sample SP choice experiment survey to evaluate whether there is a significant difference in willingness to pay (WTP) for protecting more species and/or achieving greater improvements in the status of the species. The majority of 46 scope tests indicate sensitivity to scope, and the pattern of scope test failures is consistent with diminishing marginal utility with respect to the amount of protection to each species. Further tests suggest WTP may be proportional to the number of species valued.     

Unknown latent structure and inefficiency in panel stochastic frontier models

Journal of Productivity Analysis - This paper extends the fixed effect panel stochastic frontier models to allow group heterogeneity in the slope coefficients. We propose the first-difference...     

Assurance of Sustainability Reports: Impact on Report Users' Confidence and Perceptions of Information Credibility

This study examines whether (1) assurance, (2) the level of assurance (reasonable vs limited) and (3) the type of assurance practitioner (accountant vs specialist consultant) affect users' perceptions of reliability of sustainability reports. Based on an experimental questionnaire, we find that the provision of assurance improves perceived reliability of the environmental and social information. There are no significant main effects for both the level of assurance and type of assurance practitioner. However, a significant interaction is found between these two experimental factors and report users' perceptions of reliability of such reports. More specifically, report users place more confidence in sustainability reports when the level of assurance provided is reasonable (that is, high but not absolute), and when such assurance is provided by a top tier accountancy firm, compared to when the assurance is provided by a specialist consultant. No such difference is found when the level of assurance provided is limited for either type of assurance practitioner group. The results of this study thus highlight the relevance of assurance for sustainability reporting.     

The quality of consumption: Some Australian evidence

The paper reports new estimates of Theil's index of the quality of consumption for four age groups and at two levels of affluence (income) for Australian households over the period 1975.IV to 1982.IV with special emphasis on the role played by energy and non-energy commodity groups. The evidence reveals an improvement in the quality of consumption of energy and energy-related goods and a quality deterioration in food, clothing and rent at all income levels and for all four age groups.