The effects of casino gambling on state tax revenue

A theoretical model of state tax structure implies that revenue enhancement due to the introduction of casino gambling is less likely in states where incomes taxes do not exist and where casino tax rates are lower than the corresponding tax rates on sales taxable and excise taxable goods. Further, it is clear that casino gambling is likely to adversely impact lottery tax revenues earmarked for education. Due to the cross-price effects of gambling, tax revenues will likely decline in states that introduce nontaxable casino gambling on Indian reservations. In the longer term, as casino gambling proliferates increasing competition among states, there will be negative revenue consequences due to fewer tourism and employment dollars.     

Adverse selection as an explanation of credit rationing and different lender types

An adverse selection model is utilized to demonstrate that informational asymmetry may make it wealth optimal for the financial intermediary (FI) to credit ration and to rationalize the existence of different lenders in the credit market. The crucial assumption is that borrowers differ in their tolerance for a lender-imposed default penalty, the severity of which also varies with the lender. The credit rationing portion proves that the FI will: 1) be forced by a binding regulatory constraint to overinvest in capital; 2) ration its worst risk class borrowers; 3) establish its optimal loan interest rate on the basis of the average quality of its loans and the interest rate elasticity of the borrower demand in its best risk category; and 4) decrease the total loan volume and increase the loan interest rate due to an increase in the capital requirement, but the effect on the default risk quality of its loan portfolio is ambiguous. The existence result is that if a lender has a high default penalty, he can charge a lower rate and attract only “good” borrowers, i.e., heterogeneous lender types encourage the screening of borrowers and vice versa.     

How deficiencies in motivation to manage contribute to the United States' competitiveness problem (and what can be done about it)

Data are presented to support the argument that motivation to manage is a major cause of managerial effectiveness, that it declined sharply in the college population during the activism of the 1960s and early 1970s, and that it is now severely lacking in the United States relative to many other countries. Thus America's competitiveness problems appear to be largely motivational in nature. Possible solutions are discussed, including recruiting and selecting for managerial motivation, increasing motivation to manage using training and development techniques, and changing organizational designs (telescoping the scalar chain, moving managerial tasks into non-managerial positions, resorting to professional forms, and expanding venture structures). © 1995 by John Wiley & Sons, Inc.