Extracting the information: espionage with double crossing

This paper addresses two very old issues in human society: espionage and double crossing. Our major conclusion points out that there will be a serious over rewarding problem in the direct mechanism due to double crossing in espionage, and a competitive mechanism with a relative performance regime can possibly mitigate the over rewarding problem and still extract the information.      

A generalization of Condorcet’s Jury Theorem to weighted voting games with many small voters

We extend Condorcet’s Jury Theorem (Essai sur l’application de l’analyse à la probabilité des décisions rendues à la pluralité des voix. De l’imprimerie royale, 1785) to weighted voting games with voters of two kinds: a fixed (possibly empty) set of ‘major’ voters with fixed weights, and an ever-increasing number of ‘minor’ voters, whose total weight is also fixed, but where each individual’s weight becomes negligible. As our main result, we obtain the limiting probability that the jury will arrive at the correct decision as a function of the competence of the few major players. As in Condorcet’s result the quota q = 1/2 is found to play a prominent role. I wish to thank Maurice Koster, Moshé Machover, Guillermo Owen and two anonymous referees for helpful comments.     

Background Risk and the Performance of Insurance Markets under Adverse Selection

Background risk can influence the performance of insurance markets that must deal with adverse selection when applicants are risk vulnerable, since they are more averse to bearing the insurable risk as a result of their exposures to background risk. We show that background risk always results in a lower deductible for the incentive constrained contract, and that a broader range of markets attains the stable sequential equilibrium cross-subsidized pair of separating contracts. We conclude that background risk always improves the performance of markets for coverage against (insurable) foreground risks that must deal with adverse selection. We also find, however, that these improvements are never sufficient to offset the cost to insureds of bearing the background risk.     

Assessing Applied Protection across the World*

This paper presents MAcMap–HS‐6, a database providing a consistent, ad valorem equivalent measure of tariff duties and tariff rate quotas for 163 countries and 208 partners, at the six‐digit level of the Harmonized System (5111 products), accounting for all preferential agreements. We describe the methodology used to compute and aggregate an ad valorem equivalent of applied protection. Emphasis is placed on minimizing the endogeneity bias in the aggregation procedure, while acknowledging structural differences in export specialization. The resulting quantitative assessment is illustrated by giving an overview of applied protection across the world in 2001, in terms of average as well as distribution.     

Domestic Support and Border Measures for Processed Horticultural Products

In horticultural markets, trade barriers often apply to the processed products whereas domestic support applies to farm-produced raw commodities. Here we assess the effects of such trade barriers and domestic support by simulating the effects of policy reform on global processing tomato markets, which are faced with modest processed product tariffs and high domestic support in the European Union (EU). Both protection and EU subsidy drive down world welfare, but we find that reducing import tariffs for tomato products would yield greater effects on markets and larger welfare impacts outside Europe than would reductions in EU domestic support.     

Predicting the budgetary funding need of education in the three-year budget for 2008–2010

The paper presents a technique developed by the authors, which makes it possible to determine the necessary amount of financing for education at all the budget system levels for 2008-2010, based on the Russian average value of financing, taking into account the budget expenditures index for two variants of student population, i.e. the actual number of on-budget students and the number of students required to meet the economy’s need for trained workers. The technique was developed and the calculations were made on the basis of Russian long-term forecasts and the Russian three-year federal budget for 2008–2010.     

Issues Facing Small Accounting Practices in Regional North Queensland: An Exploratory Study

Small accounting practices (SAP), most of which are sole principals, are an important part of the accounting profession and the Australian economy. This exploratory study identifies issues and challenges experienced by small accounting principals in Far North Queensland, Australia. The findings generally correspond with previous research, ranking staffing and keeping up to date through professional development as key areas of concern, and also highlighting the expectation gap between SAP principals and their clients. Stress emerged as a major concern for principals, and new areas of possible conflict of interests were uncovered. A number of potential areas for future research, including comparative studies in city and suburban areas, have been identified.     

Financial Development and Economic Growth: Empirical Evidence from Six MENA Countries

This paper examines the causal relationship between financial development and economic growth for six Middle Eastern and North African countries (Algeria, Egypt, Israel, Morocco, Syria, and Tunisia), within a quadvariate vector autoregressive framework. We employ four different measures of financial development and apply the augmented vector autoregression vector (VAR) methodology of Toda and Yamamoto to test for Granger causality. Our empirical results strongly support the hypothesis that finance leads to growth in five out of the six countries. Only in Israel could weak support be found for causality running from economic growth to financial development but no causality in the other direction. These findings suggest the need to accelerate the financial reforms that have been launched since the mid 1980s and to improve the efficiency of these countries’ financial systems to stimulate saving/investment and, consequently, long‐term economic growth.