Incomplete Regulation,Competition, and Entry in Increasing Returns to Scale Industries

The paper analyzes the effects of liberalization in increasing returns to scale industries. It determines the optimal regulation of an incumbent competing with an unregulated strategic competitor, when public funds are costly. The model reveals the trade‐off between productive and allocative efficiency. Moreover, the welfare gains from liberalization, as compared with regulated monopoly, are a nonmonotonic function of the cost of public funds. Finally, in the case of severe governmental cash constraints, incomplete regulation may dominate the full regulation of duopoly.     

A flammability hazard rating and index for women's apparel

Women's garments and the fabrics therein were analysed and characterized. Garments were grouped into garment assemblies, 60 of which were burned on Minnesota Woman, a thermally-instrumented mannequin. Second and third degree burn injuries were calculated using Henriques' tissue damage factor. From 0 to 90% of the mannequin surface area equipped with sensors received second or third degree burn injury. A hazard index was developed based on degree of injury and the speed with which the injury occurred. Fabric and garment parameters found to be of importance in determining the hazard deduced from the mannequin tests were fabric weight, fibre content, and garment type and fit. A hazard rating was developed based on these parameters. Comparison of the hazard rating and the hazard index values indicated that this must be considered to be an exploratory, first stage attempt to develop a relatively simple method for rating the flammability hazard of apparel.     

Virtually Perfect Corporation*

This case provides an example of a high technology company that is expanding and is facing cash flow constraints. It details financial reporting issues relating to the company’s most recent set of financial statements. It requires students to assume the role of a newly appointed auditor, to prepare a report analyzing the key issues and to provide advice to the owners of the Company. Students are faced with a set of integrated financial accounting and reporting issues. The case incorporates some overview audit issues, but it is most suitable as a capstone case in intermediate financial accounting, for use in either undergraduate or MBA courses.     

Dragon Slaying with Ambiguity: Theory and Experiments

This paper studies the impact of ambiguity in the best‐shot and weakest‐link models of public good provision. The models are first analyzed theoretically. Then, we conduct experiments to study how ambiguity affects behavior in these games. We test whether subjects' perception of ambiguity differs between a local opponent and a foreign one. We find that an ambiguity‐safe strategy is often chosen by subjects. This is compatible with the hypothesis that ambiguity aversion influences behavior in games. Subjects tend to choose contributions above (respectively, below) the Nash equilibrium in the best‐shot (respectively, weakest‐link) model.     

CLOTHES-CARE SYMBOLS: ARE THEY UNDERSTOOD?

This brief paper is a report of an investigation into the acceptability of modern clothes care symbols carried out by third-year psychology students who have been following an option in consumer psychology in their course.     

Scalar Narratives in Bilbao: A Cultural Politics of Scales Approach to the Study of Urban Policy

In this article I explore how theoretical metaphors about the contemporary rescaling of the capitalist economy are used by local policy actors to justify an entrepreneurial urban policy. I develop a new theoretical concept (scalar narrative), suggest an analytical approach (cultural politics of scales) and give evidence of a particular case (Bilbao). The article is structured in the following way. First, I briefly review the literature on politics of scales and contribute to the debate with an approach that incorporates elements from cultural political economy and interpretative policy analysis. Within this approach I mobilize the concept of ‘scalar narrative’ that has already been suggested in the literature but not fully explored. I then put this approach into practice with a particular case study, Bilbao, a city in the north of Spain, which has recently gone through extensive urban regeneration, where I describe the appropriation of three scalar narratives by the policymakers. To show this I draw from empirical work done in Bilbao that looks at statutory and strategic planning documents as well as urban marketing literature and interviews with key informants.     

Consumers' and retailers' practices and attitudes towards energy-efficient clothing

The purpose of this study was to compare the extent to which consumers and retailers consider energy efficiency in evaluating and selecting indoor sportswear. Little research has been conducted in which retail buyers are subjects; no published research has focused on a comparison of consumers and merchants in regard to their attitudes towards a specific product. The value of such research lies in determining whether a particular consumer need is being met. The results of the present study revealed that retail buyers were less concerned about energy-efficient clothing than were consumers. Significant differences were found between the two groups for four of the nine variables studied. In all cases, consumers gave greater consideration to the energy efficiency of indoor sportswear than retail buyers believed. Further investigation of differences in consumers' and retailers' attitudes and practices is needed.     

Bond ratings,bond yields and financial information*

Abstract. The role of accounting information in investment decision making and capital markets has been investigated by exploring fundamental connections between accounting numbers and market-based phenomena of interest. Studies of bond rating predictions have described how bond raters make their judgments as a function of accounting and other data. This study expands our knowledge of these fundamental connections by investigating whether bond ratings have a direct impact on bond yields and how accounting information impacts the bond yields—directly, or indirectly through the bond ratings. A simultaneous equation system is constructed using firm-specific financial information, bond ratings by two major rating agencies, and initial offering yields. The sample used in this study consists of 189 new issue industrial bonds rated by both Standard & Poor's and Moody's that were issued from 1981 through 1985. Tests of alternative structural model configurations provide evidence regarding the interrelations between bond ratings, financial information, and bond yields. The improvements in the statistical methodology lead to a better understanding and assessment of the relative roles of bond ratings and financial information in setting bond prices. The use of simultaneous equation modeling allows the interrelations among yields, ratings, and financial information to be assessed and allows the direct and indirect effect of financial information on yields to be estimated. This results in the ability to conclude that financial information affects bond ratings, that bond ratings directly affect bond yields, that financial information also directly affects bond yields, and that financial information indirectly affects bond yields through its effect on ratings. The role of accounting information in setting bond market prices is clarified using this approach. Résumé. On a étudié le rôle de l'information comptable dans la prise de décisions d'investissement et sur les marchés financiers en explorant les liens fondamentaux entre les données comptables et les phénomènes d'intérêt fondés sur le marché. Les études portant sur les prédictions relatives à la notation des obligations ont décrit de quelle façon les services d'information financière jugeaient de la valeur des obligations à partir de données, comptables et autres. Les auteurs de la présente étude élargissent la connaissance de ces liens fondamentaux en analysant la possibilité que la notation des obligations ait une incidence directe sur leur rendement et la façon dont l'information comptable agit sur le rendement des obligations, que ce soit directement, ou indirectement par l'intermédiaire de leur notation. Les auteurs constuisent un système d'équations simultanées à l'aide de l'information financière propre à l'entreprise, des cotes accordées aux obligations par deux services majeurs d'informations financières et du rendement des émissions initiales. l'échantillon qui a servi à l'étude compte 189 nouvelles émissions d'obligations dans le secteur industriel, cotées à la fois par Standard & Poor's et Moody's, qui ont été émises entre 1981 et 1985. Les tests appliqués aux configurations de rechange du modèle structurel établissent clairement les relations entre la notation des obligations, l'information financière et le rendement des obligations. Les progrès de la méthodologie statistique ont mené à une meilleure compréhension et une meilleure évaluation des rôles relatifs de la notation des obligations et de l'information financière dans l'établissement du prix des obligations. La modélisation d'équations simultanées permet, d'une part, l'évaluation des relations entre rendement, notation et information financière et, d'autre part, l'estimation des conséquences directes et indirectes de l'information financière sur le rendement qui doit être estimé, ce qui amène à conclure que l'information financière a une incidence sur la notation des obligations, que la notation des obligations exerce une influence directe sur le rendement des obligations, que l'information financière touche également de manière directe le rendement des obligations et qu'elle a une incidence indirecte sur le rendement des obligations, par le truchement de son incidence sur la notation. Le rôle de l'information comptable dans l'établissement de la valeur marchande des obligations est éclairci grâce à cette méthode.