Audit‐firm group appointment: an artificial intelligence approach

Auditor appointment can be regarded as a matter of pursued audit quality and is driven by several factors. The adoption of an effective auditor procurement process increases the likelihood that a company will engage the right auditor at a fair price. In this study, three techniques derived from artificial intelligence (AI) are used to propose models capable of discriminating between cases where companies appoint a Big 4 or a Non‐Big 4 auditor. These three AI methods are then compared with the broadly used method of logistic regression. The results indicate that two of the AI techniques outperform logistic regression. In addition, one method further improves its performance by applying bagging. Finally, significant factors associated with auditor appointment are revealed. Copyright © 2009 John Wiley & Sons, Ltd.     

Endogenous Spillovers and the Performance of Research Joint Ventures

We present a model of R&D with endogenous spillovers and demonstrate that noncooperation can produce maximal spillovers. The only other noncooperative outcome is minimal spillovers. When noncooperation achieves maximal spillovers so does an RJV, whereas minimal noncooperative spillovers imply partial—but not necessarily maximal—spillovers by an RJV. Partial RJV spillovers are chosen for anti-competitive reasons and an RJV may also close a lab for anti-competitive reasons. The possibility of anti-competitive outcomes is precluded in the existing literature on RJVs which focuses on symmetric outcomes. Our model predicts when anti-competitive behaviour by an RJV arises.     

Unemployment and liquidity constraints

We present a dynamic framework for the interaction between borrowing (liquidity) constraints and deviations of actual hours from desired hours, both measured by discrete‐valued indicators, and estimate it as a system of dynamic binary and ordered probit models with panel data from the Panel Study of Income Dynamics. We analyze a household's propensity to be liquidity constrained by means of a dynamic binary probit model. We analyze qualitative aspects of the conditions of employment, namely whether the household head is involuntarily overemployed, voluntarily employed, or involuntarily underemployed or unemployed, by means of a dynamic ordered probit model. We focus on the possible interaction between the two types of constraints. We estimate these models jointly using maximum simulated likelihood, where we allow for individual random effects along with an autoregressive process for the general error term in each equation. A novel feature of our method is that it allows for the random effects to be correlated with regressors in a time‐invariant fashion. Our results provide strong support for the basic theory of constrained behavior and the interaction between liquidity constraints and exogenous constraints on labor supply. Copyright © 2007 John Wiley & Sons, Ltd.     

Has Greater Stock Market Participation Increased Wealth Inequality in the Us?

Is wider access to stockholding opportunities related to reduced wealth inequality, given that it creates challenges for small and less sophisticated investors? Counterfactual analysis is used to study the influence of changes in the U.S. stockholder pool and economic environment, on the distribution of stock and net household wealth during a period of dramatic increase in stock market participation. We uncover substantial shifts in stockholder pool composition, favoring smaller holdings during the 1990s upswing but larger holdings around the burst of the Internet bubble. We find no evidence that widening access to stocks was associated with reduced net wealth inequality.     

Public transit user satisfaction: Variability and policy implications

This research focuses on passenger's perception of transit performance with an emphasis on the variability between operators and the policy implications of such differences. Two statistical methods (factor analysis and ordered logit modeling) have been used to assess the quality implications of the variability of the users’ perceived satisfaction across operators. A market segmentation analysis (between male and female respondents) provides further insight into the differences among groups of the population. Five transit systems in the two major conurbations in Greece, Athens and Thessaloniki, have been examined. The analysis demonstrated that a well-coordinated transportation environment should be the primary aim of the policy makers in Athens, followed by other quality attributes such as service frequency and accessibility. In Thessaloniki, the sole transit operator should include in its policy plans immediate corrective measures addressing the service frequency, waiting time and vehicle cleanliness attributes.     

Optimal Substantive Standards for Competition Authorities

Recent years have witnessed a significant resurgence in the debate concerning the optimal substantive standard to be used in the enforcement of competition law. One of the arguments proposed for using a Consumer Surplus standard, is that, when firms can choose from a number of mutually exclusive actions, it may induce firms to adopt actions that lead to a higher level of total welfare than would a Total Welfare standard. This important basic insight, initially due to Lyons (2002), has been discussed and extended in the recent literature always in the context of mergers. In this paper we generalise and re-examine this argument for any potentially anti-competitive action – we have in particular in mind actions often challenged as attempted monopolisation (abuse of dominance) or vertical restraints, taken by firms in different environments. We show that in the absence of any efficiencies the two standards lead to exactly the same outcomes but a choice between them becomes important in the presence of efficiencies. With positive marginal-cost reducing efficiencies we confirm the presence of what we term a Lyons effect in our more general setting. We then examine how the choice of standard depends on a number of relevant parameters. Most important in terms of their policy implications are the results that the Consumer Surplus standard will be the optimal choice, when the extant market power is significant, when the size of marginal cost-reducing efficiency effects is large and when the difference in the market power raising effects of mutually exclusive actions is large. These results are important since they suggest that in all cases where significant extant market power is a prerequisite for the enforcement of Competition Law it is best to use a Consumer Surplus standard.     

Designing the European Road Safety Observatory

The unavailability of consistent traffic accident data and road safety information limits the opportunities to provide target approaches to reduce road crashes. The European commission has decided to meet the demand for this data by establishing a new Road Safety Observatory. The structure and much of the initial content is being developed within the SafetyNet Integrated Project. This paper describes the structure of its key components.     

Lessons from the Greek Crisis: Past,Present, Future

Atlantic Economic Journal - The Greek crisis has taken a heavy toll on incomes, employment and wealth. It took eight years, three adjustment programmes, one major debt restructuring and three...     

Investigation of the acceptance of a handbook for safe driving at an older age

The objective of this research is the investigation of older drivers' attitudes towards a handbook for safe driving at an older age. The handbook was developed with the purpose of increasing elderly drivers' awareness of their driving abilities and providing information about the effects of ageing on driving and about safe driving practices and compensation strategies. A survey was carried out in which 64 active drivers between 65 and 74 years of age participated. Participants regard the handbook for safe driving as useful, interesting, providing knowledge and relevant information. More than half of them reported that they had become more aware of changes in their driving after reading it. Binary logistic analysis was conducted to identify individual driver characteristics that might predict acceptance of the handbook by active older drivers in terms of reported increased awareness and intended repeated use. The findings of the research indicate a positive attitude of elderly active drivers towards the handbook, implying acceptance by its users. The characteristics of the drivers' who reported increased awareness after reading have been identified.