Monopsony and two-part tariffs

We adapt the traditional model of two-part tariffs by a monopolist to the case of monopsony. We show that the resulting offer is that the seller pays its producer surplus as an access fee in exchange for the buyer's promise to buy everything that the seller wants to sell when price equals marginal cost. In addition, we show that this is equivalent to the surplus that the buyer captures with first-degree price discrimination as well as an all-or-nothing offer. We also extend this analysis to the case of uncertainty for a risk-averse monopsonist.     

Equity‐based incentives and shareholder say‐on‐pay

We study the relationship between CEO pay‐performance sensitivity, pay‐risk sensitivity, and shareholder voting outcomes as part of the “say‐on‐pay” provision of the 2010 US Dodd‐Frank Act. Consistent with our hypothesis, we provide evidence that shareholders tend to approve of compensation packages that are more sensitive to changes in stock price (pay‐performance sensitivity). Our findings are consistent with theoretical predictions that outside owners approve of equity incentives as a means of aligning managers' interests with those of shareholders. We also document that future changes to equity‐based incentives are related to voting outcomes and that shareholders incorporate CFO incentives into their votes. Collectively, these results provide evidence of the importance of equity‐based incentives from the perspective of those most concerned with firm value and of the effectiveness of say‐on‐pay as a governance mechanism.     

Taking the pulse of accounting education reform: liberal education,sociological perspectives,and exploring ways forward

This paper examines the ‘state of play’ with regard to accounting education reform, which has been advocated for decades but is notable for having failed to produce significant change. We build on prior calls to ‘liberalise’ accounting education, recommending a move to a more relevant curriculum that considers accounting in its social context. Based on an analysis of the accounting curriculum in 31 Australian and 8 New Zealand universities, we find that, despite widespread and continuing calls for a broader educational approach, there are very few examples of systemic curricular-wide change to the traditional technical and vocational focus of accounting education. As a way forward, a sociologically-informed accounting curriculum is proposed to overcome the widely-recognised limitations of current approaches and the apparent failure of efforts to liberalise the curriculum. We argue that our approach would facilitate the broadening of the curriculum, and the development of better-educated, well-rounded, and socially-aware graduates.     

Developing a scale to measure liabilities and assets of newness after start-up

New ventures can simultaneously face survival challenges and benefit from distinct advantages based on their newness. Despite the importance of these issues, extant entrepreneurship studies, with limited exception, have often employed only rudimentary measures (e.g., venture age) to investigate important issues related to organizational newness. Accordingly, we develop and refine a scale to measure critical dimensions of newness that stakeholders perceive after NV start-up. We first discuss the theoretical background and previous research related to various newness dimensions. We then introduce a new construct, organizational energy, that heretofore has received scant attention in NV research. Next, we present results from an inductive study conducted to generate various dimensions of newness as well as two empirical investigations that further refine these dimensions into a reliable scale for measuring different newness dimensions. We conclude by discussing our empirical findings, the study’s limitations, and potential future research directions.     

Tests of expectancy theory predictions of effort: A simulation study comparing simple and complex models

The authors summarize existing studies of expectancy theories of work effort and conclude that simple additive models generally predict effort as well as, or better than, more complex multiplicative ones. An attempt is made to explain the empirical findings using a computer simulation. The results of the simulation indicate that reasonable amounts of measurement error invalidate attempts to show that one combination of valence, expectancy, and instrumentality is a better predictor of work effort than any other. The authors conclude that even though questions regarding complex interactions cannot be answered, valence, expectancy, and instrumentality, taken independently, appear to be important determinants of work effort and point out areas where future research is needed.     

Restraints of trade by durable good producers

Whether they face competition or not, durable good producers may have an incentive to impose vertical restraints on their customers in order to protect quasi-rents in the aftermarkets for maintenance and repair. In this paper, we show that these vertical restraints have little to do with the usual antitrust concerns regarding tying arrangements. Nonetheless, imposing such restraints involves antitrust risks. We examine these risks and the associated antitrust policy questions in light of the Supreme Court's recent Kodak decision. We also offer some suggestions for the appropriate antitrust policy.     

Innovation of entrepreneurial firms

An empirical test is provided of the effect of the degree of obsolescence on the effect of firm size and monopoly profits on a firm's ability to innovate. Recent theory suggests that innovation depends on firm size and monopoly profits only if the firm conducts product improvement as well as new product innovation. This is due to the allocation of limited entrepreneurial attention between improving current products and innovating new products. Current products are subject to obsolescence and innovation requires technological opportunities. The firm conducts product improvement as well as new product innovation only if the degree of obsolescence is sufficiently low relative to the level of technological opportunity. This theory provides an explanation for previously unexplained empirical observations. We find preliminary support for the hypothesis that product improvement reduces the positive effect of firm size on new product innovation and sufficient product improvement may reverse the negative effect of monopoly profits on new product innovations. In addition, product improvement reduces the positive effect of technological opportunity on new product innovation.     

Limited Entrepreneurial Attention and Economic Development

Economic development depends on the allocation of entrepreneurial resources to efforts to discover new profit opportunities. Limited entrepreneurial attention is allocated between maintaining current activities and starting new activities. This paper addresses the problem of allocating limited entrepreneurial attention in a variety of contexts. The issues that are addressed are product improvement and new product development; the choice of career as an innovative entrepreneur, a managerial entrepreneur or a salaried employee; the venture capitalist's attention to current and new ventures and funds; the writing of internal contracts and market contracts and the supervising of current employees and hiring additional employees.     

The influence of past behavior on behavioral intent: An information‐processing explanation

Despite considerable research on the impact of past behavior on decision making over the past two decades, little is yet known about how past experience moderates decision theoretic factors within models of behavioral intent. This research explores the implications of past behavior within the theory of planned behavior (TPB), and how it influences key decision‐making variables. A theoretical model of how past behavior can induce deliberative versus heuristic processing of information is developed and tested. Consumer implications of the impact of past behavior on behavioral intentions are discussed, highlighting the importance of addressing one's experience when making a decision. © 2008 Wiley Periodicals, Inc.