Accounting for control and trust building in interfirm transactional relationships

This paper theorises the accounting-control-trust nexus in interfirm transactional relationships. In the context of such relationships, accounting has predominantly been conceptualised as a control technology. However, in our paper we analyse stable and durable relationships as being the results of interaction between control and trust building. Such an analysis calls for an additional conceptualisation of accounting as a trust building technology. Furthermore, we explain the interaction between accounting for control and accounting for trust building in the context of a process of embedded agency.     

Pioneer brand advantage and consumer behavior: A conceptual framework and propositional inventory

What are the behavioral origins of pioneer brand advantage? This article provides an integrative conceptual framework and propositional inventory to help more fully understand this multifaceted phenomenon. It is proposed that there are three sources of entry-order information that work through various psychological processes and affect multiple decision process variables. The conceptual framework translates into eight testable propositions. New exploratory evidence is presented. Managerial implications are discussed.     

Low price equilibrium in multi-unit auctions: the GSM spectrum auction in Germany

The second–generation (GSM) spectrum auction in Germany is probably the most clear cut example of a low price outcome in a simultaneous ascending-bid multi-unit auction. The present paper gives an account of the events, describes the auction rules and market conditions, and provides a game theoretic explanation of low price equilibrium in simultaneous, ascending-bid multi-unit auctions. In particular, it is shown that in the unique equilibrium that survives iterated elimination of dominated strategies, the efficient allocation is reached at minimum bids.     

Guest editor's introduction

The views reflected in the paper are those of the author and do not necessarily concur with those of his employer.     

Maximising sustainability of Dutch dairy farming systems for different stakeholders: A modelling approach

A multi-attribute sustainability function is included into a dairy farm LP-model by using Weighted Goal Programming. The created Weighted Linear Goal Programming (WLGP)-model is used to maximise sustainability of different Dutch dairy farming systems and to analyse the impact of: (1) maximisation of individual sustainability aspects (economic, social and ecological sustainability) and (2) maximisation of overall sustainability using stakeholder preferences. Maximising the individual aspects of both dairy farming systems, i.e. conventional and organic, shows the trade-offs between different aspects of sustainability. For conventional as well as organic dairy farming maximum scores are highest for external social sustainability. The conventional dairy farm achieves a slightly higher score for overall sustainability than the organic dairy farm for all stakeholders (i.e. consumers and producers). This shows that it is possible for conventional dairy farms, similar to the conventional farm used in the analysis especially regarding the stocking density and under Dutch policy conditions, to achieve equal sustainability scores in comparison with organic dairy farms. It is concluded that the WLGP model is a suitable tool to analyse the sustainability of different dairy farming systems.     

Loosely Coupled Results Control in Dutch Municipalities

This paper analyses the implementation of the ‘dual system’ in Dutch municipalities which was part of a package of New Public Management‐reforms. This system was stimulated by Dutch central government and called for more accountability for performance of municipal managers and the board of mayor and aldermen, as well as for the use of more output and outcome information. Interviews of participants on four different hierarchical levels in 12 municipalities show that the practices of output management at different hierarchical levels are only loosely coupled to each other (‘vertical loose coupling’). We also found some degree of ‘horizontal loose coupling’ at each hierarchical level between result orientation, the development of output indicators and the use of output information for performance evaluation. The paper analyses the reasons why municipalities encounter difficulties in designing a comprehensive and coherent performance management system.     

SCREENING FOR A CHRONIC DISEASE: A MULTIPLE STAGE DURATION MODEL WITH PARTIAL OBSERVABILITY

We estimate a dynamic multistage duration model to investigate how early detection of diabetes can delay the onset of lower extremity complications and death. We allow for partial observability of the disease stage, unmeasured heterogeneity, and endogenous timing of diabetes screening. Timely diagnosis appears important. We evaluate the effectiveness of two potential policies to reduce the monetary costs of frequent screening in terms of lost longevity. Compared to the status quo, the more restrictive policy yields an implicit value for an additional year of life of about $50,000, whereas the less restrictive policy implies a value of about $120,000.     

Multinationals and Training: Some Evidence from Irish Manufacturing Industries

This paper sets out to analyse the effect of plant and sectoral level characteristics on the provision of training to employees using plant level data for Irish manufacturing. There is no clear evidence that foreign owned plants are more likely to provide training. By contrast, we find that they spend less than domestic plants on training, ceteris paribus. There is also no evidence that plants that receive training grants are more likely to provide training. This may be likely to reflect the targeting of training grants on plants that are otherwise unlikely to provide much training. We do, however, find that training activity in the sector, either by other foreign or domestic plants, has a positive effect on plant level training activity, at least for domestic owned plants.     

Component efficient solutions in line-graph games with applications

Recently, applications of cooperative game theory to economic allocation problems have gained popularity. We investigate a class of cooperative games that generalizes some economic applications with a similar structure. These are the so-called line-graph games being cooperative TU-games in which the players are linearly ordered. Examples of situations that can be modeled like this are sequencing situations and water distribution problems. We define four properties with respect to deleting edges that each selects a unique component efficient solution on the class of line-graph games. We interpret these solutions and properties in terms of dividend distributions, and apply them to economic situations. This research has been done while the third author was visiting Tinbergen Institute at the Free University, Amsterdam. The research is part of the Research Programme “Strategic and Cooperative Decision Making” at the Department of Econometrics. Financial support from the Netherlands Organization for Scientific Research (NWO) in the framework of the Russian-Dutch programme for scientific cooperation, is gratefully acknowledged. The third author also appreciates partial financial support from the Russian Leading Scientific Schools Fund (grant 80.2003.6) and Russian Humanitarian Scientific Fund (grant 02-02-00189a). We thank three anonymous referees for their valuable comments.     

Evolutionary competition between prediction rules and the emergence of business cycles within Metzler’s inventory model

We revise Metzler??s well-known inventory model by developing a framework in which producers can either apply a simple but cheap extrapolative or a more sophisticated but expensive regressive forecasting rule to predict future sales. Producers are boundedly rational in the sense that they tend to select forecasting rules with a high evolutionary fitness. Using a mixture of analytical and numerical tools, we attempt to describe the characteristics of our model??s dynamical system. Our results suggest that the evolutionary competition between heterogeneous predictors may lead to irregular fluctuations in economic activity.