Locally stable price mechanisms

This paper develops necessary conditions for a price adjustment mechanism to achieve local stability at regular competitive equilibria. Two principal questions are: how closely must a locally stable mechanism be tailored to particular excess demand functions, and can any such mechanism be interpreted as a market adjustment process. In response to the first question, a variant of the (local) Newton method, termed the ‘orthogonal Newton method’ is shown to require, in a dimensional sense, the minimal information about excess demand functions. The second question is answered in the negative by proving the non-existence of any locally stable mechanism with the property that the price of any given commodity is not changed when its own market is in equilibrium. These and other results are obtained by using convergent price paths to generate a homotopy between the adjustment dictated by the mechanism and the actual direction of the equilibrium.     

Virtual Special Issue on Migration

This editorial introduces a virtual special issue of Spatial Economic Analysis compiled to mark the keynote lecture at the 46th Annual Conference of the Regional Science Association International—British and Irish Section in Cornwall by Professor Jacques Poot of the National Institute of Demographic and Economic Analysis, University of Waikato. Professor Poot's lecture on migration, which is also the theme of this virtual special issue, could not be more topical. Migration is a central issue in public discourse in Europe and the United States, and is setting the agenda for political debate throughout the developed world. The ongoing refugee crisis in Europe, the associated rise in populist, nationalist political movements in Europe and the United States, and the recent vote by the UK to leave the European Union all have migration at their centre.     

Judges' Attitudes toward the Public Accounting Profession

Abstract

This paper presents the results of two related studies. In Study One we examine US judges' attitudes toward the public accounting profession and the extent to which those attitudes have changed over three distinct periods of time: (a) early in the decade of the 1990s, (b) late in the decade of the 1990s, but before the Enron and subsequent corporate debacles, and (c) three years after the Enron debacle. We anticipate that attitudes of judges toward the public accounting profession will be relatively stable over time, but nonetheless subject to change if given a substantial stimulus. In Study Two we compare the most current judges' attitudes with those of law students, MBA students and auditors. In total, we find that judges' attitudes are significantly (1) more negative towards the profession in the most recent survey, (2) equivalent to attitudes exhibited by law students and MBA students, and (3) divergent from attitudes of practicing auditors. Conclusions and future research are also discussed.     

Enabling control and the problem of incomplete performance indicators

To which extent do managers care about the design characteristics of performance indicators and other control systems? The paper examines this question with the help of the framework of enabling and coercive control. Drawing upon data from a longitudinal field study in a manufacturing organisation, we study operational managers’ attitudes towards the incompleteness of performance indicators. Managers are likely to perceive performance indicators as enabling if the latter facilitate their actions without unduly constraining them. This is true even for incomplete performance indicators as long as managers can handle these indicators in a flexible way, treating them as means rather than ends when carrying out their work. Our case also shows, however, how a flexible use of indicators becomes more difficult to sustain once top management signals an increased importance of the indicators. Incompleteness then becomes a more pressing concern for managers. We illuminate the various forms of top management sense-giving through which such tightening of control is achieved and we show how they translate into managers’ perception of the control system as being a coercive rather than enabling one. Taken together, the findings of the present paper add to our understanding of enabling and coercive forms of control and also extend previous studies that have addressed the problem of incomplete accounting information.     

Current trends in hospital mergers and acquisitions

Healthcare reform will impact hospital consolidation in three key areas: Payment rates will decrease, indirectly encouraging consolidation by forcing hospitals to find new ways to reduce costs and increase negotiating clout with suppliers and payers. The cost of doing business will increase as hospitals spend more on compliance, technology, and physician employment. The ACO model will encourage hospital network formation by rewarding integrated healthcare systems that can reduce costs and improve quality.     

The United States as a Coastal Nation

US economic activity is overwhelmingly concentrated at its ocean and Great Lakes coasts, reflecting a large contribution from coastal proximity to productivity and quality of life. Extensively controlling for correlated natural attributes and initial conditions decisively rejects that the coastal concentration of economic activity is spurious or just derives from historical forces long since dissipated. Measuring proximity based on coastal attributes that contribute to either productivity or quality of life, but not to both, suggests that the coastal concentration derives primarily from a productivity effect but also, increasingly, from a quality of life effect.     

Admissible market data structures: A complete characterization

This paper characterizes the market data which, if observed by traders in a stochastic exchange environment, will permit the general existence of (rational) expectations equilibria. It is proved that if a trader observes and conditions his expectations on some nonconstant market data, he must observe at least the equilibrium price and his own equilibrium trade. Any data which do not satisfy this requirement, such as the price alone, or the price and the volume of trade, will fail to permit the existence of an expectations equilibrium for some otherwise well-behaved stochastic environment.     

Toward a theory of customer engagement marketing

Customer engagement marketing—defined as a firm’s deliberate effort to motivate, empower, and measure customer contributions to marketing functions—marks a shift in marketing research and business practice. After defining and differentiating engagement marketing, the authors present a typology of its two primary forms and offer tenets that link specific strategic elements to customer outcomes and thereby firm performance, theorizing that the effectiveness of engagement marketing arises from the establishment of psychological ownership and self-transformation. The authors provide evidence in support of the derived tenets through case illustrations, as well as a quasi-experimental field test of the central tenet of engagement marketing.