Unbundling Ownership and Control

We study control contests under asymmetric information. Using a mechanism design approach, we fully characterize the optimal control contest mechanism. The optimal mechanism requires increasing the number of shares owned by the incumbent insider if he remains in control, while giving him a golden parachute that includes both shares and cash if he is deposed. The model underscores a novel explanation for the prevalence and persistence of the separation of ownership from control: efficiency in control contests is more easily achieved when ownership of cash flow rights is not concentrated in the hands of insiders.     

Community-based programmes to promote use of bicycle helmets in children aged 0-14 years: a systematic review

Hospital-based research has shown that wearing a helmet reduces the risk of head injury in bicycle riders. These studies have provided the impetus for community-wide interventions to increase the numbers of cyclists who wear helmets; however, the effectiveness of such programmes is undetermined. This study employs extensive search strategies to review the scientific literature to establish the effectiveness of community-wide programmes to increase helmet use among cyclists. Thirteen community-wide intervention studies using substantive methodologies were located in 16 published papers. The community-wide interventions include mandating helmet wearing, education campaigns, distribution of free or subsidized helmets or, more frequently, combinations of all of these methods of influence. All studies reported success in influencing helmet wearing across communities. However, none of the studies reveals enough detail of the mix or techniques employed in the interventions to replicate the interventions. While it is encouraging that all of the studies showed positive results, the way forward for further implementation of helmet wearing is for adequate documentation of successful interventions.     

Navigating in the Midst of More Uncertainty and Risk

With the steady increase in the variety and scale of uncertainties and risks, the challenges for today's executives have become ever more complex and daunting. One powerful tool for navigating among different risks and uncertainties is scenario planning. From its early days of use within Shell, scenario planning has evolved in ways that make it better suited to the tasks of identifying, analyzing, and managing various financial risks across different industries. During the last ten years, Morgan Stanley has also been using scenario planning to gain a better understanding of key risks and uncertainties facing the financial services industry, ranging from the consequences of possible changes in the dollar to the emergence of hedge funds and the remarkable growth of China and India. In discussing the benefits of scenario planning, the authors note its potential to help management in a number of ways:

• ? By challenging conventional thinking and current assumptions about its industry and world;
• ? By identifying key signals or potential direction changes ahead of time, which is especially important when lead times to invest, hedge, or change assets are limiting factors;
• ? By identifying and assessing the value of strategic or “real” options—options to invest in new opportunities or limit downside risks that may suddenly open up or disappear, and that man‐ agement must be prepared to “exercise” quickly and decisively;
• ? By reinforcing the recognition that value added comes not just from better strategic thinking and planning, but from the role of risk management in helping companies take advantage of new opportunities;
• ? By encouraging more cross‐divisional and firm‐wide conversations about strategic choices and options, thereby creating a shared understanding of and greater consensus about chosen strategies; and
• ? By forcing them to go beyond the limits of typical three‐to‐five year forecasting limitations to think hard about longer‐term strategic choices.

     

采购:绿色战略成功的关键

绿色采购并不是对目前采购运作方式的背离,它是一种延续。如今,迫于来自员工、客户、消费者以及供应链合作伙伴的压     

OLIVE: A SIMPLE METHOD FOR ESTIMATING BETAS WHEN FACTORS ARE MEASURED WITH ERROR

We propose a simple and intuitive method for estimating betas when factors are measured with error: ordinary least squares instrumental variable estimator (OLIVE). OLIVE performs well when the number of instruments becomes large, whereas the performance of conventional instrumental variable methods becomes poor or even infeasible. In an empirical application, OLIVE beta estimates improve R² significantly. More important, our results help resolve two puzzling findings in the prior literature: first, the sign of average risk premium on the beta for market return changes from negative to positive; second, the estimated value of average zero‐beta rate is no longer too high.