Do Portfolio Manager Contracts Contract Portfolio Management?

Most mutual fund managers have performance‐based contracts. Our theory predicts that mutual fund managers with asymmetric contracts and mid‐year performance close to their announced benchmark increase their portfolio risk in the second part of the year. As predicted by our theory, performance deviation from the benchmark decreases risk‐shifting only for managers with performance contracts. Deviation from the benchmark dominates incentives from the flow‐performance relation, suggesting that risk‐shifting is motivated more by management contracts than by a tournament to capture flows.     

Tax Advice and Reporting under Uncertainty: Theory and Experimental Evidence*

Abstract. This study extends the Beck, Davis, and Jung (1992) experimental study by incorporating opportunities for taxpayer subjects to purchase advice before making their tax reporting decisions. Tax advice has two roles in the model and experiment. First, tax advice allows taxpayers to reduce their uncertainty about the amount of taxes owed. This permits us to study the demand for tax advice in conjunction with its effect on tax reporting decisions. Second, the decision to purchase tax advice from an expert provides a means of signaling that may alter tax agency audit policies. The resulting audit policies, in turn, can affect taxpayers' decisions to purchase tax advice. These interdependencies are incorporated in a game-theoretic model and several predictions are tested experimentally. Consistent with theory, subjects sorted themselves into three groups based upon their private information. Another prediction supported by the experiment is that the demand for tax advice increased with the magnitude of an uncertain tax deduction (amount-at-risk). We also found, as expected, that the effects of tax advice on pre-audit tax revenues depend upon the amount-at-risk. When the amount-at-risk was high, subjects in settings with tax advice reported lower average incomes and paid lower taxes than did those subjects in settings without the opportunity to purchase tax advice. The opposite was true for the low amount-at-risk condition, supporting our prediction that tax advice and amount-at-risk would have an interactive effect on tax reporting. Analysis was also performed on post-audit tax collections. Contrary to theory, post-audit tax payments were found to increase when subjects had an opportunity to purchase tax advice. This result apparently was caused by a tendency to over-purchase tax advice and, in some cases, to report a low income regardless of the advice received. Résumé. Les auteurs développent l'étude expérimentale de Beck, Davis et Jung (1992) en y incorporant la possibilité pour les sujets contribuables de solliciter des conseils avant de prendre leurs décisions relatives à l'information qu'ils fourniront aux fins fiscales. Les conseils fiscaux jouent deux rôles dans le modèle et l'expérience. Premièrement, ils permettent aux contribuables de réduire leur incertitude relative au montant des impôts auxquels ils sont assujettis. Les auteurs peuvent ainsi étudier la demande de conseils fiscaux en conjonction avec leurs conséquences sur les décisions relatives à l'information à fournir aux fins fiscales. Deuxièmement, la décision de solliciter les conseils fiscaux d'un expert est un signal pouvant influer sur les politiques de vérification des représentants du fisc. À leur tour, ces politiques peuvent influer sur les décisions des contribuables de solliciter des conseils fiscaux. Ces interdépendances ont été intégrées à un modèle de jeu théorique et les auteurs ont vérifié plusieurs prédictions par expérimentation. Conformément à la théorie, les sujets se sont répartis en trois groupes, en fonction de l'information privilégiée dont ils disposaient. L'expérimentation a confirmé une autre prédiction: la demande de conseils fiscaux augmente avec l'importance de la somme dont la déductibilité est incertaine (montant à risque). Les auteurs constatent également, comme ils s'y attendaient, que les effets des conseils fiscaux sur les recettes fiscales antérieures à la vérification dépendent du montant à risque. Lorsque le montant à risque est élevé, les sujets pouvant solliciter des conseils fiscaux font état de revenus moyens inférieurs et paient moins d'impôt que les sujets n'ayant pas la possibilité de solliciter des conseils fiscaux. L'inverse est vrai lorsque le montant à risque est faible, ce qui confirme la prédiction selon laquelle les conseils fiscaux et le montant à risque ont un effet interactif sur l'information fournie aux fins fiscales. Les auteurs analysent également les impôts perçus postérieurement à la vérification. Contrairement à la théorie, ils constatent que les paiements fiscaux postérieurs à la vérification augmentent lorsque les sujets ont eu la possibilité de solliciter des conseils fiscaux. Ce résultat semble être attribuable à une tendance à solliciter des conseils fiscaux avec excès et, dans certains cas, à faire état d'un faible revenu, malgré les conseils reçus.     

Automobile prices and the value of shopping

Consumers shopping for a new car in the U.S.A. or Canada are faced with having to negotiate a ‘good deal’ from the listed ‘sticker’ price. This study investigates the price variations among new car dealerships in 10 major cities. A standardized shopping procedure was used to collect price information based on selected models and options for comparable Chevrolet and Ford automobiles. The findings indicate that consumers clearly benefit from shopping at more than one dealership for a new car.     

INTEREST CHARGES FOR AUTOMOBILE LOANS IN METROPOLITAN TORONTO

This study addresses itself to the structure of interest rates for automobile loans in Toronto. Variations in interest charges were found among every type of lender. Because of the banking structure in Canada, loan rates would be similar in other parts of Ontario and in the other Canadian provinces.     

太湖重污染湖区底泥沉积物特性

对竺山湖及太湖西岸湖区底泥沉积物的粒径、含水率、有机质、TN,TP含量进行研究,探讨竺山湖湾东部、竺山湖湾西部、太湖西岸北部、太湖西岸南部底泥污染物表层及垂向分布规律.结果表明,竺山湖湾沉积物中有机质、TN,TP含量高于西沿岸湖区,底泥再悬浮释放污染物风险较大;西沿岸北段清淤区垂向有机质、TN含量无显著性变化,TP含量...     

Car prices and the degree of buyer sophistication

This study deals with price variations among car dealers. The major emphasis is on differences in prices quoted to prospective buyers based on their degree of sophistication. The value of bargaining in the price negotiation process is addressed. Prices are also compared based on dealer sales volume and dealer location.     

Do Jobseekers Value Diversity Information? Evidence from a Field Experiment and Human Capital Disclosures

We examine how information about the diversity of a potential employer's workforce affects individuals’ job-seeking behavior. We embed a field experiment in job recommendation emails from a leading career advice agency in the United States. The experimental treatment involves highlighting a diversity metric to jobseekers. Our results indicate that disclosing diversity scores in job postings leads jobseekers to click on firms with higher diversity scores, with such effects varying across jobseeker demographics. A follow-up survey provides evidence on potential explanations for why jobseekers value diversity information. We then examine how jobseekers’ preferences for diversity relate to disclosure choices under the U.S. SEC Human Capital Disclosure requirement. We find that firms in industries characterized by higher jobseeker responsiveness to diversity information tend to voluntarily disclose diversity metrics in their 10-Ks under these new disclosure requirements.