Information partnerships--shared data, shared scale

How can one company gain access to another's resources or customers without merging ownership, management, or plotting a takeover? The answer is found in new information partnerships, enabling diverse companies to develop strategic coalitions through the sharing of data. The key to cooperation is a quantum improvement in the hardware and software supporting relational databases: new computer speeds, cheaper mass-storage devices, the proliferation of fiber-optic networks, and networking architectures. Information partnerships mean that companies can distribute the technological and financial exposure that comes with huge investments. For the customer's part, partnerships inevitably lead to greater simplification on the desktop and more common standards around which vendors have to compete. The most common types of partnership are: joint marketing partnerships, such as American Airline's award of frequent flyer miles to customers who use Citibank's credit card; intraindustry partnerships, such as the insurance value-added network service (which links insurance and casualty companies to independent agents); customer-supplier partnerships, such as Baxter Healthcare's electronic channel to hospitals for medical and other equipment; and IT vendor-driven partnerships, exemplified by ESAB (a European welding supplies and equipment company), whose expansion strategy was premised on a technology platform offered by an IT vendor. Partnerships that succeed have shared vision at the top, reciprocal skills in information technology, concrete plans for an early success, persistence in the development of usable information for all partners, coordination on business policy, and a new and imaginative business architecture.     

The Effect of Regulatory Harmonization on Cross‐Border Labor Migration: Evidence from the Accounting Profession

The paper examines whether international regulatory harmonization increases cross‐border labor migration. To study this question, we analyze European Union initiatives that harmonized accounting and auditing standards. Regulatory harmonization should reduce economic mobility barriers, essentially making it easier for accounting professionals to move across countries. Our research design compares the cross‐border migration of accounting professionals relative to tightly matched other professionals before and after regulatory harmonization. We find that international labor migration in the accounting profession increases significantly relative to other professions. We provide evidence that this effect is due to harmonization, rather than increases in the demand for accounting services during the implementation of the rule changes. The findings illustrate that diversity in rules constitutes an economic barrier to cross‐border labor mobility and, more specifically, that accounting harmonization can have a meaningful effect on cross‐border migration.     

Economic Motivations for Limited Dependent and Qualitative Variable Models*

The greater availability of survey data, a succession of papers dealing with the statistical issues arising from the analysis of such data and the appearance of software packages, such as UMDEP, have led to a remarkable increase in the application of limited dependent and qualitative variable models in economics. Economic analysis of the behaviour of individual decision makers often leads to models which are of a limited dependent or qualitative variable nature. This paper attempts to show how the use of these models naturally arises from the more general framework of modifications to traditional economic optimization problems.     

Adaptive learning in financial markets

We investigate adaptive or evolutionary learning in a repeatedversion of the Grossman and Stiglit (1980) model. We demonstratethat any process that is a monotonic selection dynamic willconverge to the rational expectations asset demands if the proportionof informed traders is fixed. We also show that these learningprocesses have a unique asymptotically stable fixed point atthe Grossman-Stiglitz (GS) equilibrium. The robustness of learningto noisy experimentation is studied using Binmore and Samuelson's(1999) deterministic drift approximation. Conditions on economicand learning process parameters for adaptive learning to leadto the GS rational expectations equilibrium are presented.     

Monetary Policy and Global Banking

When central banks adjust interest rates, the opportunity cost of lending in local currency changes, but—absent frictions—there is no spillover effect to lending in other currencies. However, when equity capital is limited, global banks must benchmark domestic and foreign lending opportunities. We show that, in equilibrium, the marginal return on foreign lending is affected by the interest rate differential, with lower domestic rates leading to an increase in local lending, at the expense of a reduction in foreign lending. We test our prediction in the context of changes in interest rates in six major currency areas.     

Empirical relevance of efficient contract theory: inter-firm contracts

Although there has been enormous development of the theory ofefficient contracts in the last 20 years, empirical tests wereslow to come. However, over the last 10 years, a considerablebody of evidence has accumulated, particularly in relation tocontracts between firms. This paper develops a simple, integratedtheoretical framework to illustrate 11 testable hypotheses.The contract theories covered include risk sharing, principal-agentincentive models, transaction cost and incomplete contract modelswith specific investment, and the theory of relational contracting.The problems associated with empirical work on contracts arediscussed before setting the hypotheses against a wide rangeof econometric and other empirical evidence (including workon franchising, sharecropping, subcontracting, contract duration,private institutions, experimental evidence, and a wide rangeof case studies).     

The American system of shared powers: the President, Congress, and the NLRB

The purpose of this article is to develop and test a model ofpolitical influence on regulation that incorporates both thecompeting interests of elected officials and the relevant institutionalconstraints. To do this, we focus on one channel of politicalinfluence: the appointment of agency leaders to a multimemberregulatory board. The model has two stages: first, a bargainingstage between the president and Senate in which they choosea target policy; and second, the appointments stage in whichthey attempt to implement this target by choosing the medianboard member. The model's empirical leverage arises becauseelected officials can replace board members only when seatson the board become available through term expiration or resignation.This yields specific predictions about how and whether eachappointment will change policy. We apply the model to the NLRB.The empirical results, investigating all appointments to theNLRB from 1949 until 1988, fit our theory remarkably well.     

A Multi-Agent ODSS Architecture for Supporting Distributed Decision-Making

In this paper, we present an architecture of an ODSS that focuses on organizational learning to enhance the organization's memory and distribution of the organization's intelligence throughout the organization to the various units that need it in their decision-making process. Learning in this ODSS is done by multiple intelligent agents that are designed to gather, accumulate and classify information in order to assist the decision-maker.