Corporate Reporting and Urgent Issues Group Abstracts: The Impact of UIG 4 ON THE Australian Extractive Industries

The Urgent Issues Group (UIG) was established in 1994 to overcome the inability of Australian standard-setters to deal promptly with significant reporting issues. One of its first issues was accounting for restoration obligations, with the subsequent issue in August 1995 of UIG Abstract 4 Disclosure of Accounting Policies for Restoration Obligations in the Extractive Industries. This study reports on the effect of the introduction of UIG 4 on the reporting practices of companies in the extractive industries. Despite an increase in the number of companies disclosing their accounting policy and the level of information provided, the comparability, and therefore usefulness, of disclosure after the introduction of UIG 4 is still questionable.     

A bargaining model of voluntary environmental agreements

We present an explicit model of firm-regulator negotiations in a market with several firms. We describe how the regulatory surplus is distributed between firms and regulator, and analyse the impact of various parameters on the resulting level of environmental regulation. Our main result is that a ‘toughest firm principle’ holds: the outcome of negotiations is essentially determined by the firm with the most aggressive attitude towards environmental control.     

Competitive equilibrium when preferences change over time

Summary. We show the existence of a competitive equilibrium in an economy with many consumers whose preferences may change over time. The demand correspondence of an individual consumer is determined by the set of subgame-perfect equilibrium outcomes in his intrapersonal game. For additively separable preferences with concave period utility functions that are unbounded above, this demand correspondence will satisfy the usual boundary conditions. Whenever consumers can recall their own mixed actions, this correspondence is convex-valued. This ensures the existence of a symmetric competitive equilibrium.Received: 29 July 2004, Revised: 17 November 2004, JEL Classification Numbers: D51, D91, C73. Correspondence to: Thomas MariottiWe thank Michele Piccione for useful comments and suggestions. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System.     

Governance and Management of Collective User‐Based Enterprises: Value‐Creation Strategies and Organizational Configurations

Abstract The evolution of the collective enterprise may be conceptualized in three phases throwing into relief five strategies for the creation of value. The first corresponds to the emergence of a collective enterprise, an innovation in itself. The second, the spread of the innovation by replication, is linked to federalization and to the beginning of standardization. The tension between innovation and standardization begin to make a difference as early as this replication phase, but later it becomes more critical. It forces the collective enterprise to avoid wholesale standardization, an outmoded option, and instead allows space for considering one of the two strategies for the creation of value in keeping both with its distinctive social economy identity and with the new strategic approaches centred on the competences of the enterprise and the creation of value for the user. Thus, the collective user enterprise may move forward by focusing, i.e., by even greater innovation in its provision for a target group of members. The collective enterprise may also progress by hybridization, i.e., through re‐combining in a better way the innovation and standardization required to respond, effectively and efficiently, to a group of owners that is not only very large, but also highly diversified. The authors identify the organizational configuration for each pattern of value‐creation by concentrating on governance structures and the role of managers .     

The Effect of Disagreement on Noncooperative Bargaining

A seemingly mild assumption of the standard alternating offers bargaining model under risk is that the breakdown event is not strictly worse than the worst agreement. When this assumption is relaxed the structure of the equilibrium set of agreements changes in an interesting way. We analyse the effect of disagreement on equilibrium, and relate our result to a class of outside option models. Journal of Economic Literature Classification Number: C78.     

Markets as communication systems

As the information relative to endowments, costs and preferences is dispersed among many agents, the quality of resource allocation depends on the ability of markets to communicate information inside the economic system. Because information is transferred through negotiation and transaction behaviors, the network of trading relations defines the channels through which it flows. In the present study, we use new computational tools to analyze the performance of two wholesale trade institutions widely used around the world: network trading and marketplace trading. Whilst network trading and marketplace trading disseminate far fewer bits of information than a perfectly transparent benchmark market, they often manage to generate an allocation of resources that is almost as good. In many cases, network trading proves more effective than marketplace trading (contrary to a common preconception). This surprising performance of network trading is linked to a form of indirect arbitrage induced by connections between networks. Implications for market design and public policy making are presented, along with prospects for further research.     

Users' perceptions of the free,virtual-only service experience

Like manufacturing multinational enterprises, multinational banks, although being more subject to local regulation and market preferences, are increasingly changing their international attitude. Namely, they rely on foreign activities not only as a means to exploit their own competitive advantages within foreign markets, but also to access exclusive assets, resources, and competencies that could be transferred back to the whole network to enhance and strengthen their competitive advantages. The reported research refers to data on the evolution of the Italian banks' foreign initiatives in the 1998–2004 period. Using such data, the authors investigate the determinants of the coexistence of strategies that are both competence-exploiting and competence-enhancing, using the traditional eclectic approach.