Why principals tolerate biases of inaccurate agents

Some agents are more accurate than others in estimating the best policy. The more accurately an agent estimates a policy's effects, the more he will resist biases, such as bribes from a special interest. Thus, a special interest needs to pay a larger bribe to an accurate agent than to an inaccurate agent. The accurate agent who is biased will then more likely cause harm than does an inaccurate agent who favors the special interest. Therefore, the principal may gain more from controlling biases of an accurate agent than of an inaccurate one. Thus, high ability of public officials may be associated with little corruption.     

Credit claiming

We consider a leader and a subordinate he appoints who work in a team. The public observes the organization’s performance, but not the separate contribution of the leader or of the subordinate. The leader may therefore claim credit for the good work of his subordinate. We find conditions which induce the leader to claim credit (both truthfully and untruthfully), and the conditions which lead the leader to appoint a subordinate of low ability.JEL Classification: M5Björn Segendorff gratefully acknowledge financial support from The Swedish Council for Research in Humanities and Social Sciences (HSFR, F0357/97). We are also grateful for comments by an anonymous referee.     

中国房地产行业盈余管理模型的构建及实证分析

本文研究中国上市房地产企业的盈余管理行为。本文发现，传统应计制下的盈余管理模型无法较好地拟合中国房地产行业盈余管理的特征。在关注房地产行业经营和财务处理方面特殊之处的基础上，通过详细分析预售制度和会计处理的特点，建立了以预收账款作为被解释变量的预收模型。运用该模型对房地产行业的盈余管理行为进行了检验．其检验效果和拟合优度要优于改进的修正琼斯模型。经过实证检验，认为上市房地产企业利用预收账款，存在微弱的正向盈余操纵。     

Whose experience matters in the boardroom? The effects of experiential and vicarious learning on emerging market entry

Using an organizational learning perspective, we develop arguments about vicarious learning through board interlocks and its relation to experiential learning. Although it is well established that firms learn from board interlocks, little attention has focused on which types of interlocks are most consequential and why. We distinguish between the relative advantages of various tie attributes such as experience, authority, and credibility and argue that these distinctions lead to measureable differences in learning outcomes. We further demonstrate that whether vicarious learning substitutes or complements focal firm experiential learning depends upon the type of interlock involved. After accounting for the endogeneity of ties, we find support for our framework in a longitudinal analysis of foreign investments by German firms in emerging economies between 1990 and 2003. Copyright © 2013 John Wiley & Sons, Ltd.     

Regulatory tune-ups

Regulators cannot continuously and perfectly monitor firms. The alternative considered here supposes the regulator sets prices at discrete, unforeseen, times. I show that when marginal cost follows a stochastic diffusion process, but the regulator only irregularly adjusts the regulated price, the optimal price may be less than or greater than the expected level of marginal costs. The regulated price should be higher the steeper the demand curve, the lower the discount rate, and the greater the variance of costs. The social benefit of changing the price following a change in marginal cost is usually greater if at the time price was set marginal cost was low.     

THE ELECTORAL COSTS OF SPECIAL INTEREST POLITICS WHEN VOTERS ARE IGNORANT*

It is widely believed that the free-rider problem and the incentives to build minimum winning coalitions cause politics to reflect the preferences of special interest groups. Nevertheless, if voters do not know all the positions of all the candidates, then a candidate who proposes policies that benefit the public at large may defeat a candidate who depends on the support of special interests. Moreover, even if the latter candidate can win, he must use a publicity strategy which allows any voter to hear of proposals that benefit groups other than the voter's.     

When a Loser Gains: Free Riding in the Innovation of Network Goods

We consider duopolists innovating and producing a good subject to network externalities. If successful in R&D, a firm sells both the old product and the new one. The new product increases the utility of its user; it also generates a higher network externality than does the old product. A firm which fails to innovate nevertheless profits from the success of the rival: the network effect raises the value of the old product it still produces. A firm free-rides on the innovative efforts of another firm, reducing the incentives of any firm to innovate.     

A Theoretic Analysis of Extent of Lender Participation in a Participating Mortgage

A participating mortgage is a loan in which a lender accepts a below-market coupon rate in return for a share (participation) in the cash flows generated by income-producing real property. The cash flows provided by participation are classified as contingent interest and are intended to compensate the lender for additional risk exposure as well as the reduction in coupon rate. In this paper, we present a partial equilibrium wealth-maximizing model to estimate the extent of lender participation and an analysis of the factors affecting it. The results of formal comparative statics analysis show that the lender's percentage participation is, in general, positively related to changes in the loan-to-value ratio and threshold cash flows above which participation is payable. Among yet other results, a change in the contracted loan life has an ambiguous effect on the lender's percentage participation. Then, in an effort to resolve ambiguities in the comparative statics results, we employ a numerical procedure in conducting sensitivity analyses. This allows us to estimate percentage participation levels, and their elasticities, under various assumptions regarding the underlying factors. JEL Classification: G21, C65     

Signaling,network externalities,and subsidies

A signal may be more effective the greater the number of people who use the same signal, thereby creating a network externality and potentially generating multiple equilibria. A subsidy to the signal can increase efficiency, and the signalers may benefit from the subsidy even if they pay taxes to finance it. But people who benefit from the signal may oppose too large a subsidy, because a large subsidy could destroy the signaling value.