Beliefs, Bailouts and Spread of Bank Panics

This article highlights the spread of bank panics across countries, as the public reassesses governments' propensity to bailouts. Policymakers decide whether to save collapsing banking systems by weighing social costs of crises against the costs associated with raising taxes to finance rescue packages. Policymakers know those social costs of bank liquidation whereas the public does not. In this setup, financial crises may result from the public's self‐fulfilling prophecies about equilibrium outcomes, as lenders' expectations impinge on the taxation cost of bailouts. It follows that a banking crisis in a country leads creditors to reexamine policymakers' willingness to bailouts in other countries, which eventually makes their banks more vulnerable to self‐confirming depositors' runs.     

Ethical Behaviour in the U.K. Audit Profession: The Case of the Self-Fulfilling Prophecy Under Going-Concern Uncertainties

External auditors owe a professional duty to the company's stockholders and to society in general. However their remuneration is determined by management. The resulting conflicts of interest are particularly acute in distressed companies where the auditors are required to disclose uncertainties regarding future survival. We focus on the consequentialist self-fulfilling prophecy argument whereby auditors may fail to disclose such uncertainties due to the belief that the disclosure itself would precipitate the company's bankruptcy. We find no empirical support for such beliefs for a sample of distressed U.K. companies with audit reports published between 1986 and 1993. Companies whose auditors disclose going concern uncertainties are no more likely to fail than those without such disclosures; indeed three out of four reports containing going concern uncertaintiesare not followed by failure before publication of a subsequent set of accounts. Instead we find that it is the degree of financial distress that drives both bankruptcy and the auditor's going concern disclosure rather than that the disclosure itself causes failure. Belief in the self-fulfilling prophecy effect nevertheless persists, and this despite the profession's clear ethical guidelines that audit opinions should provide an objectively true and fair view, paying no regard to possible consequences. It may be that the continued attractiveness of the self-fulfilling prophecy belief is due to its providing a means of resolving intense auditor/management conflict in what is a particularly complex decision situation. We argue that, if the profession's clear ethical guidelines are to play a greater role in this area, issues such as enforcement will need to be addressed.     

新制度经济学视角下的心理契约:内涵与自我履行机制

心理契约问题近年来愈发引起企业组织与员工的重视,但以往的研究多是从心理学、社会学的视角研究心理契约。文章借鉴新制度经济学对契约的相关研究成果,将组织中的心理契约与新制度经济学结合起来,对心理契约的内涵与特征重新进行界定,认为心理契约应当是平等互惠的、非正式的、不完全的以及自我履行的契约,最后对心理契约的自我履约机制进行了详细的分析。     

History and Coordination Failure

An extensive literature discusses the existence of a virtuous circle of expectations that might lead communities to Pareto-superior states among multiple potential equilibria. It is generally accepted that such multiplicity stems fundamentally from the presence of positive agglomeration externalities. We examine a two-sector model in this class and look for intertemporal perfect foresight equilibria. It turns out that under some plausible conditions, positive externalities must coexist with external diseconomies elsewhere in the model, for there to exist equilibria that break free of historical initial conditions. Our main distinguishing assumption is that the positive agglomeration externalities appear with a time lag (that can be made vanishingly small). Then, in the absence of external diseconomies elsewhere, the long-run behaviour of the economy resembles that predicted by myopic adjustment. This finding is independent of the degree of forward-looking behavior exhibited by the agents.     

关系型契约的特征、内容及履约机制

关系型契约是由未来契约关系的价值所维持的非正式安排。它是一种长期契约和隐含契约,并具有动态性和不断完善的特性。从内容上看,它包含了一般交易所无法包括而存在于科层企业中的指挥、管理和协调等因素。而且,这种关系型契约通过声誉效用机制、信任机制及违约的机会成本来实现自我履约。     

Self-fulfilling Currency Crises and Central Bank Independence

We develop a model of a fixed exchange rate peg arrangement derived from the Barro–Gordon model of rules versus discretion. It is shown that the fixed peg is vulnerable to self-fulfilling currency crises in which the unemployment rate increases, the credibility of the rule decreases, but, paradoxically, the reputation of the policy-maker improves. Delegating monetary policy to an independent central banker does not prevent this type of crisis from arising, and can even make it more costly.
JEL Classification: F 3; F 4     

The risk of the sovereign debt default: the Eurozone crisis 2008–2013

We investigate the relationship of the market pricing of sovereign risk to default, through credit default swap (CDS) spreads for 16 Eurozone countries during 2008q1–2013q3. We take into account, through appropriate non-linear generalized method of moments (GMM) estimations the endogeneity problem. We focus on ‘fiscal space’ (DEBT or FISCAL), and the downgrade announcements (DOWN). We find DEBT (FISCAL) to have significant (insignificant) effects on the CDS concave function, as well as, DOWN in a linear one. It has also been confirmed significant pricing discrimination between South and West Euro Area Periphery (SWEAP) and the core Eurozone, highlighting asymmetries discovered either by the respective size of estimated DEBT coefficients or by the significant effects of DOWN that have only on CDS of SWEAP countries. The current account balance or the inflation rate, as well as, relevant interaction terms seem not to affect the spreads of the EMU. These findings, together with the estimated structural change on CDS pattern in early 2011, coinciding with significant either the DOWN in the pre-crisis period (2008–2010) or the DEBT in the post-crisis one (2011–2013) on the CDS, seem to be consistent with self-fulfilling crises literature and the inherent vulnerability of EMU, on other words, the ‘fragility hypothesis of the Eurozone’.     

自我实现预言效应预期、责任与持续经营审计判断--一项实验研究

本文基于默里的人格理论，利用信念调整模型，通过实验和统计方法研究自我实现预言效应预期这一内在自发性动机、责任压力这一外在引致性动机及其交互作用对持续经营审计判断的影响。研究发现，自我实现预言效应预期导致审计师在持续经营审计判断任务中赋予肯定性证据更多的权重，潜在影响其对公司持续经营能力的判断；而责任压力使得审计师的判断过程更加谨慎、中立，更多地考虑否定性证据，能有效抑制自我实现预言效应对审计判断的不利影响。     

Economics is not always performative: some limits for performativity

The phenomenon of performativity has recently sparked debates about the status of the economic discourse. This paper aims to discuss the subjectivist idea that if economics ‘performs’ (shapes) social reality, rather than merely reflects it, then every theory can be considered ‘true.’ My main goal is to point out three limits of performativity. First, not all theories can be performative since some do not produce empirical landmarks for agents. Second, social institutions restrict performativity. Third, I emphasize the necessity that a theory to be self-fulfilling. This article is a prelude to a new kind of performative studies based on an original definition: a theory performs the world if it implies a behavioral regularity which leads to a general coordination between agents. That is to say, if it becomes a convention à la David Lewis.     

In search of management development in Europe: from self-fulfilling prophecies to organizational competence

This paper gives an overview and a critical analysis of the concept of High Flyer programmes in management development. Based on a discussion of the need for management development in modern knowledge- and service-based organizations, strengths and weaknesses of traditional management development programmes are discussed. In particular, the so-called ‘fast-track’programmes for high-potential employees are presented. This analysis shows that, although management development is supposed to be a vital contributor to organizational competence, learning, and change, High Flyer Programmes are (still) mainly an instrument for individual and personal career development. An alternative interpretation of management development is presented which emphasizes the match between personal growth and organizational learning and which links career, organization development and competitive advantage of the organization. In conclusion, implications for practice and research are discussed.

Quantitative results from the most recent Cranfield Network on European HRM Survey are presented and analysed.