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This working paper is the first draft of our co-authored publication, "An Empirical Evaluation of Accounting Income Numbers," Journal of Accounting Research 6, 1968, pp.159-78. While undated, it subsequently was presented at the November 1967 Seminar on the Analysis of Security Prices organized by the Center for Research in Security Prices (CRSP) at the University of Chicago. It was included in the November 1967 Proceedings of the Seminar on the Analysis of Security Prices. In 1986, the published version received American Accounting Association’s inaugural award for Seminal Contributions to the Accounting Literature. Interest in the historical development of the paper was rekindled by the American Accounting Association appointing the authors as its 2012 co-Presidential Scholars and organizing a Plenary Session entitled “Ball & Brown [1968]: A Seed That Made a Difference” at its 2012 Annual Meeting in Washington, D.C.

This paper introduces the theory of agency, identifies key concepts, relationships, and logics of agency. Norms of agency are identified and discussed, including the fiduciary norm. Problems of agency are identified and discussed. Applications of agency theory are made to regulation, the legislative representative, and diplomacy.This 1973 paper was the first to identify many of the central concepts and logics associated with the theory of agency and was the first to make applications to social institutions. This paper and Stephen Ross's 1973 paper were the first to explicitly propose agency theory, and this paper was also the first to develop the approach in an extended way. This paper is posted in order to make it generally available to scholars interested in the theory of agency.

(Revised 4/29/15, with minor edits by Craig William French)Abstract by Craig William FrenchThis paper reprints a slightly edited version of Jack L. Treynor's 1961 CAPM manuscript, which has previously been unavailable to the public. The author's facsimile of the original was obtained thanks to the kind generosity of Mr. and Mrs. Treynor. Edits in the present version, which differ from the original, include minor typographical corrections and minor notation differences for some variables in the formulae. Pagination is as in the original. In 1958, Jack Treynor was employed by Arthur D. Little. That summer he took a three-week vacation to Evergreen, Colorado, during which he produced forty-four pages of mathematical notes on capital asset pricing and capital budgeting. Over the next two years, Treynor refined his notes into what is in all likelihood the first CAPM. Treynor gave a copy of this early model to John Lintner at Harvard in 1960. While in business school at Harvard from 1953 through 1955, Mr. Treynor had taken nearly every finance course offered, and though he signed up for Lintner’s economics course he was forced to cancel due to a schedule conflict. In 1960, John Lintner was the only economist he knew even slightly. Treynor refined his 1960 model into the 45-page “Market Value, Time, and Risk” [the present paper]. This paper, Treynor (1961), develops the CAPM using the concept of experiment space to quantify risk and risk relations. Without his knowledge or encouragement, one of Mr. Treynor’s colleagues sent the draft to Merton Miller in 1961, after Miller had moved to the University of Chicago from Carnegie Institute of Technology. Miller sent the paper to Franco Modigliani at MIT in the spring of 1962, and Modigliani invited Treynor to embark on a program of graduate work at MIT under his supervision. Treynor did so during the 1962-1963 academic year; in addition to Modigliani’s course, he took Bob Bishop’s price theory and Ed Kuh’s econometrics courses, among others. By the fall of 1962, Treynor had consolidated the first part of Treynor (1961), on the single-period model, into “Toward a Theory of Market Value of Risky Assets,” and presented it to the MIT finance faculty.A more complete description of the development of the Treynor CAPM may be found in French, Craig W., The Treynor Capital Asset Pricing Model. Journal of Investment Management, Vol. 1, No. 2, pp. 60-72, 2003. Available at SSRN: http://ssrn.com/abstract=447580.A reprint of Treynor's 1962 paper, “Toward a Theory of Market Value of Risky Assets,” may be found in French, Craig W., Jack Treynor's 'Toward a Theory of Market Value of Risky Assets' (December 28, 2002). Available at SSRN: http://ssrn.com/abstract=628187.

This paper is an empirical investigation into the validity of some theses posed in [5]. There it is stated (1) that the individual is able to evaluate his income level on a zero-one scale in a cardinal way, and (2) that the resulting evaluation U(y) of a steady income system at a level y under specific assumptions is approximately equal to A (y: uo2) where A is a lognormal distribution function with parameters u, o2. In this paper these statements are empirically investigated on the basis of a consumer survey conducted by the Belgian Consumer Union. Moreover, approximate relationships between the values of u, o2 and several variables, such as income, family size, age, job, stability of income, etc., have been derived. It turns out that o2 is an individual constant, but that u can be explained for a considerable part by the variables family size and income level. Most notable is the dependence of the individual's welfare evaluation or income, a phenomenon that is called "preference drift." It might lead to major changes in parts of the existing economic theory on consumer behavior and social welfare.