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The election mechanism has difficulties in selecting the most able candidates and deselecting less able ones. In a simple model we explore how the power of elections as a selection device can be improved by requiring higher vote thresholds than 50% for incumbents.

I consider a common agency model under adverse selection with a risk averse agent. Contracting takes place ex ante when all players have symmetric, although incomplete, information. The coordination problem between principals leads to more distortion in the optimal policy from the first best compared to the case of risk neutrality. In contrast with the risk neutral case the principals are unable to screen completely the agent's preferences if she/he is sufficiently risk averse. However, if the agent is almost risk neutral the output is separating, but the transfer schedules keep track of asymmetric contractual externality. When risk aversion goes to zero the transfers become truthful as in the complete information case.

We study the existence of undominated elements of acyclic relations. A sufficient condition for the existence is given without any topological assumptions when the dominance relation is finite valued. The condition says that there is a point such that all dominance sequences starting from this point are reducible. A dominance sequence is reducible, if it is possible to remove some elements from it so that the resulting subsequence is still a dominance sequence. Necessary and sufficient conditions are formulated for closed acyclic relations on compact Hausdorff spaces. Reducibility is the key concept also in this case. A representation theorem for such relations is given.

We study the relation between cognitive abilities and stockholding using the recent Survey of Health, Ageing and Retirement in Europe (SHARE), which has detailed data on wealth and portfolio composition of individuals aged 50+ in 11 European countries and three indicators of cognitive abilities: mathematical, verbal fluency, and recall skills. We find that the propensity to invest in stocks is strongly associated with cognitive abilities, for both direct stock market participation and indirect participation through mutual funds and retirement accounts. Since the decision to invest in less information-intensive assets (such as bonds) is less strongly related to cognitive abilities, we conclude that the association between cognitive abilities and stockholding is driven by information constraints, rather than by features of preferences or psychological traits.

This paper analyses competition of moral norms and institutions in a society where a fixed share of people unconditionally complies with norms and the remaining people act selfishly. Whether a person is a norm-complier or selfish is private knowledge. A model of voting-by-feet shows that those norms and institutions arise that maximize expected utility of norm-compliers, taken into account selfish players' behavior. Such complier optimal norms lead to a simple behavioral model that, when combined with preferences for equitable outcomes, is in line with the relevant stylized facts from a wide range of economic experiments, like reciprocal behavior, costly punishment, the role of intentions, giving in dictator games and concerns for social efficiency. The paper contributes to the literature on voting-by-feet, institutional design, ethics and social preferences.

This paper explores the formation of stable network structures in a model with public goods. The multiplicity of equilibria in the non-cooperative formulation of network formation games brings out further difficulties in analyzing stability of network structures. This contrasts with the cooperative game approach where payoffs for agents are predetermined and thereby the multiplicity of equilibrium issues are sidestepped. We took issue with the multiplicity of equilibrium effort levels exerted on a given network structure, and we suggested different stability definitions for such network structures under multiplicity of equilibria. We demonstrated how these stability notions work for the network structures with four agents where breaking and forming links is costless, and the cost of exerting effort level is linear.

Multi-product firms create value by integrating functional activities such as manufacturing across business units. This integration often requires making functional managers responsible for implementing standardization, thereby limiting business-unit managers’ authority. Realizing synergies then involves a tradeoff between motivation and coordination. Motivating managers requires narrowly-focused incentives around their area of responsibility. Functional managers become biased toward excessive standardization and business-unit managers may misrepresent local market information to limit standardization. As a result, integration may be value-destroying when motivation is sufficiently important. Providing functional managers only with "dotted-line control" (where business-unit managers can block standardization) has limited ability to improve the tradeoff.

Incentive contracts can be proposed to a dominant firm that has been excluded from the pollution permit market. We determine the optimal characteristics of a contract considering the trade-off between market efficiency and the cost of public funds. We show that under incomplete information the firm always buys fewer quotas than under complete information. We conclude this study by giving a concrete rule to implement such a contract.

The paper finds that sufficient ambiguity leads to the uniqueness of equilibrium in macroeconomic coordination games. The results have a Keynesian flavour: sufficient optimism gives rise to a Pareto-optimal equilibrium; and sufficient pessimism results in a Pareto-inferior equilibrium. This analysis is applied to a "Big Push" model from the economic growth literature.

This paper analyzes the behavior of subjects in interdependent security experiments which exhibit strategic complementarity. In these experiments, subjects decide whether to pay to mitigate the risk of a loss, but the exact risk depends on the actions of other subjects. Two ranked equilibria exist, and the efficient equilibrium is for all agents to pay for the mitigation. Subjects in the interdependent security experiments rarely coordinate on the efficient equilibrium. Coordination is slightly more common in similar coordination games without the risk mitigation decision. The experiments also compare the effectiveness of two policies at inducing higher levels of mitigation.

We have created an online questionnaire that queries the respondent about whether the policy of pre-market of approval of drugs and devices has behind it any market-failure rationale. The questionnaire interactively interviews the respondent, making a virtual conversation. The point of the questionnaire is to explore whether anyone can provide a reasonable justification for the policy. This article presents the questionnaire and ethically summons 305 relevant economists to complete the questionnaire. We explain why any conscientious researcher is entitled to issue a summons of this kind, and why the summoned economists may have a responsibility to respond. The responses will be collated and reported (without commentary) in a subsequent issue of EJW. The ungated interactive questionnaire: http://www.surveywriter.net/in/survey/survey1427/pma.asp The pdf showing the whole architecture of the questionnaire: http://econjwatch.org/file_download/388/PMAQuestionnaire.pdf

In a recent paper Ganguli and Yang [2009] demonstrate, that there can exist multiple equilibria in a financial market model á la Grossman and Stiglitz [1980] if traders possess private information regarding the supply of the risky asset. The additional equilibria differ in some important respects from the usual equilibrium of the Grossman–Stiglitz type which still exists in this model. This note shows that these additional equilibria are always unstable under learning. This is true for both eductive learning following Guesnerie [2002] and adaptive learning via least–squares estimation (cf. Marcet and Sargent [1988] or Evans and Honkapohja [2001]). Regarding the original Grossman–Stiglitz type equilibrium, the stability results are less clear cut, since this equilibrium might be unstable under eductive learning while it is always stable under adaptive learning.

Applying a standard questionnaire (Lichtenstein and Fischhoff 1977) to a sample of 44 professional investors, we sought for explicit correlations between selected biological characteristics of the investors and the cognitive bias known as overconfidence. We found that both male and female investors showed overconfidence above the subjective probability of 0.7 and underconfidence below this threshold. But the sexes seemed to behave differently when they were totally uncertain of their answers. Experienced and inexperienced investors were overconfident whenever they were 70 percent (or above) confident of their answers. Despite that, experienced investors were relatively more calibrated. Of those who were highly uncertain of their answers, the inexperienced showed less confidence. Moreover, a logistic regression analysis showed that male subjects, fathers, right-handers, and subjects with a university degree and less than five years of experience in stock markets were more prone to the overconfidence effect.

This paper proposes an alternative to standard cardinal tournaments. The analysis contrasts "hybrid" cardinal tournaments to standard cardinal tournaments and piece rates. It shows that providing for partial insurance against common uncertainty via a hybrid tournament (in which the weights on absolute and group average performances are not equal) is always better for the principal than providing for full insurance against common uncertainty via a standard tournament (with equal weights), or than providing for no insurance at all via piece rates. Hybrid tournaments increase the principal's profit because the agents exert more effort in equilibrium.

The market values of online platforms, such as Yahoo, stem from their ability to monetize the clicks they generate for firms advertising on their sites. We exploit a unique dataset on clicks from one of Yahoo's price comparison sites to estimate the determinants of clicks received by online retailers. We find that a firm enjoys a 60% jump in its clicks when it offers the lowest price at the site. This discontinuity is consistent with a variety of models that have been used to rationalize the price dispersion observed in online markets. We also show that one may use estimates of the determinants of a firm's clicks to obtain bounds on its underlying demand parameters, including own- and cross-price elasticities. Our results have potentially significant ramifications for online retailers, platforms, and policymakers: Failure to account for discontinuities distorts parameter estimates by 50 to 100 percent.

This paper investigates who incomplete information impacts the response of prices to nominal shocks. Our baseline model is a variant of the Calvo model in which firms observe the underlying nominal shocks with noise. In this model, the response of prices is pinned down by three parameters: the precision of available information about the nominal shock; the frequency of price adjustment; and the degree of strategic complementarity in pricing decisions. This result synthesizes the broader lessons of the pertinent literature. We next highlight that his synthesis provides only a partial view of the role or incomplete information. In general, the precision of information does not pin down the response of higher-order beliefs. Therefore, once cannot quantify the degree of price inertia without additional information about the dynamics of higher-order beliefs, or the agents' forecasts of inflation. We highlight the distinct role of higher-order beliefs with three extensions of our baseline model, all of which break the tight connection between the precision of information and higher-order beliefs featured in previous work.

We examine the stability of risk preference within subjects by comparing measures obtained from two elicitation methods, an economics experiment with real monetary rewards and a survey with questions on hypothetical gambles. The survey questions have been validated by numerous empirical studies of investment, insurance demand, smoking and alcohol use, and recent studies have shown the experimental measure is associated with several real-world risky behaviors. For the majority of subjects, we find that risk preferences are not stable across elicitation methods. In interval regression models, subjects’ risk preference classifications from survey questions on job-based gambles are not associated with risk preference estimates from the experiment. However, we find that risk classifications from inheritance-based gambles are significantly associated with the experimental measure. We identify some subjects for whom risk preference estimates are more strongly correlated across elicitation methods, suggesting that unobserved subject traits like comprehension or effort influence risk preference stability.

The recent withdrawal of Cox-2 Inhibitors has generated debate on the role of information in drug diffusion: can the market learn the efficacy of new drugs, or does it depend solely on manufacturer advertising and FDA updates? In this study, we use a novel data set to study the diffusion of three Cox-2 Inhibitors ? Celebrex, Vioxx and Bextra ? before the Vioxx withdrawal. Our study has two unique features: first, we observe each patient?s reported satisfaction after consuming a drug. This patient level data set, together with market level data on FDA updates, media coverage, academic articles, and pharmaceutical advertising, allows us to model individual prescription decisions. Second, we distinguish across-patient learning of a drug?s general efficacy from the within-patient learning of the match between a drug and a patient. Our results suggest that prescription choice is sensitive to many sources of information. At the beginning of 2001 and upon Bextra entry in January 2002, doctors held a strong prior belief about the efficacy of Celebrex, Vioxx, and Bextra. As a result, the learning from patient satisfaction is gradual and more concentrated on drug-patient match than on across-patient spillovers. News articles are weakly beneficial for Cox-2 drug sales, but academic articles appear to be detrimental. The impact of FDA updates is close to zero once we control for academic articles, which suggests that FDA updates follow academic articles and therefore deliver little new information to doctors. We find that drug advertising also influences the choice of a patient?s medication. A number of counterfactual experiments are carried out to quantify the influence of information on market shares.

Universities are long-established organisations, and although reinvented themselves several times, major reforms are needed again, underpinned by systematic prospective analyses. A novel method is needed to take into account the wide-ranging and complex factors, shaping the future of the higher education system. ‘Futures’ should be devised in a multi-level structure as the bulk of trends and driving forces are international in their nature and universities are embedded in broader socio-economic systems. This new approach is demonstrated here by devising ‘cascading’ futures for the EU, the European Research and Innovation Area and universities. Several advantages can be expected from this type of prospective analysis: (i) the potential changes of these broader settings, in which universities operate, as well as their impacts on higher education can be explored; (ii) the huge diversity of higher education systems and individual universities can be reflected; and (iii) the likely impacts of different policy options can also be explored. It is also proposed to select foresight programmes from the ‘prospective toolkit’, given their specific features and benefits compared to other prospective methods.

We assume an environment where the current value of an aggregate nonstationary variable is generated by weighting the behavior of a large set of agents who choose to form expectations resorting to more or less outdated information concerning the state of the economy. Agents using recent information are able to produce expectations with a strong component of perfect foresight; agents resorting to outdated information will use predominantly the time series of the assumed variable to learn its long-term value. The main result is that a strong degree of information stickiness may imply a departure from stability (a Neimark-Sacker bifurcation occurs).

SMEs present many particularities which influence to a large extend their functionality and performance. A very deep investigation of more than 60 SMEs has revealed what are the major variables having influence on SMEs organisation and the main features of organisation system. In the first part the paper indicate the variables influencing the SMEs. In the second part there are presented the nine main features of SMEs organisation system.

We extend the model of friendship networks developed by Brueck- ner (2006) in two ways. First, we extend the level of indirect benefits by incorporating benefits from up to three links and explore its impli- cation for the socially optimal and individual e¤ort levels. Next, we generalize the magnetic agent problem by allowing for more than 3 players by restricting ourselves to regular networks that include pay- o¤s from the magnetic agent.

It has been argued in the multi-task agency literature that effort distortion can be mitigated by applying several performance measures in incentive contracts. This paper analyzes the efficient aggregation of multiple performance measures aimed at motivating non-distorted effort. It demonstrates that non-distorted effort can be induced by combining a sufficient quantity of informative performance measures. However, this is only optimal if the required aggregation concurrently maximizes the precision of the agent`s performance evaluation. This paper further illustrates how the optimal performance evaluation is affected by the ability of individual agents to perform relevant tasks.

The main aim of European Union is "to become the most competitive and dynamic world economy based on knowledge, capable for viable economic growth with better work places and greater social cohesion". Competitive advantage in "new economy" has passed from material and financial assets on (to) non-material and non-financial belongings. The key challenge for 21st century companies is knowledge defining, measuring, advancing, valuing and controlling. Characteristics of economy based on knowledge are: • knowledge is used as input and as output, • in the most developed countries i the world, more than half gross of domestic product is based on knowledge, • high technology Industries nearly have doubled their share in output in last two decades, while services based on knowledge increase faster, too, • in new employing number of " knowledge " workers brings on an overage 80% of new jobs, and • increasing of information and knowledge portions in production technologies, but in products, too.

When blogging tools first arrived in 1998, people asked “What’s ablog?” The word “blog” is a contraction of “Web log” and is used both as anoun as well as a verb. To blog is to write content to a blog. By design, blogsare best suited for the spontaneous thoughts and observations of an individual orteam. They are not designed to facilitate rapid-fire back-and-forth discussion ona particular issue. Blogging tools are available as free or moderately pricedservices and as products you purchase and install on your own server. You mayhave noticed recently that many of websites now contain little graphical buttonswith the word XML on them. For example: or or. When you click on the button, all you see is some jumbledtext and computer code [ed: unless you have a newer web browser or anaggregator]. What's this all about? It's an RSS feed, and it's changing the waypeople access the Internet

Expected value theory has been known for centuries to be subject to critique by St. Petersburg paradox arguments. And there is a traditional rebuttal of the critique that denies the empirical relevance of the paradox because of its apparent dependence on existence of credible offers to pay unbounded sums of money. Neither critique nor rebuttal focus on the question with empirical relevance: Do people make choices in bounded St. Petersburg games that are consistent with expected value theory? This paper reports an experiment that addresses that question.

UK radioactive waste management policy making is currently taking place within a participatory and analytic-deliberative decision-making framework; one that seeks to integrate public and stakeholder values and perspectives with scientific and technical expertise. One important aspect of this socio-technical reframing of the radioactive waste problem is an explicit recognition that legitimate and defensible policy making must take into account important ethical issues if it is to be a success. Thus, there is a need for tools to incorporate adequate assessment of ethical issues in a way that is compatible with this approach. The 'ethical matrix' is one such tool used recently to address a range of agricultural and natural resource issues that shows promise for this field. This paper assesses the strengths and limitations of the matrix and outlines a framework for the development of alternative tools to better satisfy the needs of ethical assessment in radioactive waste management decision-making processes.

Information and Communication Technology (ICT) affects to a great extent the output and productivity growth. Evidence suggests that investment growth in ICT has rapidly accelerated the TFP (total factor productivity) growth within the European Union. Such progress is particularly essential for the sectors which themselves produce new technology, but it is dispersing to other sectors, as well. Nevertheless, decrease in ICT investment does not necessarily decline the ICT contribution to output and productivity growth. These variations come out from the problems related to the particular phenomenon proper assessment, but predominantly from the companies' special requirements, as well as the necessary adjustments of labour employed. Hence, this paper aims at estimating the huge distinction in terms of ICT and TFB contributions to labour productivity growth among some of the European member states, as well as the factors which might stand behind the particular findings.

On efficiency grounds, the economics community has to date tended to emphasize price-based policies to address climate change -- such as taxes or a “safety-valve” price ceiling for cap-and-trade -— while environmental advocates have sought a more clear quantitative limit on emissions. This paper presents a simple modification to the idea of a safety valve -- a quantitative limit that we call the allowance reserve. Importantly, this idea may bridge the gap between competing interests and potentially improve efficiency relative to tax or other price-based policies. The last point highlights the deficiencies in several previous studies of price and quantity controls for climate change that do not adequately capture the dynamic opportunities within a cap-and-trade system for allowance banking, borrowing, and intertemporal arbitrage in response to unfolding information.

We study two-sided markets with a finite numbers of agents on each side, and with two-sided incomplete information. Agents are matched assortatively on the basis of costly signals. A main goal is to identify conditions under which the potential increase in expected output due to assortative matching (relative to random matching) is completely offset by the costs of signalling. We also study how the signalling activity and welfare on each side of the market change when we vary the number of agents and the distribution of their attributes, thereby displaying effects that are particular to small markets. Finally, we look at the continuous version of our two-sided market model and establish the connections to the finite version. Technically, the paper is based on the very elegant theory about stochastic ordering of (normalized) spacings and other linear combinations of order statistics from distributions with monotone failure rates, pioneered by R. Barlow and F. Proschan (1966, 1975) in the framework of reliability theory.

Our action is intended towards emphasizing some of the most important issues in Romanian research area, especially with reference to the technical and agricultural research and this because it is important to understand how our research area has evolved i

E-learning is learning based on information technologies, and particularly based on the Interne educational system has a lot of advantages, such as flexibility, availability, time and resources savings and it respects the individual learning rhythm of each of the employees. According as IT area advanced, training’s possibilities of employees were diversified, interactive lessons and training devices on demand, replacing classical lessons. The most competitive sectors of Romanian economy are those which use e-learning solutions. The portfolio of competences, the level of employees’ information, the models and the work methods are essential pre-requisites for the companies’ success. In this context, the investment in training of employees can prove most profitable for company.

The policy recommendations of most economists are based on the rational actor model of human behavior. Behavior is assumed to be self-regarding, preferences are assumed to be stable, and decisions are assumed to be unaffected by social context or frame of reference. The related fields of behavioral economics, game theory, and neuroscience have confirmed that human behavior is other regarding, and that people exhibit systematic patterns of decision-making that are "irrational" according to the standard behavioral model. This paper takes the position that it is these "irrational" patterns of behavior that uniquely define human decision making and that effective economic policies must take these behaviors as the starting point. This argument is supported by game theory experiments involving humans, closely related primates, and other animals with more limited cognitive ability. The policy focus of the paper is global climate change. The research surveyed in this paper suggests that the standard economic approach to climate change policy, with its almost exclusive emphasis on rational responses to monetary incentives, is seriously flawed. In fact, monetary incentives may actually be counter-productive. Humans are unique among animal species in their ability to cooperate across cultures, geographical space and generations. Tapping into this uniquely human attribute, and understanding how cooperation is enforced, holds the key to limiting the potentially calamitous effects of global climate change.

We examine formally Keynes' idea that higher order beliefs can drive a wedge between an asset price and its fundamental value based on expected future payoffs. Higher order expectations add an additional term to a standard asset pricing equation. We call this the higher order wedge, which depends on the difference between higher and first order expectations of future payoffs. We analyze the determinants of this wedge and its impact on the equilibrium price. In the context of a dynamic noisy rational expectations model, we show that the higher order wedge depends on first order expectational errors about the mean set of private signals. This in turn depends on expectational errors about future asset payoffs based on errors in public signals. We show that the higher order wedge reduces asset price volatility and disconnects the price from the present value of future payoffs. The impact of the higher order wedge on the equilibrium price can be quantitatively large.

Two firms are contemplating entry into a market that is viable for only one firm in a good state. We show that even if each firm receives a signal that perfectly reveals a good state, both might strategically delay entry, owing to the fear that the other firm might enter in the same period as well. We also find the conditions where the informed firm will let the rival firm know about the market's profitability and the two will merge to enter the market. We discuss the applications of this model to the oil industry and the generic drug industry. JEL classification: L71, D8

The current National Football League overtime rule favors the team starting on offense. Auctioning off or dividing-and-choosing the starting possession can potentially restore ex post fairness. We find auctions to provide a better outcome when teams have asymmetric information.

Principals who exercise favouritism towards certain agents may harm those who are not so favoured. Other papers have produced evidence consistent with the presence of such favouritism but have been unable to consider methods for controlling it. We address this issue in the context of a natural experiment from English soccer, where one particular league introduced professional referees in 2001-02, thereby changing the financial incentives and monitoring regime faced by these referees. Because the change was not effected in all leagues, the ‘experiment’ has both cross-sectional and intertemporal dimensions. We study the effects of professional referees on an established measure of referee bias: length of injury time in close matches. We find that referees exercised favouritism prior to professionalism but not afterwards, having controlled for selection and soccer-wide effects. The results are consistent with a financial incentive effect as a result of professional referees and indicate that subtle aspects of principal-agent relationships (such as favouritism) are amenable to contractual influence.

Resume Differentes heuristiques ont ete avancees par les psychologues et les economistes afin de rendre compte des comportements sur les marches financiers. Elles soulignent les biais cognitifs qui affectent les croyances individuelles, et s’efforcent d’expliquer dans une certaine mesure les anomalies constatees sur les marches financiers. L’experimentation menee vise a tester les heuristiques de conservatisme, de representativite et d’ancrage-ajustement dans un contexte dynamique de quinze periodes : les sujets recoivent, a chaque periode, une information financiere et revisent individuellement leurs croyances quant a la qualite d’une entreprise. Les croyances observees s’averent incompatibles avec l’hypothese de revision bayesienne: les sujets ont tendance a surevaluer les petites probabilites et a sous-evaluer les fortes probabilites. L’heuristique de representativite est, de la meme maniere, invalidee : le traitement econometrique montre que les sujets sous-ponderent les signaux les plus intenses, preuve qu’ils ne tirent pas parti de leurs intensites informationnelles. Les hypotheses de conservatisme et d’ancrage-ajustement sont au contraire conjointement validees : les sujets sous-ponderent l’information nouvelle quand ils revisent leurs croyances mais ce comportement de revision est pleinement conditionne au fait que les sujets s’ecartent ou se rapprochent d’une valeur d’ancrage.Classification JEL : C11, C91, D8, D9.

This paper considers settlement negotiations between a single defendant and $N$ plaintiffs when there are fixed costs of litigation. When making simultaneous take-it-or-leave-it offers to the plaintiffs, the defendant adopts a divide and conquer strategy. Plaintiffs settle their claims for less than they are jointly worth. The problem is worse when $N$ is larger, the offers are sequential, and the plaintiffs make offers instead. Although divide and conquer strategies dilute the defendant's incentives, they increase the settlement rate and reduce litigation spending. Plaintiffs can raise their joint payoff through transfer payments, voting rules, and covenants not to accept discriminatory offers.

The President and the Senate bargain over the appointment of the Head of a key government department. The operating unit of the department has private information about its operating environment. We model the appointment process as a constrained delegation of policymaking to the operating unit (agency). When the Senate is sufficiently close to the agency the President has to give the agency more authority. On the other hand, given the Senate's ideal point, when the information is more precise the President can tighten delegation bounds.

This paper shows that individual risk-type uncertainty can prevent reforms of the insurance system that would benefit the majority of individuals. We consider the case where a subset of the population is uncertain of their risk type and contrast two insurance regimes the status quo of mandated pooling of all risk types and the reform proposal being insurance with risk-type separation over time, using Bayesian updating. Most individuals would benefit from the reform since their risk type is better than the average but the reform does not occur due to individual uncertainty.

In this paper we performed a basic and common DBA tasks on the two products and measured the time taken and the steps required to complete each task, to assess their relative manageability. The time taken to complete the tasks was then weighted according to their frequency of use in a typical DBA workday to arrive at an overall time savings percentage.

The aim of the paper is to investigate the presence of herding towards the market in Istanbul Stock Exchange (ISE) during the period of 2nd January 1997-29th February 2008. We got the evidence of the existence of herding behavior in ISE by the implementation of the methodology which is based on the cross sectional volatility of the stock returns. On the other hand, the results show that the relation between cross sectional volatility and extreme high or low returns is nonlinear. These results are also supported by the similar evidence got from the analysis of each sector, namely services, financial, industiral and investment trusts sectors. Another methodology which is based on the cross sectional volatility of beta coefficients of the stocks is also implemented in order to get a deeper analysis. The results show that, herding towards the market is a general trend for the whole market but we cannot find the evidence of herding in the periods of December 2003-April 2004 and May-October 2006. Sectoral analysis also show that herding towards market is also valid for all sectors but the periods in which investors do not herd are not same for all sectors

When demand is uncertain and it is costly for the retailer to forecast demand information more accurately, the supplier faces a moral hazard problem. The supplier wishes to induce the retailer to forecast more accurate information which will improve the total profit of the supply chain. This paper provides a theoretical analysis of the optimal buy-back contract, in which the supplier chooses the wholesale and buy-back price to maximize his profits given that the retailer’s inventory order level and private information acquisition decision are both chosen to maximize the retailer’s profits. In contrast to the standard buy-back contract model in which the first best of the system can always be implemented, our model suggests that the supplier pays not only the cost of acquiring information, but also the information rent to induce the retailer to invest in acquiring information. Consequently, the first best of the system cannot be always implemented. Our model explains that Vendor Managed Inventory systems are prevalent while the retailer is better informed than the supplier. Nevertheless, the standard buy-back contract theory contradicts with the empirical facts.

Paper aims sustaining the necessity of adapting studying criteria to the analysed matter and to the times: to the knowledge based economy. It tries to be a proposal to look for profound causes of economic activity results. Methodologically, paper replaces earn marking by the criterion of the place of registering with that Cartesian one of the generating of the plusses of utility. A demonstration of re-assigning results consistence with their adequate source is made on the subject of technology returns. By reinterpreting growth phenomena, the sample points out the role and gains of intellectual activities. Passing beyond the classical period and analyzing by appropriate modern principles, the main conclusion is that all economic actors should grow intellect-intensive inputs in their business.

Machina (2007) formulates a number of experiments, and shows that they can be used to test the Choquet expected utility model. We show that one of them can also be used to test the class of maxmin expected utility preferences in Klibanoff (2001). Those preferences are not consistent with Choquet expected utility preferences in Machina's experiment.

We apply the "Monotone Comparative Statics" method ala Topkis (1978), Edlin and Shannon (1998), and Milgrom and Segal (2002)'s generalized envelope theorem to the three-tier agency model with hidden information and collusion ala Tirole (1986, 1992), thereby provide a framework that can address the issues treated in the existing literature, e.g., Kofman and Lawarree (1993)''s auditing application, in a much simpler fashion. In addition to such a technical contribution, the paper derives some clear and robust implication applicable to corporate governance reform (Propositions 1 (2) and 3).

Recent research has suggested that companies with defined benefit (DB) pensions are sometimes significantly misvalued by the market. This is because the measures of pension cost and pension net liabilities embedded in financial statements can provide a very misleading picture of pension finances, if taken at face value. The more pertinent information on pension finances is relegated to footnotes, which may not receive much attention from portfolio managers. Dramatic swings in the financial conditions of large DB plans around the turn of the decade focused attention on pension accounting practices, and growing dissatisfaction with current accounting standards has prompted the Financial Accounting Standards Board (FASB) to launch a project revamping DB pension accounting. Arguably, the increased attention should have made investors wise to the informational problems, thereby eliminating systematic mispricing in recent years. We test this proposition and conclude that investors continued to misvalue DB pensions, inducing sizable valuation errors in the stock of many companies. Our findings suggest that FASB's current reform efforts could substantially aid the market's ability to value firms with DB pensions.

The content and the organization of work represent dimensions which do not only involve mobilizing competencies but are also dimensions in which competencies are developed. In an organization people create, accumulate or transfer knowledge, ideas, values, attitudes, feelings or experiences. The goal of a learning organization is to improve competency diffusion, to enrich them and to capitalize experiences. Chaos arises when the level of learning of the enterprise reaches a point in which it can no longer deal with the changes in the environment it functions in. In this work we shall try to discuss the potential for transformation of organizations, constantly challenged, even in the world of knowledge.

Various ways of selecting random numbers used in process simulations will be presented in this paper. Special attention will be given to complex phenomena not known enough to be precisely described. Modes of interaction are unknown ; what is known are probabilities of interaction outcome. Such cases are found mostly in social and economic phenomena, such as population growth, economic predictions, decision-making risk analysis, etc.