The importance of reputation in the auditing of companies: A game theory analysis

Numerous, mainly empirical, studies of auditing behaviour have recently looked at the “reputation” of the auditor and the size of fees it attracts. Our model of the auditing market advances the study of the fundamental principles involved in determining behaviour in relation to the rewards and penalties using an extensive-form game of the auditing process. We set up a two-player fraud detection game with bribes, bonuses and fines faced by an auditor. Our model yields that the auditor’s reputation, reflected in the size of bonuses, is critical to establishing a non-fraudulent behaviour by the client. Hence the model confirms expected behaviour. We further find the new insight, that while the existence of penalties deters fraud by the client, their size is not critical. This is a new understanding of what determines auditor behaviour. It is the perception of a possible penalty that moves the auditor in the direction of executing a thorough investigation using his acquired expertise

CONSUMER PANACEA OVER INTERNET USAGE IN PAKISTAN

The present age is the era of information technology and everywhere microwaves are scattered. Everybody wants to explore itself with this information technology and happenings taking place of Internet for the purpose of education, awareness, entertainment and especially interaction with strangers. In Pakistan, the awareness of internet usage is increasing and people are gaining knowledge about online buying and selling. Although the Internet may well empower consumers, there is a paucity of systematic conceptual, analytical, or empirical research indicating that the Internet will in fact lead to more and better information, which in turn will lead to better consumer decision making. The Internet is not, in and of itself, a monolithic entity subject to broad generalizations. It is a complex phenomenon, unlike anything else in history and not completely understood. This research finds that consumers who have more positive beliefs about Internet apparel shopping have more positive attitude toward Internet apparel shopping than do consumers who have less positive beliefs about Internet apparel shopping and consumers who have more social support for Internet apparel shopping perceive more social acceptance of Internet apparel shopping than do consumers who have less social support for Internet apparel shopping.e-Marketing, internet usage.

Corporate strategies – the institutional approach

The present paper introduces a model of corporate strategies, based on institutional theories of the firm and formalized with the concepts of the theory of games. Corporate strategies are balanced outcomes of four social games: capital market, corporate governance, product market and social responsibility. Two empirical applications of the model are then introduced: a qualitative one, consisting in comparative study of strategies deployed by Royal Dutch Shell and Israel Corporation, then a quantitative one, presenting a study of capital accumulation and operational efficiency in 79 companies listed in the Warsaw Stock Exchange.institutional economics, strategy, corporation

Simulation models of technological innovation: A Review

The use of simulation modelling techniques in studies of technological innovation dates back to Nelson and Winter''s 1982 book "An Evolutionary Theory of Economic Change" and is an area which has been steadily expanding ever since. Four main issues are identified in reviewing the key contributions that have been made to this burgeoning literature. Firstly, a key driver in the construction of computer simulations has been the desire to develop more complicated theoretical models capable of dealing with the complex phenomena characteristic of technological innovation. Secondly, no single model captures all of the dimensions and stylised facts of innovative learning. Indeed this paper argues that one can usefully distinguish between the various contributions according to the particular dimensions of the learning process which they explore. To this end the paper develops a taxonomy which usefully distinguishes between these dimensions and also clarifies the quite different perspectives underpinning the contributions made by mainstream economists and non-mainstream, neo-Schumpeterian economists. This brings us to a third point highlighted in the paper. The character of simulation models which are developed are heavily influenced by the generic research questions of these different schools of thought. Finally, attention is drawn to an important distinction between the process of learning and adaptation within a static environment, and dynamic environments in which the introduction of new artefacts and patterns of behaviour change the selective pressure faced by agents. We show that modellers choosing to explore one or other of these settings reveal their quite different conceptual understandings of "technological innovation".economics of technology ;

A Survey of Monte Carlo Tree Search Methods

Monte Carlo tree search (MCTS) is a recently proposed search method that combines the precision of tree search with the generality of random sampling. It has received considerable interest due to its spectacular success in the difficult problem of computer Go, but has also proved beneficial in a range of other domains. This paper is a survey of the literature to date, intended to provide a snapshot of the state of the art after the first five years of MCTS research. We outline the core algorithm's derivation, impart some structure on the many variations and enhancements that have been proposed, and summarize the results from the key game and nongame domains to which MCTS methods have been applied. A number of open research questions indicate that the field is ripe for future work

Learning in evolutionary environments

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Social Capital

This paper surveys research on social capital. We explore the concepts that motivate the social capital literature, efforts to formally model social capital using economic theory, the econometrics of social capital, and empirical studies of the role of social capital in various socioeconomic outcomes. While our focus is primarily on the place of social capital in economics, we do consider its broader social science context. We argue that while the social capital literature has produced many insights, a number of conceptual and statistical problems exist with the current use of social capital by social scientists. We propose some ways to strengthen the social capital literature.development, growth, identification, inequality, networks, social capital, trust,