Credit Ratings as Coordination Mechanisms

In this paper, we provide a novel rationale for credit ratings. The rationale that we propose is that credit ratings can serve as a coordinating mechanism in situations where multiple equilibria can obtain. We show that credit ratings provide a "focal point" for firms and their investors. We explore the vital, but previously overlooked implicit contractual relationship between a credit rating agency and a firm. Credit ratings can help fix the desired equilibrium and as such play an economically meaningful role. Our model provides several empirical predictions and insights regarding the expected price impact of ratings changes, the discreteness in funding cost changes, and the effect of the focus of organizations on the efficacy of credit ratings.http://deepblue.lib.umich.edu/bitstream/2027.42/39841/3/wp457.pd

Credit Ratings as Coordination Mechanisms

In this paper, we provide a novel rationale for credit ratings. The rationale that we propose is that credit ratings can serve as a coordinating mechanism in situations where multiple equilibria can obtain. We show that credit ratings provide a "focal point" for firms and their investors. We explore the vital, but previously overlooked implicit contractual relationship between a credit rating agency and a firm. Credit ratings can help fix the desired equilibrium and as such play an economically meaningful role. Our model provides several empirical predictions and insights regarding the expected price impact of ratings changes, the discreteness in funding cost changes, and the effect of the focus of organizations on the efficacy of credit ratings.coordination, credit ratings, multiple equilibria

Run-Time Selection of Coordination Mechanisms in Multi-Agent Systems

This paper presents a framework that enables autonomous agents to dynamically select the mechanism they employ in order to coordinate their inter-related activities. Adopting this framework means coordination mechanisms move from the realm of being imposed upon the system at design time, to something that the agents select at run-time in order to fit their prevailing circumstances and their current coordination needs. Empirical analysis is used to evaluate the effect of various design alternatives for the agent's decision making mechanisms and for the coordination mechanisms themselves

Information Technology as Coordination Infrastructure

Business information technology is traditionally viewed as information provision technology. In this view, organizations use their IT to implement databases that provide people with information when they want it. This view is persistent even though information provision is never an end in itself but always has the further purpose to support the coordination of activities of people. The role if IT as coordination technology became more prominent in the 1980s with the advent of network technology, that allowed activities across different businesses to be coordinated. This trend has accellerated since the growth of Internet usage, and today IT is used to support an increasingly varied range of processes performed by a variety of partners that do not all have a hierarchical relation to each other. This makes it difficult to analyze requirements for IT support and specify IT solutions: Business processes may not be well-defined, and interests of different businesses may clash. This report argues that to deal with this in requirements engineering and IT solution specification, business information technology should not be viewed as IT support for business processes but as IT support for the coordination of activities in one or more businesses. We will identify three basic coordination mechanisms, namely coordination by price, by management, and by shared norms, and for each of these mechanisms, we will identify requirements for IT support. The advent of flexible and standardized networking technology has facilitated the creation of novel coordination mechanisms within these three general paradigms, and we will give an inventory of generalized coordination mechanisms made possible by current IT. Finally, we will draw conclusions for requirements engineering methods for IT support for each of the coordination mechanisms identified by the framework

THE ROLE OF TECHNICAL ASSISTANCE ALLOCATION FROM EUROPEAN STRUCTURAL FUNDS: DEVELOPING ADMINISTRATIVE CAPACITY OF MANAGING AUTHORITIES OR SUPPORTING EUROPENIZATION PROCESSES OF THE DOMESTIC ADMINISTRATIVE SYSTEMS?

After Romania became fully-fledge Member-State of European Union, the impact of the managing authorities for structural funds and cohesion fund have significantly risen within the Romanian public administration system. In the article I highlighted the active role of managing authorities play in establishing new norms, rules and organisational models among national and sub-national institutional actors from its own sectors. From this perspective managing authorities seem to play the role of internal factors which direct Europenization processes designed by supranational actors over national and sub-national institutional actors. The impact of Europenization processes is determined inter alia by the efficiency of managing authorities’ coordination mechanisms. To develop and enhance the performance of managing authorities’ coordination mechanisms there are important technical and financial resources allocated by European Commission through structural funds. Performant coordination mechanisms mean a wider and deeper impact of Europenization processes over domestic institutional actors.Managing authority, structural funds, techinical assistance, inter-institutional coordination, Europenisation processes.

Improving the Price of Anarchy for Selfish Routing via Coordination Mechanisms

We reconsider the well-studied Selfish Routing game with affine latency functions. The Price of Anarchy for this class of games takes maximum value 4/3; this maximum is attained already for a simple network of two parallel links, known as Pigou's network. We improve upon the value 4/3 by means of Coordination Mechanisms. We increase the latency functions of the edges in the network, i.e., if $\ell_e(x)$ is the latency function of an edge $e$, we replace it by $\hat{\ell}_e(x)$ with $\ell_e(x) \le \hat{\ell}_e(x)$ for all $x$. Then an adversary fixes a demand rate as input. The engineered Price of Anarchy of the mechanism is defined as the worst-case ratio of the Nash social cost in the modified network over the optimal social cost in the original network. Formally, if \CM(r) denotes the cost of the worst Nash flow in the modified network for rate $r$ and \Copt(r) denotes the cost of the optimal flow in the original network for the same rate then [\ePoA = \max_{r \ge 0} \frac{\CM(r)}{\Copt(r)}.] We first exhibit a simple coordination mechanism that achieves for any network of parallel links an engineered Price of Anarchy strictly less than 4/3. For the case of two parallel links our basic mechanism gives 5/4 = 1.25. Then, for the case of two parallel links, we describe an optimal mechanism; its engineered Price of Anarchy lies between 1.191 and 1.192.Comment: 17 pages, 2 figures, preliminary version appeared at ESA 201

Coordination Implications of Software Coupling in Open Source Projects

The effect of software coupling on the quality of software has been studied quite widely since the seminal paper on software modularity by Parnas [1]. However, the effect of the increase in software coupling on the coordination of the developers has not been researched as much. In commercial software development environments there normally are coordination mechanisms in place to manage the coordination requirements due to software dependencies. But, in the case of Open Source software such coordination mechanisms are harder to implement, as the developers tend to rely solely on electronic means of communication. Hence, an understanding of the changing coordination requirements is essential to the management of an Open Source project. In this paper we study the effect of changes in software coupling on the coordination requirements in a case study of a popular Open Source project called JBoss