Does Fair Value Accounting Reduce Prices and Create Illiquidity?

Concerns about the use of fair value accounting commonly focus on the sensitivity of market prices to exogenous liquidity shocks. In this paper, we show that the use of fair value accounting for assets without an active market endogenously creates illiq- uidity. The underlying mechanism is the discretion in fair value reports when prices are unavailable. Firms use this discretion to report aggressively, leading to two market e ects. On the plus side, by revealing an upper bound on an asset's value, fair value reporting leads to lower prices than would occur in a conservative regime. This is an indication that prices are more e cient than under conservatism, as the reports protect investors from paying information rents. The downside is that fair value reports cannot credibly convey a lower bound on an asset's value, causing illiquidity. We con rm these e ects in a laboratory experiment

Contre le libertarianisme de droite : l’accès aux ressources pour une justice minimale

Dans ce mémoire, nous aborderons des questions portant sur la légitimité de la propriété privée, à quels moments est-ce que la propriété privée cesse d’être légitime ? Nous défendrons que chaque individu détient le droit inaliénable d’accéder aux ressources, et que cet accès aux ressources doit lui fournir tous les moyens nécessaires pour qu’il puisse se développer jusqu’à ce qu’il soit pleinement autonome. Ainsi, lorsque la propriété privée de certains individus bloque l’accès aux ressources, il doit y avoir des mécanismes de redistribution permettant de compenser la nuisance produite par la propriété privée. Par ailleurs, l’accès aux ressources peut être remplacé par une gamme d’opportunités de base : les opportunités de développement nécessaires à l’atteinte de l’autonomie en société. La redistribution n’a donc pas besoin de viser l’accès aux ressources, elle doit garantir que tous aient accès aux opportunités de base. Nous circonscrirons notre réflexion à un cadre de justice minimale dans le but d’attribuer une nécessité morale à chacune des conclusions de ce mémoire. Autrement dit, si les paramètres de redistribution développés au terme de ce mémoire représentent le strict minimum pour qu’une société se soucie de la justice, alors il est nécessaire que toutes les sociétés instituent au moins ces paramètres de redistribution. Pour démontrer le minimalisme de ces paramètres de justice, nous les déduirons à partir de la position des libertariens de droite. Considérant que leur position se veut la plus minimale possible, si nos paramètres de redistribution sont pleinement consistants avec leur position, alors ces paramètres relèvent de la justice minimale.This paper is based on a crucial question of social justice: when does the private property stop to be morally legitimate? This paper will defend a universal right to have access to all the resources needed for the acquisition of a personal autonomy. Therefore, when the private properties of some people prevent others to gain a sufficient access to the resources they need, we have to institute a system of wealth redistribution in order to compensate the prejudice of loosing access to the resources. Furthermore, it is possible to substitute the right to resources by a group of basic opportunities, such as an education system accessible without indebtedness. Since the basic opportunities grant an access to personal autonomy, people do not need to have access to resources anymore. Therefore, private properties are legitimate if and only if there is a system of wealth redistribution ensuring that everyone has an access to the basic opportunities. In this paper, every conclusion concerning the wealth redistribution is bound to minimal justice. In other words, if a society fails to grand access to the basic opportunities, this society is necessarily unjust. To ensure that ours conclusions are bound to minimal justice, we will also demonstrate their consistency with right libertarianism. Although, every conclusion concerning basic opportunities come from the no harm principle and the full self-ownership, the two basis of right libertarianism

Distinguishing indeterminate belief from "risk-averse" preferences

I focus my discussion on the well-known Ellsberg paradox. I find good normative reasons for incorporating non-precise belief, as represented by sets of probabilities, in an Ellsberg decision model. This amounts to forgoing the completeness axiom of expected utility theory. Provided that probability sets are interpreted as genuinely indeterminate belief (as opposed to “imprecise” belief), such a model can moreover make the “Ellsberg choices” rationally permissible. Without some further element to the story, however, the model does not explain how an agent may come to have unique preferences for each of the Ellsberg options. Levi (1986, Hard choices: Decision making under unresolved conflict. Cambridge, New York: Cambridge University Press) holds that the extra element amounts to innocuous secondary “risk” or security considerations that are used to break ties when more than one option is rationally permissible. While I think a lexical choice rule of this kind is very plausible, I argue that it involves a greater break with xpected utility theory than mere violation of the ordering axiom