Who's minding the store? motivating and monitoring hired managers at small, closely held firms: the case of commercial banks

We test whether the gains from hiring an outside manager exceed the principal-agent costs of owner-manager separation at 266 small, closely held U.S. commercial banks. Our results suggest that hiring an outside manager can improve a bank's profit efficiency, but that these gains depend on aligning the hired managers with owners via managerial shareholdings. We find that over-utilizing this control mechanism results in entrenchment, while under-utilization is costly in terms of foregone profits. This study provides a relatively unfettered test of mitigating principal-agent costs, because these small banks cannot rely on market forces or blocks of outside investors to monitor managers.Small business ; Banks and banking - Costs ; Bank management

Private takings

This paper considers the implications associated with a recent Supreme Court ruling that can be interpreted as supporting the use of eminent domain in transferring the property rights of one private agent—a landowner—to another private agent—a developer. Compared to voluntary exchange, when property rights are transferred via eminent domain, landowners’ investments in their properties become more inefficient and, as a result, any benefit associated with mitigating the holdout problem between landowners and the developer is reduced. Social welfare can only increase if the holdout problem is significant; otherwise, social welfare will fall when property rights are transferred via eminent domain.Eminent domain

Dryland salinity, coordinating action and economic policy: a role for contracts?

The problem of addressing dryland salinity at a landscape is considered in the context of using economic incentives to encourage change in land use by individual landholders to adopt salinity mitigating actions where a public asset of significant value is threatened. This paper reviews the principal-agent problem and looks at mechanisms which give incentives to address natural resource management problems, and in particular, the role of contracts between the Government and the landholders for achieving environmental objectives. Consideration is then given to the potential for empirical analysis of these policies in practice and their effectiveness in achieving the desired environmental outcomes.salinity, economic incentives, contracts, hidden information, Environmental Economics and Policy,

Pseudorehearsal in value function approximation

Catastrophic forgetting is of special importance in reinforcement learning, as the data distribution is generally non-stationary over time. We study and compare several pseudorehearsal approaches for Q-learning with function approximation in a pole balancing task. We have found that pseudorehearsal seems to assist learning even in such very simple problems, given proper initialization of the rehearsal parameters

How Rebate Bans, Discriminatory MLS Listing Policies, and Minimum Service Requirements Can Reduce Price Competition for Real Estate Brokerage Services and Why It Matters

Institutional characteristics of a typical residential real estate transaction may create a causal link between commission rate reductions and service degradation. Such a link mitigates agents’ incentive to compete on commission rates. Rebate bans, discriminatory MLS listing policies, and minimum service requirements strengthen the link thereby frustrating greater commission rate competition. Eliminating rebate bans, discriminatory MLS listing policies and minimum service requirements will increase commission rate competition and reduce wasteful rent seeking by agents.

The prosecution of environmental offences in New Zealand

This paper will examine the background law regarding environmental offences under the Resource Management Act 1991 (NZ), prosecution trends, sentencing for RMA offences (including principles of sentencing, sentencing discretion, legislative guidance, appellate guidance, guideline judgments, and tariffs), the use of costs in conjunction with sentencing, recent appeal judgments, and finally draw conclusions regarding consistency and sentencing in relation to environmental offences. Where relevant comparisons will be made with the Australian jurisdictions

Harmonising Basel III and the Dodd Frank Act through International Accounting Standards – Reasons why International Accounting Standards Should Serve as “Thermostats

Why should differences between regulatory and accounting policies be mitigated? Because mitigating such differences could facilitate convergence – as well as financial stability. The paper ―Fair Value Accounting and Procyclicality: Mitigating Regulatory and Accounting Policy Differences through Regulatory Structure Reforms and Enforced Self Regulation‖ illustrates how the implementation of accounting standards and policies, in certain instances, have contrasted with Basel Committee initiatives aimed at mitigating procyclicality and facilitating forward looking provisioning. The paper also highlights how and why differences between regulatory and accounting policies could (and should) be mitigated. This paper focuses on how recent regulatory reforms – with particular reference to the Dodd Frank Act, impact fair value measurements. Other potential implications for accounting measurements and valuation, will also be considered. Given the tendencies for discrepancies to arise between regulatory and accounting policies, and owing to discrepancies between Basel III and the Dodd Frank Act, would a more imposing and commanding role for international standards not serve as a powerful weapon in harmonizing Basel III and Dodd Frank – whilst mitigating regulatory and accounting policy differences