Corporate Governance and the Shareholder: Asymmetry, Confidence, and Decision-Making

In the decade following the ten-plus percent stockmarket collapse of 2000, regulators enacted a myriad of regulations in response to increasing angst experienced by U.S. capital market retail investors. Systemic asymmetric disclosures have fractured investor confidence prompting many commentators to characterize the relationship between Wall Street and the investment community on main street as dire. Though copious works exist on the phenomenon of corporate behaviors, especially matters of shareholder welfare, weak boards, pervious governance mechanisms, and managerial excess, current literature has revealed a dearth in corporate governance praxis specific to the question and effects of asymmetric disseminations and its principal impact on the retail/noninstitutional accredited investor\u27s (NIAI) confidence and decision-making propensities. This phenomenological study is purposed to bridging the gap between the effects of governance disclosure and the confidence and decision-making inclinations of NIAIs. Conceptual frameworks of Akerlof\u27s information theory and Verstegen Ryan and Buchholtz\u27s trust/risk decision making model undergirded the study. A nonrandom purposive sampling method was used to select 21 NIAI informants. Analysis of interview data revealed epistemological patterns/themes confirming the deleterious effects of asymmetrical disseminations on participants\u27 investment decision-making and trust behaviors. Findings may help academicians, investors, policy makers, and practitioners better comprehend the phenomenon and possibly contribute to operating efficiencies in the capital markets. Proaction and greater assertiveness in the investor/activist community may provide an impetus for continued regulatory reforms, improved transparency, and a revitalization of public trust as positive social change outcomes

London's Housing Crisis; A System Dynamics Analysis of Long-term Developments: 40 Years into the Past and 40 Years into the Future

In London, housing affordability has been rapidly declining over the past few decades. Furthermore, London, and the UK in general, has experienced persistent volatility in house prices, new housing supply, and housing finance. These features characterise the main aspects of London’s housing crisis which is the topic of this PhD. Our existing understanding of this crisis remains largely fragmented and mostly qualitative. In this thesis, I build a novel quantitative system dynamics model based on existing literature and statistical data to explain developments in London’s housing system since 1980, with a particular focus on the feedback loops between house prices and housing credit. The model is shown to be capable of endogenously reproducing the salient features of the system’s past behaviour, such as the excessive growth in prices and housing credit as well as the characteristic boom-bust cycles. Extending the simulation into the future under business-as-usual continues to generate exponential growth and increasingly larger amplitude oscillations. Furthermore, I simulate a number of policies aimed at mitigating the unchecked growth and volatility. Supply side policies considered include a steep increase in affordable housing construction, a relaxation of planning restrictions, and a combination of the two. These policies show promise in slowing the growth in house prices (and housing debt) but do little to curb market volatility. Demand side policies considered include introducing a capital gains tax on all residential property, lowering average loan-tovalue ratios, enforcing historically anchored property valuations for mortgage lending, and a combination of all three. These policies, particularly when combined, appear to be highly effective in eliminating periodic oscillations. They also serve to slow down the worsening of affordability to some extent, but demand-side policies alone do not appear capable of stopping the trend in deteriorating affordability. In order to eliminate largescale market volatility and simultaneously stop the continual worsening of affordability, it is shown to be necessary to intervene on both sides of the problem with a portfolio of targeted policies. In conclusion, I argue that the unit of analysis in housing policy and discourse must become feedback loops rather than individual factors. Integrated, feedback-centred, dynamic simulation tools are needed in long-term planning for the affordability and stability of the housing market in London and in the UK. The system dynamics model introduced in this thesis serves as a proof of concept for a promising approach to policymaking in the area of the UK’s housing policy

Transaction Machines – The Infrastructure of Financial Markets

This thesis describes financial markets as complex machines in the broader sense, as systems for organizing informational flows and performing certain functions in regards to the processing of transactions. We focus on the transaction infrastructure of financial markets, on the flow architecture that allows transactions to happen in the first place. First, in order for a financial market to function there needs to be some mechanism for aggregating and matching disparate transactional requests. Another mechanism is then needed in order to untangle and reduce the complexity of overlapping exposures between participants. The history of finance shows us that there are indeed certain patterns and regularities, procedures and mechanisms present in any system that processes financial transactions. The thesis describes this sequence of functions as transaction machines, understood as complex socio-technical systems for the execution of financial transactions. This is achieved by leveraging a specific philosophical account of technology coupled with a computational and evolutionary account of financial markets. We ultimately focus two types of transaction machines, performing the matching and clearing of financial flows, acting as the infrastructure of financial markets. We also provide a sketch for an evolutionary trajectory of these machines, evolving under the demands and needs of marker participants. From medieval fairs to the millisecond electronic platforms of today, transaction machines have gradually transitioned from human-based ‘hardware’ to electronic automated platforms. Moreover, we also describe the complex power dynamics of contemporary transaction machines. In as much as they are the dominant hubs of global financial markets, the thesis argues for the necessity of a more granular account of the functioning and evolution of transaction machines

The regulation of financial derivates: an agent-based model approach

In 2007-08, the world experienced the greatest financial crisis since 1929, which turned – in the following years – in one of the deepest and most prolonged periods of economic stagnation of modern history. While there were multiple conditions that originated the so-called Great Financial Crisis, a general consensus emerged that financial derivatives played an important role in the outbreak of the crisis and in posing a credible threat that the entire global financial system could melt down. As a reaction, several countries in the world and international organizations agreed on a policy response to reformulate the global architecture for the regulation of the financial system, including the financial derivatives industry. Yet, the fundamental question of whether the contemporary system of derivatives regulation can effectively shield the financial system from sources of systemic risk is still undecided, for reasons that especially relate to the complexity of the networked structure of the financial derivatives industry. As a way to contribute to tackle this issue, this work aims to investigate whether an important component part of the present system of financial derivatives regulation – namely, Central Counterparts (CCPs) Clearing Houses – provide a more resilient financial system. The research question is addressed through a simulation approach based on an agent-based modeling of the financial derivatives industry. The results of the simulation show that the introduction of a CCP improves the resilience of the simulated financial derivatives industry, although it does not completely shield the financial system from disruptions that may especially depend from the degree of interconnectedness of financial operators and the magnitude of defaults. In sum, this work offers some methodological guidance for enriching the repertoire of tools at disposal of financial regulatory authorities in anticipating the consequences of interventions in the financial industry

Rules for Growth: Promoting Innovation and Growth Through Legal Reform

The United States economy is struggling to recover from its worst economic downturn since the Great Depression. After several huge doses of conventional macroeconomic stimulus - deficit-spending and monetary stimulus - policymakers are understandably eager to find innovative no-cost ways of sustaining growth both in the short and long runs. In response to this challenge, the Kauffman Foundation convened a number of America’s leading legal scholars and social scientists during the summer of 2010 to present and discuss their ideas for changing legal rules and policies to promote innovation and accelerate U.S. economic growth. This meeting led to the publication of Rules for Growth: Promoting Innovation and Growth Through Legal Reform, a comprehensive and groundbreaking volume of essays prescribing a new set of growth-promoting policies for policymakers, legal scholars, economists, and business men and women. Some of the top Rules include: • Reforming U.S. immigration laws so that more high-skilled immigrants can launch businesses in the United States. • Improving university technology licensing practices so university-generated innovation is more quickly and efficiently commercialized. • Moving away from taxes on income that penalize risk-taking, innovation, and employment while shifting toward a more consumption-based tax system that encourages saving that funds investment. In addition, the research tax credit should be redesigned and made permanent. • Overhauling local zoning rules to facilitate the formation of innovative companies. • Urging judges to take a more expansive view of flexible business contracts that are increasingly used by innovative firms. • Urging antitrust enforcers and courts to define markets more in global terms to reflect contemporary realities, resist antitrust enforcement from countries with less sound antitrust regimes, and prohibit industry trade protection and subsidies. • Reforming the intellectual property system to allow for a post-grant opposition process and address the large patent application backlog by allowing applicants to pay for more rapid patent reviews. • Authorizing corporate entities to form digitally and use software as a means for setting out agreements and bylaws governing corporate activities. The collective essays in the book propose a new way of thinking about the legal system that should be of interest to policymakers and academic scholars alike. Moreover, the ideas presented here, if embodied in law, would augment a sustained increase in U.S. economic growth, improving living standards for U.S. residents and for many in the rest of the world

Embracing Insecurity: Harm Reduction Through a No-Fault Approach to Consumer Data Breach Litigation

The lack of a clear remedy for data subjects whose private information has been compromised in data breaches prompts expensive and exploratory litigation that encounters difficulties with the unique set of risks posed by the data economy. Examining the market forces and risk environments posed by the data economy yields the conclusion that vulnerability is a guaranteed feature and investments in cybersecurity go largely unrewarded. The importance of data to our economy requires that the benefit of potential solutions to data subjects be weighed against the potential costs of burdening innovation. This Note proposes that the ideal solution should prioritize harm reduction by implementing a no-fault resolution system to provide an efficient remedy for compromised data subjects and a safe harbor-based compliance program to improve cybersecurity without hampering the direction of innovation

Ground water and surface water under stress

Presented at Ground water and surface water under stress: competition, interaction, solutions: a USCID water management conference on October 25-28, 2006 in Boise, Idaho.Includes bibliographical references.The A&B Irrigation District in south-central Idaho supplies water to irrigate over 76,000 acres. The district's 14,660-acre Unit A is supplied with water from the Snake River. Unit B is comprised of 62,140 acres of land irrigated by pumping groundwater from the Eastern Snake Plain Aquifer (ESPA) using 177 deep wells. Pumping depths range from 200 to 350 feet. Water from Unit B wells is distributed to irrigated lands via a system of short, unlined lateral canals averaging about 3/4-mile in length with capacities of 2 to 12 cfs. During the period from 1975 to 2005, the average level of the ESPA under the A&B Irrigation District dropped 25 ft and as much as 40 ft in some locations. This has forced the district to deepen some existing wells and drill several new wells. To help mitigate the declining aquifer, the district and its farmers have implemented a variety of irrigation system and management improvements. Improvements have involved a concerted effort by the district, landowners, and local and federal resource agencies. The district has installed variable speed drives on some supply wells, installed a SCADA system to remotely monitor and control well pumps, and piped portions of the open distribution laterals. This has permitted farmers to connect farm pressure pumps directly to supply well outlets. Farmers have helped by converting many of their surface irrigation application systems to sprinklers, moving farm deliveries to central locations to reduce conveyance losses, and installing systems to reclaim irrigation spills and return flows