Mouse Chromosome 11

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/46996/1/335_2004_Article_BF00648429.pd

When capital follows profitability: Non-linear residual income dynamics

Economic reasoning suggests that capital follows profitability. This study introduces into residual income valuation "capital follows profitability" investment dynamics whereby capital investments are guided by the profitability of underlying investment opportunities. These investment dynamics predict convex versus linear relations between future and current residual income, with slope and convexity dependent on investment opportunity. We test these predictions against the linear information dynamics (LID) proposed by Ohlson (1995) and Feltham and Ohlson (1996), with supportive results. These findings point the way to further development of links between firm value and the economics of value creation. © 2001 Kluwer Academic Publishers

The allocation of value for jointly provided services

Caller I.D. service, whereby the telephone number of the calling party is visually displayed to the called party during ringing, is now available in some areas of the U.S., but it is restricted to calls within a local calling area, and for which the calling and called party are customers of the same local telephone company. If Caller I.D. service is extended nationwide, identification of a long-distance call will, in a typical case, require the participation of three companies: the local exchange carrier originating the call, the long-distance carrier, and the local exchange carrier terminating the call. How shall the revenues from the service be divided among the participating firms? We apply cooperative game theory to address this question