This paper examines the amount of precautionary savings and wealth inequality arising from life-span uncertainty by comparing saving behavior under perfect insurance arrangements with that arising under imperfect arrangements, namely, when longevity risk can be pooled only with members of one's own family. The central findings of the paper are that (1) perfecting insurance arrangements can sharply lower savings in both intergenerationally altruistic and life-cycle economies and that (2) in altruistic economies perfecting annuity insurance can greatly influence inequality; indeed, in the long run in our model, switching from imperfect family insurance to perfect insurance can mean the difference between absolute inequality and absolute equality.

Résumé. Soixante‐deux vérificateurs/praticiens ont pris part à une expérience d'estimation du solde d'un compte. Ayant reçu au préalable un matériel d'apprentissage à la fois écrit et oral, ils ont utilisé quatre techniques de déduction (FDC, FDP, EPE, et EFH) afin de quantifier leurs croyances subjectives ayant trait au solde de comptes clients d'un cas de vérification. Leurs réponses furent par la suite comparées aux résultats d'une étude de simulation portant sur six cents (600) échantillons, au moyen de la règle de pointage quadratique, de même qu'à la distribution résultant d'un consensus parmi tous les sujets en utilisant la mesure de Kolmogorov‐Smirnov. Les résultats montrent que la technique de déduction FDP produit la distribution de probabilités préalables la plus précise pour utilisation dans le contexte de l'analyse Bayesienne. Les trois autres techniques de déduction se sont révélées égales entre elles, dans la mesure où leur précision était inférieure à celle de la technique de déduction FDP.

Sixty‐two practising auditors participated in an account balance estimation experiment. Having been provided with written and oral training material, they used four elicitation techniques (CDF, PDF, EPS, and HFS) to quantify their subjective beliefs regarding the accounts receivable balance of an audit case study. Their responses were compared to the results of a 600 sample simulation study, using the quadratic scoring rule. Their responses were also compared to the consensus distribution of all subjects using the Kolmogorov‐Smirnov measure. The results indicated that PDF is the elicitation technique generating the most accurate prior probability distribution for use in Bayesian analysis. The other three elicitation techniques were about equal in the degree to which they were less accurate than the PDF technique.

Under the laws of most countries, a distinction is made between gains and losses by businesses. Losses that must be “carried forward” are subjept to two penalties: a loss of interest, and expiration. Previous examinations have focused on the higher expected tax payments such a tax system without “full loss offset” imposes on risky projects. This paper presents a dynamic analysis of the impact of taxation on investment when gains and losses are treated asymmetrically. The results demonstrate how firm characteristics and the timing of taxes can influence behaviour.

This paper brings some empirical evidence to the construction of a more disaggregated view of disequilibrium. Individual data on firms collected by INSEE through periodic Business Surveys are used to construct the distribution of firms over the four possible disequilibrium regimes. Then the behavior of this distribution over time is analyzed by estimating dynamic conditional logit models on panel data.

This paper examines the amount of precautionary savings and wealth inequality arising from life-span uncertainty by comparing saving behavior under perfect insurance arrangements with that arising under imperfect arrangements, namely, when longevity risk can be pooled only with members of one's own family. The central findings of the paper are: (1) perfecting insurance arrangements can lower savings in intergenerationally altruistic and life-cycle economies and (2) in altruistic economies perfecting annuity insurance can influence in-equality; indeed, in the long run in the model, switching from imperfect family insurance to perfect insurance can mean the difference between absolute inequality and absolute equality.

This paper analyzes the incentive effects of alternative legal systems on the auditor's decision making process. The first system, termed strict liability, holds the auditor liable whenever there is a loss, and the second system, termed negligence, holds the auditor liable for losses arising from the auditor's deviation from a prescribed due care standard. The auditor is assumed to have ex ante limited knowledge of the financial state of the client and the standard setting process. He revises his beliefs on the client's financial state based on a costless signal that may be interpreted as an internal audit report. The analysis shows that signal “quality” and auditor's perception of the client's financial state jointly determine the level of liability required to induce the auditor to adopt a socially optimal due care level. As in Simon's (1982) Model, negligence with supplementary insurance is preferred to strict liability. Further, negligence is shown to operate with less information than strict liability, in contrast to models such as Green (1978) and Shavell (1978). Résumé. Cet article analyse les effets incitatifs de systèmes juridiques alternatifs sur le processus décisionnel du vérificateur. Le premier système, dit de responsabilité stricte, considère le vérificateur responsable à chaque fois qu'il y a une perte, et le deuxième système, dit de négligence, considère le vérificateur responsable des pertes résultant de sa déviance d'une norme prescrite. Le vérificateur est supposé posséder ex ante une connaissance limitée de la situation financière du client ainsi que du processus de normalisation. Il révise ses opinions portant sur la situation financière du client à la lumière d'un signal sans frais qui peut être assimilé à un rapport de vérification interne. L'analyse montre qu'un signal «qualité» ainsi que la perception du vérificateur quant à la situation financière du client déterminent conjointement le niveau de responsabilité requis pour inciter le vérificateur à retenir un niveau de soin raisonnable socialement optimal. De même que le modèle de Simon (1982), le système de négligence avec assurances additionnelles est préféré à la responsabilité stricte. De plus, il est montré que le système de négligence fonctionne avec moins d'information que le système de responsabilité stricte, par opposition à d'autres modèles tels Green (1978) et Shavell (1978).