For a common resource, we suggest that the benefits of fixed cost allocations lie not in inducing optimal utilization of available capacity but in deciding how much capacity to acquire. In the presence of sequential information asymmetry between the owner and two symmetric users of the resource, we show that cost allocations form a part of the optimal incentive contract. We derive an optimal cost allocation scheme and provide an explicit link between the allocated costs under this scheme and the fixed costs of the resource. Résumé. Selon les auteurs, pour une ressource commune, les avantages de la répartition des coûts fixes résident non pas dans l'induction d'une utilisation optimale de la capacité disponible, mais dans la décision relative à la capacité devant être acquise. En présence d'asymétrie de l'information séquentielle entre le propriétaire et deux utilisateurs symétriques de la ressource, les auteurs démontrent que la répartition des coûts est un élément qui entre dans le contrat d'intéressement optimal. Ils dérivent un plan optimal de répartition des coûts et établissent un lien explicite entre les coûts répartis au moyen de ce plan et les coûts fixes de la ressource.

Douglas V. DeJong, Daniel W. Collins, Explanations for the Instability of Equity Beta: Risk-Free Rate Changes and Leverage Effects, The Journal of Financial and Quantitative Analysis, Vol. 20, No. 1 (Mar., 1985), pp. 73-94

Presents a study on the use of the methods of experimental economics to address the role of experimental economics research in auditing and discusses the features of a good economic experiment. Method of study; New insights that can be offered by the methods of experimental economics into the demand and supply of auditing; Implications for further research.

Agency problem, Laboratory experiments, Negligence liability rule, Strict liability rule

This paper provides experimental evidence on forward induction as a refinement criterion. In the basic extensive form, one of the two players chooses to play a battle-of-the-sexes game or to receive a certain payoff. According to forward induction, choosing to play the game is a signal about intended action. Though the presence of the outside option changes play, we find only limited support for the forward-induction hypothesis. The effects of the outside option also reflect the creation of a focal point through the asymmetry created by offering the outside option to one of the two players.

This paper studies The Netherlands' private sector self-regulation initiative (“The Peters Committee”) to improve corporate governance practices. We examine the relation between firm value and corporate governance characteristics before and after the private sector initiative. We find the initiative had no effect on corporate governance characteristics or their relationship with firm value. Event study results suggest the market was skeptical about the success of self-regulation of corporate governance practices in The Netherlands. Our results on The Netherlands self-regulation initiative suggest little should be expected from initiatives that rely on monitoring without enforcement (e.g., similar or weaker initiatives in other European Union (EU) countries).