Informed principal, moral hazard, and the value of a more informative technology

We analyze a principal-agent model with moral hazard in which the principal has private information about the technology. We characterize Perfect Bayesian Equilibria of the contracting game that possess the following properties: (i) a principal with a more informative technology ends up earning less profits than a principal with a less informative one does; (ii) compared to the complete information case, the actions implemented by the privately informed principal can be distorted; (iii) the agent can end up being better off when the principal has private information.

The value of information in an agency model with moral hazard

I show that the principal and the agent may each prefer that the principal or the agent has imperfect information about the principal's technology in a principal-agent environment with moral hazard. Principals expend considerable resources on data cumulation and analysis. However, such investments in information acquisition are benecial only if the agent will know that the principal is not ignorant or it allows the principal to implement a dierent action. When the principal is perfectly informed about her technology, the agent prefers to be ignorant. In addition, the value of perfect information for the agency is negative if the principal would implement the same action with either possible technology. I also investigate the dierences between ex ante and ex post contracting, and the ramications of the principal being ignorant or potentially ignorant about the technology. Finally, I determine if the principal's utility varies continuously with the degree of informativeness of the agent about the principal's technology. In this vein, I determine whether the agent's uncertainty may make the principal better o if she has the less informative technology.

On common agency with informed principals

This thesis consists of three chapters that have as unifying subject the frame-work of common agency with informed principals. The first two chapters analyze the economic effects of privately informed lobbying applied to tariff protection (Chapter 1) and to customs unions agreements (Chapter 2). The third chapter investigates the choice of retailing strutures when principals (the producers) are privately informed about their production costs. Chapter 1 analyzes how lobbying affects economic policy when the interest groups have private information. I assume that the competitiveness of producers are lobbies private information in a Grossman and Helpman (1994) lobby game. This allows us to analyze the e¤ects of information transmission within their model. I show that the information transmission generates two informational asymmetry problems in the political game. One refers to the cost of signaling the lobby's competitiveness to the policy maker and the other to the cost of screening the rival lobby's competitiveness from the policy maker. As an important consequence information transmission may improve welfare through the reduction of harmful lobbying activity. Chapter 2 uses the framework of chapter 1 to study a customs union agreement when governments are subject to the pressure of special interest groups that have better information about the competitiveness of the industries they represent. I focus on the agreement's effect on the structure of political influence. When join a customs union, the structure of political pressure changes and with privately informed lobbies, a new effect emerges: the governments can use the information they learn from the lobby of one country to extract rents from the lobbies of the other country. I call this the "information transmission effect". This effect enhances the governments'bargaining power in a customs union and makes lobbies demand less protection. Thus, I find that information transmission increases the welfare of the agreement and decreases tari¤s towards non-members. I also investigate the incentives for the creation of a customs union and find that information transmission makes such agreement more likely to be politically sustainable. Chapter 3 investigates the choice of retailing structure when the manufacturers are privately informed about their production costs. Two retailing structures are analyzed, one where each manufacturer chooses her own retailer (exclusive dealing) and another where the manufacturers choose the same retailer (common agency). It is shown that common agency mitigates downstream competition but gives the retailer bargaining power to extract informational rents from the manufacturers, while in exclusive dealing there is no downstream coordination but also there are no incentives problem in the contract between manufacture and retailer. A pre- liminary characterization of the choice of the retailing structure for the case of substitute goods shows that when the uncertainty about the cost increases relatively to the size of the market, exclusive dealing tends to be the chosen retailing structure. On the other hand, when the market is big relatively to the costs, common agency emerges as the retailing structure. This thesis has greatly benefited from the contribution of Professors Humberto Moreira and Thierry Verdier. It also benefited from the stimulating environment of the Toulouse School of Economics, where part of this work was developed during the year of 2007.

Principal preparation and training : a look at China and its issues

Purpose: The purpose of this paper is to provide an understanding of principal preparation and training in China by providing a background discussion of principal preparation in a number of countries. As an illustration, it provides an overview of the curriculum used in the initial preparation of school principals at Beijing Normal University.-----Design/methodology/approach: The paper draws mainly on writing and research from China, Australia and the USA to explore principal preparation and training in China.-----Findings: In addition to providing a rich description of principal preparation in China, the paper's main findings comprise seven key challenges that confront China as it endeavours to provide quality principal preparation. These challenges include China's diversity and uneven social, cultural and educational development; limited resources in some regions throughout China; the place and importance of study tours for principal preparation; the teaching approach used to train principals; the process used for assessing principal learning during their training programs; the limited transfer of learning from the classroom to the school environment; and the timing of training for principals.-----Practical implications: Each of the challenges arising here raises important practical implications for developers of principal training programs.-----Originality/value: The paper paints a picture of principal preparation in China and raises a number of issues and challenges with which it continues to grapple. Of note is that China is not alone in facing some of these ongoing concerns.

Risk-assessment practices in the private rental sector : implications for low-income renters (Final Report)

This report focuses on risk-assessment practices in the private rental market, with particular consideration of their impact on low-income renters. It is based on the fieldwork undertaken in the second stage of the research process that followed completion of the Positioning Paper. The key research question this study addressed was: What are the various factors included in ‘risk-assessments’ by real estate agents in allocating ‘affordable’ tenancies? How are these risks quantified and managed? What are the key outcomes of their decision-making? The study builds on previous research demonstrating that a relatively large proportion of low-cost private rental accommodation is occupied by moderate- to high-income households (Wulff and Yates 2001; Seelig 2001; Yates et al. 2004). This is occurring in an environment where the private rental sector is now the de facto main provider of rental housing for lower-income households across Australia (Seelig et al. 2005) and where a number of factors are implicated in patterns of ‘income–rent mismatching’. These include ongoing shifts in public housing assistance; issues concerning eligibility for rent assistance; ‘supply’ factors, such as loss of low-cost rental stock through upgrading and/or transfer to owner-occupied housing; patterns of supply and demand driven largely by middle- to high-income owner-investors and renters; and patterns of housing need among low-income households for whom affordable housing is not appropriate. In formulating a way of approaching the analysis of ‘risk-assessment’ in rental housing management, this study has applied three sociological perspectives on risk: Beck’s (1992) formulation of risk society as entailing processes of ‘individualisation’; a socio-cultural perspective which emphasises the situated nature of perceptions of risk; and a perspective which has drawn attention to different modes of institutional governance of subjects, as ‘carriers of specific indicators of risk’. The private rental market was viewed as a social institution, and the research strategy was informed by ‘institutional ethnography’ as a method of enquiry. The study was based on interviews with property managers, real estate industry representatives, tenant advocates and community housing providers. The primary focus of inquiry was on ‘the moment of allocation’. Six local areas across metropolitan and regional Queensland, New South Wales, and South Australia were selected as case study localities. In terms of the main findings, it is evident that access to private rental housing is not just a matter of ‘supply and demand’. It is also about assessment of risk among applicants. Risk – perceived or actual – is thus a critical factor in deciding who gets housed, and how. Risk and its assessment matter in the context of housing provision and in the development of policy responses. The outcomes from this study also highlight a number of salient points: 1.There are two principal forms of risk associated with property management: financial risk and risk of litigation. 2. Certain tenant characteristics and/or circumstances – ability to pay and ability to care for the rented property – are the main factors focused on in assessing risk among applicants for rental housing. Signals of either ‘(in)ability to pay’ and/or ‘(in)ability to care for the property’ are almost always interpreted as markers of high levels of risk. 3. The processing of tenancy applications entails a complex and variable mix of formal and informal strategies of risk-assessment and allocation where sorting (out), ranking, discriminating and handing over characterise the process. 4. In the eyes of property managers, ‘suitable’ tenants can be conceptualised as those who are resourceful, reputable, competent, strategic and presentable. 5. Property managers clearly articulated concern about risks entailed in a number of characteristics or situations. Being on a low income was the principal and overarching factor which agents considered. Others included: - unemployment - ‘big’ families; sole parent families - domestic violence - marital breakdown - shift from home ownership to private rental - Aboriginality and specific ethnicities - physical incapacity - aspects of ‘presentation’. The financial vulnerability of applicants in these groups can be invoked, alongside expressed concerns about compromised capacities to manage income and/or ‘care for’ the property, as legitimate grounds for rejection or a lower ranking. 6. At the level of face-to-face interaction between the property manager and applicants, more intuitive assessments of risk based upon past experience or ‘gut feelings’ come into play. These judgements are interwoven with more systematic procedures of tenant selection. The findings suggest that considerable ‘risk’ is associated with low-income status, either directly or insofar as it is associated with other forms of perceived risk, and that such risks are likely to impede access to the professionally managed private rental market. Detailed analysis suggests that opportunities for access to housing by low-income householders also arise where, for example: - the ‘local experience’ of an agency and/or property manager works in favour of particular applicants - applicants can demonstrate available social support and financial guarantors - an applicant’s preference or need for longer-term rental is seen to provide a level of financial security for the landlord - applicants are prepared to agree to specific, more stringent conditions for inspection of properties and review of contracts - the particular circumstances and motivations of landlords lead them to consider a wider range of applicants - In particular circumstances, property managers are prepared to give special consideration to applicants who appear worthy, albeit ‘risky’. The strategic actions of demonstrating and documenting on the part of vulnerable (low-income) tenant applicants can improve their chances of being perceived as resourceful, capable and ‘savvy’. Such actions are significant because they help to persuade property managers not only that the applicant may have sufficient resources (personal and material) but that they accept that the onus is on themselves to show they are reputable, and that they have valued ‘competencies’ and understand ‘how the system works’. The parameters of the market do shape the processes of risk-assessment and, ultimately, the strategic relation of power between property manager and the tenant applicant. Low vacancy rates and limited supply of lower-cost rental stock, in all areas, mean that there are many more tenant applicants than available properties, creating a highly competitive environment for applicants. The fundamental problem of supply is an aspect of the market that severely limits the chances of access to appropriate and affordable housing for low-income rental housing applicants. There is recognition of the impact of this problem of supply. The study indicates three main directions for future focus in policy and program development: providing appropriate supports to tenants to access and sustain private rental housing, addressing issues of discrimination and privacy arising in the processes of selecting suitable tenants, and addressing problems of supply.

Decentred optical axes and aberrations along principal visual field meridians

Suggestions that peripheral imagery may affect the development of refractive error have led to interest in the variation in refraction and aberration across the visual field. It is shown that, if the optical system of the eye is rotationally symmetric about an optical axis which does not coincide with the visual axis, measurements of refraction and aberration made along the horizontal and vertical meridians of the visual field will show asymmetry about the visual axis. The departures from symmetry are modelled for second-order aberrations, refractive components and third-order coma. These theoretical results are compared with practical measurements from the literature. The experimental data support the concept that departures from symmetry about the visual axis in the measurements of crossed-cylinder astigmatism J45 and J180 are largely explicable in terms of a decentred optical axis. Measurements of the mean sphere M suggest, however, that the retinal curvature must differ in the horizontal and vertical meridians.

An historical analysis of the development of thinking in the principal writings of Malcolm Knowles

Malcolm Shepherd Knowles was a key writer and theorist in the field of adult education in the United States. He died in 1997 and left a large legacy of books and journal articles. This thesis traced the development of his thinking over the 46-year period from 1950 to 1995. It examined the 25 works authored, co-authored, edited, reissued and revised by him during that period. The writings were scrutinised using a literature research methodology to expose the theoretical content, and a history of thought lens to identify and account for the development of major ideas. The methodology enabled a gradual unfolding of the history. A broadly-consistent and sequential pattern of thought focusing on the notion of andragogy emerged. The study revealed that after the initial phases of exploratory thinking, Knowles developed a practical-theoretical framework he believed could function as a comprehensive theory of adult learning. As his thinking progressed, his theory developed into a unified framework for human resource development and, later, into a model for the development of self-directed lifelong learners. The study traced the development of Knowles’ thinking through the phases of thought, identified the writings that belonged within each phase and produced a series of diagrammatic representations showing the evolution of his conceptual framework. The production of a history of the development of Knowles’ thought is the major outcome of the study. In addition to plotting the narrative sequence of thought-events, the history helps to explicate the factors and conditions that influenced Knowles’ thinking and to show the interrelationships between ideas. The study should help practitioners in their use and appreciation of Knowles’ works.

Research participation of individuals with dementia : decisional capacity, informed consent, and considerations for nurse investigators

Decisional capacity is a precious component of personhood and is progressively diminished in dementia. Conducting research with individuals with dementia demands a commitment to ensure the quest for knowledge does not overwhelm the rights of those it is intended to protect. The purposes of this article are to describe current understandings of the concept of decisional capacity, describe recent regulatory developments related to the consideration of additional protections for decisionally impaired adults, and provide recommendations for nurse investigators working with this vulnerable group.

Do strategy choices matter for nascent firms? A study on effectuation and causation impacts on new ventures outcomes

Principal Topic : Nascent entrepreneurship has drawn the attention of scholars in the last few years (Davidsson, 2006, Wagner, 2004). However, most studies have asked why firms are created focussing on questions such as what are the characteristics (Delmar and Davidsson, 2000) and motivations (Carter, Gartner, Shaver & Reynolds, 2004) of nascent entrepreneurs, or what are the success factors in venture creation (Davidsson & Honig; 2003; Delmar and Shane, 2004). In contrast, the question of how companies emerge is still in its infancy. On a theoretical side, effectuation, developed by Sarasvathy (2001) offers one view of the strategies that may be at work during the venture creation process. Causation, the theorized inverse to effectuation, may be described as a rational reasoning method to create a company. After a comprehensive market analysis to discover opportunities, the entrepreneur will select the alternative with the higher expected return and implement it through the use of a business plan. In contrast, effectuation suggests that the future entrepreneur will develop her new venture in a more iterative way by selecting possibilities through flexibility and interaction with the market, affordability of loss of resources and time invested, development of pre-commitments and alliances from stakeholders. Another contrasting point is that causation is ''goal driven'' while an effectual approach is ''mean driven'' (Sarasvathy, 2001) One of the predictions of effectuation theory is effectuation is more likely to be used by entrepreneurs early in the venture creation process (Sarasvathy, 2001). However, this temporal aspect and the impact of the effectuation strategy on the venture outcomes has so far not been systematically and empirically tested on large samples. The reason behind this research gap is twofold. Firstly, few studies collect longitudinal data on emerging ventures at an early enough stage of development to avoid severe survivor bias. Second, the studies that collect such data have not included validated measures of effectuation. The research we are conducting attempts to partially fill this gap by combining an empirical investigation on a large sample of nascent and young firms with the effectuation/causation continuum as a basis (Sarasvathy, 2001). The objectives are to understand the strategies used by the firms during the creation process and measure their impacts on the firm outcomes. Methodology/Key Propositions : This study draws its data from the first wave of the CAUSEE project where 28,383 Australian households were randomly contacted by phone using a specific methodology to capture emerging firms (Davidsson, Steffens, Gordon, Reynolds, 2008). This screening led to the identification of 594 nascent ventures (i.e., firms that are not operating yet) and 514 young firms (i.e., firms that have started operating from 2004) that were willing to participate in the study. Comprehensive phone interviews were conducted with these 1108 ventures. In a likewise comprehensive follow-up 12 months later, 80% of the eligible cases completed the interview. The questionnaire contains specific sections designed to distinguish effectual and causal processes, innovation, gestation activities, business idea changes and ventures outcomes. The effectuation questions are based on the components of effectuation strategy as described by Sarasvathy (2001) namely: flexibility, affordable loss and pre-commitment from stakeholders. Results from two rounds of pre-testing informed the design of the instrument included in the main survey. The first two waves of data have will be used to test and compare the use of effectuation in the venture creation process. To increase the robustness of the results, temporal use of effectuation will be tested both directly and indirectly. 1. By comparing the use of effectuation in nascent and young firms from wave 1 to 2, we will be able to find out how effectuation is affected by time over a 12-month duration and if the stage of venture development has an impact on its use. 2. By comparing nascent ventures early in the creation process versus nascent ventures late in the creation process. Early versus late can be determined with the help of time-stamped gestation activity questions included in the survey. This will help us to determine the change on a small time scale during the creation phase of the venture. 3. By comparing nascent firms to young (already operational) firms. 4. By comparing young firms becoming operational in 2006 with those first becoming operational in 2004. Results and Implications : Wave 1 and 2 data have been completed and wave 2 is currently being checked and 'cleaned'. Analysis work will commence in September, 2009. This paper is expected to contribute to the body of knowledge on effectuation by measuring quantitatively its use and impact on nascent and young firms activities at different stages of their development. In addition, this study will also increase the understanding of the venture creation process by comparing over time nascent and young firms from a large sample of randomly selected ventures. We acknowledge the results from this study will be preliminary and will have to be interpreted with caution as the changes identified may be due to several factors and may not only be attributed to the use/not use of effectuation. Meanwhile, we believe that this study is important to the field of entrepreneurship as it provides some much needed insights on the processes used by nascent and young firms during their creation and early operating stages.

Liability of principal contractor for independent subcontractor considered by the High Court

Case note of Leighton Contractors Pty Ltd v Fox (2009) 258 ALR 673 ----- In Leighton Contractors Pty Ltd v Fox (2009) 83 ALJR 1086 ; 258 ALR 673 the High Court considered the liability of a principal contractor for the negligence of independent subcontractors on a building site. In its decision, the court considered the nature and the scope of the duty owed by principals to independent contractors.

Incorporating uncertainty in environmental models informed by imagery

In this thesis, the issue of incorporating uncertainty for environmental modelling informed by imagery is explored by considering uncertainty in deterministic modelling, measurement uncertainty and uncertainty in image composition. Incorporating uncertainty in deterministic modelling is extended for use with imagery using the Bayesian melding approach. In the application presented, slope steepness is shown to be the main contributor to total uncertainty in the Revised Universal Soil Loss Equation. A spatial sampling procedure is also proposed to assist in implementing Bayesian melding given the increased data size with models informed by imagery. Measurement error models are another approach to incorporating uncertainty when data is informed by imagery. These models for measurement uncertainty, considered in a Bayesian conditional independence framework, are applied to ecological data generated from imagery. The models are shown to be appropriate and useful in certain situations. Measurement uncertainty is also considered in the context of change detection when two images are not co-registered. An approach for detecting change in two successive images is proposed that is not affected by registration. The procedure uses the Kolmogorov-Smirnov test on homogeneous segments of an image to detect change, with the homogeneous segments determined using a Bayesian mixture model of pixel values. Using the mixture model to segment an image also allows for uncertainty in the composition of an image. This thesis concludes by comparing several different Bayesian image segmentation approaches that allow for uncertainty regarding the allocation of pixels to different ground components. Each segmentation approach is applied to a data set of chlorophyll values and shown to have different benefits and drawbacks depending on the aims of the analysis.

The risky behaviour of young drivers : developing a measurement tool

The contribution of risky behaviour to the increased crash and fatality rates of young novice drivers is recognised in the road safety literature around the world. Exploring such risky driver behaviour has led to the development of tools like the Driver Behaviour Questionnaire (DBQ) to examine driving violations, errors, and lapses [1]. Whilst the DBQ has been utilised in young novice driver research, some items within this tool seem specifically designed for the older, more experienced driver, whilst others appear to asses both behaviour and related motives. The current study was prompted by the need for a risky behaviour measurement tool that can be utilised with young drivers with a provisional driving licence. Sixty-three items exploring young driver risky behaviour developed from the road safety literature were incorporated into an online survey. These items assessed driver, passenger, journey, car and crash-related issues. A sample of 476 drivers aged 17-25 years (M = 19, SD = 1.59 years) with a provisional driving licence and matched for age, gender, and education were drawn from a state-wide sample of 761 young drivers who completed the survey. Factor analysis based upon a principal components extraction of factors was followed by an oblique rotation to investigate the underlying dimensions to young novice driver risky behaviour. A five factor solution comprising 44 items was identified, accounting for 55% of the variance in young driver risky behaviour. Factor 1 accounted for 32.5% of the variance and appeared to measure driving violations that were transient in nature - risky behaviours that followed risky decisions that occurred during the journey (e.g., speeding). Factor 2 accounted for 10.0% of variance and appeared to measure driving violations that were fixed in nature; the risky decisions being undertaken before the journey (e.g., drink driving). Factor 3 accounted for 5.4% of variance and appeared to measure misjudgment (e.g., misjudged speed of oncoming vehicle). Factor 4 accounted for 4.3% of variance and appeared to measure risky driving exposure (e.g., driving at night with friends as passengers). Factor 5 accounted for 2.8% of variance and appeared to measure driver emotions or mood (e.g., anger). Given that the aim of the study was to create a research tool, the factors informed the development of five subscales and one composite scale. The composite scale had a very high internal consistency measure (Cronbach’s alpha) of .947. Self-reported data relating to police-detected driving offences, their crash involvement, and their intentions to break road rules within the next year were also collected. While the composite scale was only weakly correlated with self-reported crashes (r = .16, p < .001), it was moderately correlated with offences (r = .26, p < .001), and highly correlated with their intentions to break the road rules (r = .57, p < .001). Further application of the developed scale is needed to confirm the factor structure within other samples of young drivers both in Australia and in other countries. In addition, future research could explore the applicability of the scale for investigating the behaviour of other types of drivers.