A decentralized model of information pricing in networks

We propose a recursive method of pricing an information good in a network of holders and demanders of this good. The prices are determined via a unique equilibrium outcome in a sequence of bilateral bargaining games that are played by connected agents. If the information is an homogenous, non-depreciating good without network effects we derive explicit formulae which elucidate the role of the link pattern among the players. Particularly, we find out that the equilibrium price is intimately related to the existence of cycles in the network: It is zero if a cycle covers the trading pair and it is proportional to the direct and indirect utility that the good generates otherwise.

Transparency Proposals for European Sovereign Bond Markets

The debate over the possible extension of transparency regulation in Europe to include sovereign bonds has opened up a number of other issues in need of serious consideration. One such issue is the appropriateness of the entire infrastructure supporting the trading of European sovereign bonds. In recent years sovereign issuers have supported the development of an electronic inter-dealer market but have remained unconcerned with the opacity of dealer-to-customer trading. The degree of segmentation in this market is high relative to what exists in nearly all other financial markets. This paper explores why European sovereign bond markets have developed in such a segmented way and considers how this structure could be altered to improve transparency without adversely affecting liquidity, efficiency or the benefits enjoyed by primary dealers and issuers. It is suggested that the structure of the market could be improved greatly if the largest and most active investors were permitted access to the inter-dealer electronic trading platforms. This would solve a number of market imperfections and increase the proportion of market activity that is conducted in a transparent way. The paper argues that sovereign issuers in Europe have the means to provide incentives that would influence dealers to support reduced segmentation. Some practical examples of how this could be achieved are provided and the potential benefits are outlined.

Hull fouling on commercial ships as a vector of macroalgal introduction

Hull fouling is thought to have been the vector of introduction for many algal species. We studied ships arriving at a Mediterranean harbour to clarify the present role of commercial cargo shipping in algal introductions. A total of 31 macroalgal taxa were identified from 22 sampled hulls. The majority of records (58%) were of species with a known cosmopolitan geographical distribution. Due to a prevalence of cosmopolitan species and a high turnover of fouling communities, species composition of assemblages did not appear to be influenced by the area of origin, length of ship or age of coating. In the light of the present results, hull fouling on standard trading commercial vessels does not seem to pose a significant risk for new macroalgal species introductions. However, a high proportion of non-cosmopolitan species found on a ship with non-toxic coating may modify this assessment, especially in the light of the increasing use of such coatings and the potential future changes in shipping routes.

The death blow to unlimited liability in Victorian Britain: The City of Glasgow failure

In 1878, one of Britain's largest banks, the City of Glasgow Bank, collapsed, leaving a huge deficit between its assets and liabilities. As this bank, similar to many other contemporary British banks, had unlimited liability, its failure was accompanied by the bankruptcy of the vast majority of its stockholders. It is generally believed that the collapse of this depository institution revealed the extent to which ownership in large joint-stock banks had been diffused to investors of very modest means. It is also believed that the failure resulted in bank shareholders dumping their shares unto the market. Our evidence, garnered from ownership records, trading data, and stock prices, offers no support for these widely held beliefs. © 2007 Elsevier Inc. All rights reserved.

A framework for assessing the vulnerability of food systems to future shocks

Modem society depends on complex agro-ecological and trading systems to provide food for urban residents, yet there are few tools available to assess whether these systems are vulnerable to future disturbances. We propose a preliminary framework to assess the vulnerability of food systems to future shocks based on landscape ecology's 'Panarchy Framework'. According to Panarchy, ecosystem vulnerability is determined by three generic characteristics: (1) the wealth available in the system, (2) how connected the system is, and (3) how much diversity exists in the system. In this framework, wealthy, non-diverse, tightly connected systems are highly vulnerable. The wealth of food systems can be measured using the approach pioneered by development economists to assess how poverty affects food security. Diversity can be measured using the tools investors use to measure the diversity of investment portfolios to assess financial risk. The connectivity of a system can be evaluated with the tools chemists use to assess the pathways chemicals use to flow through the environment. This approach can lead to better tools for creating policy designed to reduce vulnerability, and can help urban or regional planners identify where food systems are vulnerable to shocks and disturbances that may occur in the future. (c) 2005 Elsevier Ltd. All rights reserved.

An information approach to international currencies

Models of currency competition focus on the 5% of trading attributable to balance-of-payments flows. We introduce an information approach that focuses on the other 95%. Important departures from traditional models arise when transactions convey information. First, prices reveal different information depending on whether trades are direct or though vehicle currencies. Second, missing markets arise due to insufficiently symmetric information, rather than insufficient transactions scale. Third, the indeterminacy of equilibrium that arises in traditional models is resolved: currency trade patterns no longer concentrate arbitrarily on market size. Empirically, we provide a first analysis of transactions across a full market triangle: the euro, yen and US dollar. The estimated transaction effects on prices support the information approach.

The impact of equity markets and corporate governance on labour market flexibility

Drawing from various literatures, this article explores links between equity markets and labour market flexibility. Various data sources are used to test relationships for a set of OECD countries, controlling for other likely influences on flexibility such as government and industrial relations institutions. The results are generally supportive as regards employment flexibility: equity market trading activity is associated with shorter job tenure, higher activity rates, and greater employment change over the cycle. However, the relationship between equity markets and pay flexibility is less statistically robust to the addition of controls.

Assessing the Transaction Costs of Firms in the EU ETS: Lessons form Ireland

Until now, there has been little empirical evidence that EU Emissions Trading Scheme (ETS) transaction costs are incurred at firm level. The transaction costs (internal costs, capital costs, consultancy and trading costs) incurred by Irish firms under the EU ETS during its pilot phase (2005-2007) were measured and analysed. Evidence for the sources of transaction costs, their magnitude and the distribution of costs shows that these were mainly administrative in nature. Considerable variation in costs was found due to economies of scale, as the costs per tonne of CO2 were lower for participants with larger allocations. For the largest firms - accounting for over half the emissions - average transaction costs were €0.05 per tonne. However, for small firms, average transaction costs were €2.02 - over 18% of the current allowance price. This supports the concerns that transaction costs are excessive for smaller participants. The immediate policy implication is that additional attention will be needed to address different sizes of firms, number of installations per firm, and the size of the initial allocations.

China’s New Approach to CSR in Congo: Is the leverage turning to China?

China has been the world’s fastest growing economy in the past 30 years with its enterprises rapidly emerging and becoming leading players globally. In particular, the progressive integration into the international system has been spurred by China’s entry into the global trading regime of the World Trade Organization (WTO) in 2001. The 'go global' policy has been facilitating the rapidly growing engagement on the African continent of Chinese multinational companies (MNCs). As a promising tri-polar global economic entity, its growth of relations with Africa has been both unprecedented and impressive. As the Sino-Africa economic and business partnership surges forward, the matter of corporate social responsibility (CSR) is increasingly becoming an imperative ingredient for any successful business. It is noteworthy that responsible corporate citizens should take account of the impact of their investment on both economic and social arenas. However, it still remains uncertain what role Chinese MNCs have been playing in the continent’s sustainable development.
A Sino-Congo deal seems a positive way forward, accelerating the Democratic Republic of Congo’s (hereinafter referred to as Congo) regional economy, depressed due to years of war. Meanwhile, the escalating investment into Congo has raised controversies for its no-attachment policy, with increasing pressure imposed on China’s MNCs to take CSR more seriously. Particular concerns are focused on the multinationals’ inadequate environmental and human rights protection. The recent massive infrastructure investment is arguably perceived as a different interpretation of CSR, which has aroused a hot debate about whether China is heading for status as a responsible stakeholder in the international community. It is conducive to clarifying the paradoxical issue by addressing whether China’s recent approaches have the potential to facilitate CSR initiatives or hinder them in the long run.

On the Sources of Private Information in FX Markets

We investigate the source of information advantage in inter-dealer FX trading using data on trades and counterparty identities. In liquid dollar exchange rates, information is concentrated among dealers that trade most frequently and specialize their activity in a particular rate. In cross-rates, traders that engage in triangular arbitrage are best informed. Better-informed traders are also located on larger trading floors. In cross-rates, the ability to forecast flows explains all of the advantage of the triangular arbitrageurs. In liquid dollar rates, specialist traders can forecast both order flow and the component of exchange rate changes that is uncorrelated with flow.

Endogenous Two-Sided Markets with Repeated Transactions

We consider homogeneous two-sided markets, in which connected buyer-seller pairs bargain and trade repeatedly. In this infinite market game with exogenous matching probabilities and a common discount factor, we prove the existence of equilibria in stationary strategies. The equilibrium payoffs are given implicitly as a solution to a system of linear equations. Then, we endogenize the matching mechanism in a link formation stage that precedes the market game. When agents are sufficiently patient and link costs are low, we provide an algorithm to construct minimally connected networks that are pairwise stable with respect to the expected payoffs in the trading stage. The constructed networks are essentially efficient and consist of components with a constant buyer-seller ratio. The latter ratio increases (decreases) for a buyer (seller) that deletes one of her links in a pairwise stable component.

Sense and sensibility: The role of business incubator client advisors in assisting high-technology entrepreneurs to make sense of investment readiness status

For high-technology entrepreneurs, attaining an appropriate level of investment to support new ventures is challenging as substantial investment is usually required prior to revenue generation. Consequently, entrepreneurs must present their firms as investment ready in the context of an uncertain market response and an absence of any trading history. Gaining tenancy within a business incubator can be advantageous to this process given that placement enhances entrepreneurial contact with potential investors whilst professional client advisors (CAs) use their expertise to assist in the development of a credible business plan. However, for the investment proposal to be successful, it must make sense to fund managers despite their lack of technological expertise and product knowledge. Thus, this article explores how incubator CAs and entrepreneurs act in concert to mould innovative ideas into plausible business plans that make sense to venture fund investors. To illustrate this process, we draw upon empirical evidence which suggests that CAs act as sense makers between venture fund managers (VFMs) and high-technology entrepreneurs, yet their role and influence appears undervalued. These findings have implications for entrepreneurial access to much needed funding and also for the identification of investment opportunities for VFMs. © 2011 Taylor & Francis.

Abatement and Allocation in the Pilot Phase of the EU ETS

We use historical industrial emissions data to assess the level of abatement and over-allocation that took place across European countries during the pilot phase (2005–2007) of the European Union Emission Trading Scheme. Using a dynamic panel data model, we estimate the counter factual (business-as-usual) emissions scenario for EU member states. Comparing this baseline to allocated and verified emissions, we find that both over-allocation and abatement occurred, along with under-allocation and emissions inflation. Over the three trading years of the pilot phase we find over-allocation of approximately 280 million EUAs and total abatement of 247 Mt CO2. However, we calculate that emissions inflation of approximately 73 Mt CO2 also occurred, possibly due to uncertainty about future policy design features.

An Absence of Ghosts: cultural and theatrical translation in the British Reception of The Mysteries-Yiimimangaliso

Mark Dornford-May’s widely-acclaimed adaptation of the medieval English Chester “mystery” plays, The Mysteries-Yiimimangaliso, reveal the extent to which theatrical translation, if it is to be intelligible to audiences, risks trading in cultural stereotypes belonging to both source and target cultures. As a South African production of a medieval English theatrical tradition which subsequently plays to an English audience, The Mysteries-Yiimimangaliso enacts a number of disorientating forms of cultural translation. Rather than facilitating the transmission of challenging literary and dramatic traditions, The Mysteries-Yiimimangaliso reveals the extent to which translation, as a politically correct - and thus politically anaemic - act, can become an end in itself in a globalised Anglophone theatrical culture.