HOULD MONETARY POLICY be determined by a legislated rule or by a monetary authority’s discretion? Henry Simons (1936) first raised this issue as a choice between rules and authorities, terms little different than those used in recent discussions. He stresses the value of a rule, such as a law, instead of reliance on an authority’s discretion because “definite, stable, legislative rules of the g...

Single-user applications are designed with a ‘discretionary use’ model. In contrast, for large systems, upper management support is considered crucial to adoption. Which applies to groupware? The relatively low cost of groupware reduces high-level visibility, but some argue that social dynamics will force mandated use—the large system approach. Interview studies of recently adopted on-line meet...

We investigate whether accounting discretion is (i) abused by opportunistic managers who exploit lax governance structures, or (ii) used by managers in a manner consistent with efficient contracting and shareholder value-maximization. Prior research documents an association between accounting discretion and poor governance quality and concludes that such evidence is consistent with abuse of the...

This paper studies the optimal level of discretion in policymaking. We consider a fiscal policy model where the government has time-inconsistent preferences with a present-bias towards public spending. The government chooses a fiscal rule to trade off its desire to commit to not overspend against its desire to have flexibility to react to privately observed shocks to the value of spending. We a...

Most of the economics literature on compensation and organizations builds from the theory of agency.’ For the most part, the literature analyzes situations in which agents’ performance can be controlled by tying compensation to objective performance measures such as output or sales. It ignores the fact that most compensation arrangements involve superiors’ subjectire. and hence non-contractible...

The optimal weights on indicators in models with partial information about the state of the economy and forward-looking variables are derived and interpreted, both for equilibria under discretion and under commitment. An example of optimal monetary policy with a partially observable potential output and a forward-looking indicator is examined. The optimal response to the optimal estimate of pot...

OBJECTIVE To evaluate the cross-cultural validity of the Demand-Control Questionnaire, comparing the original Swedish questionnaire with the Brazilian version. METHODS We compared data from 362 Swedish and 399 Brazilian health workers. Confirmatory and exploratory factor analyses were performed to test structural validity, using the robust weighted least squares mean and variance-adjusted (WLSM...

I model the principal-agent problem in a banking context, where the agent must not only be induced to exert costly unveri…able e¤ort but also to exercise …duciary discretion in lending money on behalf of an employing bank. I show that the spread in wage outcomes necessary to induce …duciary discretion may be prohibitively expensive; instead, the bank may opt for a second-best solution where exc...

In a Ubiquitous Computing environment, sensors are actively collecting data, much of which can be very sensitive. Data will often be streaming at high rates (video and audio) and it must be dealt with in real-time. Protecting the privacy of users is of central importance. Effective solutions for controlling access to data in ubicomp settings remain to be developed. Dealing with these issues wil...

A growing stream of accounting research suggests that managers use the data reported in a company’s financial reports to make real investment decisions. We extend this idea to the public sector, investigating whether the employment decisions made by governmental entities are influenced by the reporting rules for public pensions and the discretion pension managers use in implementing these rules...