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common explanation for why firms incur sunk costs is that technology considerations make them inescapable. This paper shows that sometimes firms may prefer to make early (less informed) investment decisions even when technology allows such decisions to be delayed. Sunk costs commit and clarify a...
Persistent link: https://www.econbiz.de/10005586891
Job rotation refers to the practice of routinely transferring employees between jobs. The explanations provided for job rotation are as varied as its uses.Some posit that complementarities and learning across tasks allow increased productive efficiency, while others speculate that employees'...
Persistent link: https://www.econbiz.de/10005586949
Though sunk costs impact future income calculations (via depreciation for example), accountants are reminded that their sunk nature makes them irrelevant for future decisions. An explanation for why firms routinely incur such costs is that technology considerations make them inescapable. This...
Persistent link: https://www.econbiz.de/10005587085
This paper considers the desirability of aggregate performance measures in light of the fact that many individuals' performance incentives are driven by a desire to shape external perceptions (and thus pay). In contrast to the case of explicit contracts, we find that when individuals' actions...
Persistent link: https://www.econbiz.de/10008852983
Persistent link: https://www.econbiz.de/10010714250
It is often noted that accounting information, while faithfully estimating current profitability, fails to reflect forward-looking information about new ventures. Stock prices, however, reflect the prevailing sentiment about both current and future activities. As a result, though accounting is...
Persistent link: https://www.econbiz.de/10013029607
When a firm's input supplier can acquire private information to gain an edge in negotiations, we show that the firm can blunt the supplier's informational advantage by permitting cost inefficiencies in internal production. Specifically, we establish that a modest increase in the cost of the...
Persistent link: https://www.econbiz.de/10012907394
Recognizing the role and value of diverse stakeholders, firms pursing a "beyond profit" agenda are becoming increasingly common. This paper studies such hybrid entities - firms that value the profits they create as well as the surpluses generated for consumers - and details their implications...
Persistent link: https://www.econbiz.de/10012958600
The organization of charitable distribution channels to ensure donor contributions reach beneficiaries in an efficient manner and the use of accounting metrics of such efficiency (whether provided directly or by charity rating groups) are oft-discussed issues in the nonprofit sector. The two...
Persistent link: https://www.econbiz.de/10013015765
Corporate insiders face substantial restrictions on stock sales, but many have viewed receiving tax deductions from charitable donations of stock holdings as an attractive alternative. In fact, empirical evidence consistently indicates that executives even make use of their private information...
Persistent link: https://www.econbiz.de/10013308985