Discussion of information rents and preferences among information systems in a model of resource allocation

Article Abstract:

Antle and Fellingham (1995) investigated the impact of introducing a public information system in the context of private information and resource allocation. The study focused on the consequences of an organization's choice of information system for the amount of its total surplus and how such surplus is divided between the owner and the manager. It employed a model in which the manager had informational advantage over the owner. Their findings suggest that altering the organization's cost system would have considerable distributional consequences and that these, in turn, would result in employee resistance. The rate of adoption of new systems would therefore decline. The contributions of the study are discussed.

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Information rents and preferences among information systems in a model of resource allocation

Article Abstract:

A study is conducted to explore issues that stem the manager's ability to direct organizational information to avoid its distributive effects. Specifically, it investigates the impact of the introduction of a public information system by using a model in which private information and self-interested behavior result in resource allocation that is socially inefficient. The problem considered involves a manager of resources who has informational advantage over the owner of the resources. The study focuses on the reduction of this informational advantage by introducing a public information system. Results indicate that productive efficiency is achieved no matter who selects the public information system.

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Resource rationing and organizational slack in a two-period model

Article Abstract:

Long-term contract gains are possible without consumption-smoothing motives by increasing the ability of owners to encourage honest reporting of the private information of managers. Increasing the ability of owners to encourage honest reporting can be accomplished by arranging the slack typical of myopic contracts with an internal hurdle rate that provides additional incentive to report positive rates of return in the second period. The important elements that permit this rearrangement are the owner's ability to commit and the manager's knowledge of rate of return in the second period.

Methods, Finance, Accounting and auditing, Accounting, Management, Corporations, Corporate finance

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