First‐price auctions with budget constraints

Consider a first‐price sealed‐bid auction with interdependent valuations and private budget constraints. Focusing on the two‐bidder case, we identify new sufficient conditions for the existence of a symmetric equilibrium in pure strategies. In equilibrium, agents may adopt discontinuous bidding strategies that result in a stratification of competition along the budget dimension. Private budgets can simultaneously lead to more aggressive bidding (a high‐budget agent leverages his wealth to outbid rivals) and more subdued bidding (competition becomes less intense among bidders at distinct budget levels). The presence of budget constraints may lead to multiple symmetric equilibria in the first‐price auction.

Risks of Regional Tax Systems and Their Portfolio Decomposition: The Case of Modern Russia

The purpose of this paper is an assessment of the risk of regional tax systems at different levels of the budget system (consolidated, federal, regional and local), decomposition of this risk by sources (various taxes and tax groups) and the isolation of internal (related to own tax return volatility) and external (related to the correlation of tax returns volatility) risk components. Using the portfolio approach, we measured and decomposed the risk of tax systems of 80 constituent entities of the Russian Federation in 2006–2017. As a result, we found a weak positive relationship between the risk and return of the regional tax systems at all budget levels. By comparing the structure of return and risk of regional tax systems, we identified taxes – risk dampers and taxes – risk enhancers, and estimated the overall level of imbalance in regional tax systems at the studied budget levels. It allowed us to conclude about the effectiveness of diversification of regional tax systems, the advisability of combining different taxes in a single portfolio, or transferring them to another level of the budget system.

How Do Budget Level and Type of Incentives Influence Performance?

This research experimentally compares the influence of budget-based contracts and social incentives on individual performance. This paper compares two different types of budget-based contracts, budget-linear and budget-fixed, along with social incentives on individual performance. Assigning individuals in different budget levels, 75% or 100%, to perform complex tasks will lead to different performance outputs. The results show that individual performance will be higher when they receive a budget-linear contract. Social incentives have a strong impact on both types of budget-based contracts. The result of the study on the influence of budget levels confirms previous research that higher budget levels will led to higher performance when compared with lower budget levels. Keywords: Budget-based incentive contracts, social incentives, budget level, task complexity, individual performance.

Implementación de un presupuesto empresarial base cero bajo el enfoque difuso. //Implementation of a zero based business budget under the diffuse approach.

El presente artículo hace referencia a la implementación de una nueva técnica de análisis y estructuración en la construcción del presupuesto empresarial, denominada “Presupuesto Base Cero” (PBC), en una empresa de calzado en el cantón Gualaceo Provincia del Azuay-Ecuador. El objetivo de la investigación se basa en construir un presupuesto que permita capturar la dinámica económica de la empresa, optimizando los costos para lograr alcanzar las metas en el mediano y largo plazo. La metodología utilizada, consistió en la aplicación de herramientas de avanzada de la lógica difusa, utilizando números borrosos trapezoidales (NBTr), permitiendo capturar los verdaderos niveles presupuestarios que necesitará la empresa para hacer predicciones y poder lograr los objetivos que persigue la institución. Como resultado de esta investigación, se logra determinar los niveles óptimos de presupuesto que puede alcanzar la empresa de calzado dado una estructura estimada de ingresos, que permita a la alta gerencia direccionar variables y tomar las mejores decisiones posibles frente a la realidad actual.AbstractThis article refers to the implementation of a new technique of analysis and structuring in the construction of the business budget, called "Base Zero Budget" (PBC), in a footwear company in the Gualaceo canton, Province of Azuay-Ecuador. The objective of the research is based on building a budget that allows capturing the economic dynamics of the company, optimizing the costs to achieve the goals, which the company achieves in the medium and long term.The methodology used consisted of the application of advanced tools of fuzzy logic, using trapezoidal fuzzy numbers (NBTr), allowing to capture the true budget levels required by the company to make predictions and achieve the objectives pursued by the institution. As a result of this research, it is possible to determine the optimal budget levels that this footwear company can achieve given an estimated revenue structure, which allows top management to address variables and make the best possible decisions in the face of current reality.

Landscape-Level Simulation of Weed Treatments to Evaluate Treatment Plan Options

Models have been developed to simulate the long-term effects of weed treatments across a landscape to determine effective management strategies, but those models might not be suitable for evaluating short-term action plans of weed treatments that are specific in time and place. In this study, we developed a simulation model to build and evaluate 5-yr weed treatment plan options in terms of their cost and effectiveness in minimizing total infestation areas over the short-term planning horizon. In an iterative, interactive process, 5-yr treatment plan options are developed based on user-defined weed treatment preferences, and evaluated in terms of total projected infestation areas at the end of the planning horizon. The simulation model was applied to a study area of 24,867 ha (61,447 ac) located in the Salmon River watershed in Idaho. Eight treatment plan options were developed using two treatment priority strategies and four increasing budget levels, and compared for their effectiveness. The application results showed that regardless of budget levels, site priority strategies were more cost-effective than the species priority strategies in reducing total infestation areas over time. This simulation model can provide weed managers with a useful tool to evaluate short-term treatment options, and thus support informed decision-making for effective weed management. Although the availability and quality of input data may be a practical limitation of using the simulation model, more data would become available and improved as more invasive species monitoring programs are implemented.

Determinants and Consequences of Firm Information Technology Budgets

ABSTRACT: For most firms, the information technology (IT) budget represents a major element in the overall firm budget, and IT budget decisions often have significant operational and strategic impacts on the business processes in the firm’s value chain. In this paper we use a large unique data set to examine the extent to which IT budgets are affected by environmental, organizational, and technological circumstances. We find that our cross-sectional model explains substantial variance in IT budgets, which indicates that contingent environmental, organizational, and technological factors affect managers’ budget decisions. We then examine the extent to which these IT budget levels are related to future firm performance, measured using both broad financial accounting measures, such as operating profit margins and return on assets, and market returns. We find that IT budget levels are positively associated with subsequent firm performance and shareholder returns. We further suggest that IT’s aggregate effect on performance is a weighted average of two very different components: (1) context-driven IT budget levels, which reflect the effects of environmental, organization, and technological factors and the IT budgets resulting from them, and (2) idiosyncratic IT budget levels, which reflect the effect of any marginal firm-specific IT budget expenditures after controlling for these contextual factors. Both components are positively associated with performance, indicating that the specified contextual factors provide an incomplete explanation of firms’ value-relevant IT expenditures. The current study contributes to the accounting information systems and management accounting literatures by assessing the causes and consequences of IT budgets.

Budget-Based Contracts, Budget Levels, and Group Performance

In this paper, we experimentally investigate the effects of budget-based contracts and budget levels (performance targets) on group performance. We compare a group piece-rate contract with two different specifications of a group budget-based contract: (1) a group budget-fixed contract that provides no remuneration for performance below the budget and a fixed bonus for performance meeting or exceeding the budget, and (2) a group budget-linear contract that provides no remuneration for performance below the budget, a fixed bonus once the budget is attained, plus a piece-rate for production in excess of the budget. We also assigned each group a budget level, set at 50 percent, 75 percent, or 100 percent of the group's performance capability. The results indicate that the group budget-linear contract led to significantly higher group performance than both the group budget-fixed contract and the group piece-rate contract. Additionally, the 75 percent budget level led to significantly higher group performance than both the 50 percent budget level and the 100 percent budget level. Finally, the variability in group performance was lowest under the group budget-linear contract and the 75 percent budget level. Collectively, these results demonstrate the efficacy of both certain types of budget-based contracts and “moderately” difficult budget goals in enhancing group performance. The results also suggest that both motivation and coordination (planning) can be enhanced by budget levels of moderate difficulty and group budget-linear contracts, as the group budget-linear contract and the 75 percent budget level not only led to the highest level of performance, but also led to the lowest variability in performance.