Mutual Monitoring Research Articles

Are Worker-Managed Firms More Likely to Fail Than Conventional Enterprises? Evidence from Uruguay

Various theories suggest that worker-managed firms (WMFs) are prone to failure in competitive environments. Using a long panel of Uruguayan firms, the author presents new evidence on firm survival by comparing WMFs with conventional firms. After excluding microenterprises and controlling for differences in the effective tax burden faced by the two types of firms, the hazard of dissolution is 29% lower for WMFs than for conventional firms. This result is robust to alternative estimation strategies based on semiparametric and parametric frailty duration models that take into account unobserved firm-level heterogeneity and impose a range of distributional assumptions about the shape of the baseline hazard. The higher survival rates of worker-managed firms seem to be associated with their greater employment stability. This evidence suggests that the marginal presence of WMFs in actual market economies cannot be explained by the fact that these firms are less likely to survive than conventional firms

Mutual monitoring and corporate governance

Mutual monitoring in a well-structured authority system can mitigate the agency problem. I empirically examine whether the number two executive in a firm, if given authority, incentive, and channels for communication and influence, is able to monitor and constrain the potentially self-interested CEO. I find strong evidence that: (1) measures of the presence and extent of mutual monitoring from the No. 2 executive are positively related to future firm value (Tobin’s Q); (2) the beneficial effect is more pronounced for firms with stronger incentives for the No. 2 to monitor and with higher information asymmetry between the boards and the CEOs; and (3) mutual monitoring is a substitute for other governance mechanisms. The results suggest that mutual monitoring provides important checks and balances on CEO power.

Design of Anti-Earthquake Gas Valves Wireless Monitoring System in Urban Community

According to the existing layout design of gas valves in urban communities, we come up with a wireless monitoring system which is able to efficiently control gas valves in certain area when seismic events occur and introduce in detail the system terminal’s hardware and software design. This terminal has earth’s activity collection and valves mutual monitoring function in one, and realizes real-time collection of earth’s vibration. When it earthquakes, the wireless LAN can realize functions such as earthquakes sensing and safe disposal of valves. Through optimizing the wireless network, we can guarantee system overall safety and stable operation. This system’s low power consumption, strongly real-time, high flexibility indicate its broad application prospects.

Effect of assessment error and private information on stern-judging in indirect reciprocity

Stern-judging is one of the best-known assessment rules in indirect reciprocity. Indirect reciprocity is a fundamental mechanism for the evolution of cooperation. It relies on mutual monitoring and assessments, i.e., individuals judge, following their own assessment rules, whether other individuals are “good” or “bad” according to information on their past behaviors. Among many assessment rules, stern-judging is known to provide stable cooperation in a population, as observed when all members in the population know all about others’ behaviors (public information case) and when the members never commit an assessment error. In this paper, the effect of assessment error and private information on stern-judging is investigated. By analyzing the image matrix, which describes who is good in the eyes of whom in the population, we analytically show that private information and assessment error cause the collapse of stern-judging: all individuals assess other individuals as “good” at random with a probability of 1/2.

Turning Up the Volume: An Experimental Investigation of the Role of Mutual Monitoring in Tournaments

This study investigates experimentally how mutual monitoring affects effort when employees are compensated via rank‐order tournaments. Theory and anecdotal evidence suggest that mutual monitoring may either decrease effort by facilitating collusion or increase effort by stimulating competition. In our first experiment, we find that mutual monitoring increases effort, because participants do not attempt to collude but rather behave competitively. This result leads us to expand our theory and develop hypotheses to predict that the effect of mutual monitoring depends on whether employees have the inclination to collude or compete. Specifically, we predict that mutual monitoring decreases effort when employees are inclined to collude and increases effort when employees are inclined to compete; that is, mutual monitoring will not change the basic inclination created by the workplace setting, but will “turn up the volume” on the effect that such inclination has on effort. Consistent with our predictions, our second experiment finds that mutual monitoring leads to lower effort when participants have a collusive inclination and (eventually) higher effort when they have a competitive inclination. Overall, the results from these two experiments suggest that allowing employees to observe each other's productive effort in tournament incentive settings may have positive or negative consequences for the firm, depending on whether environmental factors predispose employees to collude or compete.

Effects of metacognition in cooperation on team behaviors

Traditional studies on measurements and training of teamwork have often focused on observational teamwork behaviors; however, measurements and training of unobservable teamwork such as mutual performance monitoring are also important for improving teamwork measurement and training. In addition, an improvement of cognitive mechanisms underlying teamwork must effectively be able to enhance team performance because sufficient situation awareness of status of team is expected to be a requirement for positive teamwork behaviors. This study focuses on metacognition in cooperation that underlies team cooperation and aims to investigate the importance of metacognition in cooperation by analyzing contents of reflection on cooperation collected in our previous study in terms of our proposed model about metacognition in cooperation. The comparisons of metacognition in cooperation elicited in a team experiment and team performance indexes suggest that an expansion of range of metacognition in cooperation by metacognitive instructions will enhance team performance and that certain types of metacognition in cooperation are important for positive teamwork.

Short-Run Prosocial Behavior in Response to Receiving Corrections and Affirmations in Three Therapeutic Communities

Therapeutic communities (TCs) have a strong record of maintaining high quality social climates in prison units. One possible reason for this is the system of mutual monitoring among TC residents, based on the assumption that peer affirmation of behavior in accord with TC norms, and peer correction of behavior contrary to TC norms, will lead to increased resident prosocial behavior. Laboratory experiments have demonstrated that such peer monitoring can lead to cooperation, but there has been no quantitative test of this hypothesis in an actual TC. In this article we test this assumption by using the affirmations that residents of three different TCs send as a measure of prosocial behavior following the reception of peer affirmations and corrections. At all three facilities residents send more affirmations following the reception of both affirmations and corrections, with this relationship being stronger and longer lasting after receiving affirmations. No other variable consistently predicts the number of affirmations that residents send to peers. These findings imply that mutual monitoring among TC residents can lead to increased levels of prosocial behavior within the facility, and that prosocial behavior in response to peer affirmations plays a key role.

On the Upsides of Aggregation

ABSTRACTAggregation, and minimizing associated information loss, is a pervasive theme in accounting. In contrast, this paper highlights some potential benefits of aggregation, using simple examples to illustrate ideas from a number of recent papers in a parsimonious manner. Aggregation rules can improve decision making because of their ability to convey appropriate information and because such rules may permit offsetting errors. Turning to control problems, aggregation has merit in the provision of both explicit and implicit incentives. Contracts based on aggregate measures can be part of a conservative process that limits opportunities for cherry-picked corrections by evaluatees, serve as a substitute for the principal's commitment, curb managerial slack by delaying information release, and improve the production versus rents tradeoff by reducing information asymmetry. In the context of implicit incentives, we examine settings wherein effort incentives are provided by the marketplace and/or by an agent's own peers. In light of career concerns and the possibility of mutual monitoring by colleagues, aggregate measures again prove beneficial.

Mutual Monitoring and Corporate Governance

Mutual Monitoring and Corporate Governance

Target Revisions in Multi-Divisional Firms: Effects of Mutual Monitoring

Target Revisions in Multi-Divisional Firms: Effects of Mutual Monitoring

Eurobond: 'Yes, We Can!' (Eurobond: 'Si può fare')

This paper explores a potential new exit strategy from the sovereign debt crisis affecting European countries since 2010. The proposal is based on the securitization of sovereign debt and the transfer of its surer tranche to a bond at the European level with jointly responsibility between country members, the Eurobond. Mixing economic concepts differently from other similar proposals, this (perfectible) exit strategy is convenient, feasible and worthy to be realized. From a financial viewpoint, it would be the greater innovation from the introduction of Euro. From a fiscal viewpoint, it could lead gradually to the political union of Eurozona avoiding the scepticism of more virtuous countries. The idea can be applied also at the national level to debts of local administrations: the mutual monitoring between partners and the threat of exclusion to future issues could inventive virtuous behaviors reducing sovereign debt endogenously.

Network architecture, cooperation and punishment in public good experiments

Following Fehr and Gaechter (Am Econ Rev 90(4):980–994, 2000), a large and growing number of experiments show that public goods can be provided at high levels when mutual monitoring and costly punishment are allowed. Nearly all experiments, however, study monitoring and punishment in a complete network where all subjects can monitor and punish each other. The architecture of social networks becomes important when subjects can only monitor and punish the other subjects to whom they are connected by the network. We study several incomplete networks and find that they give rise to their own distinctive patterns of behavior. Nevertheless, a number of simple, yet fundamental, properties in graph theory allow us to interpret the variation in the patterns of behavior that arise in the laboratory and to explain the impact of network architecture on the efficiency and dynamics of the experimental outcomes.

Prediction Analysis of Pit Deformation Based on Spatial Data Mining

Pit excavation was easy to cause the deformation of the supporting structure and surrounding soil, and brought serious harm to the surrounding buildings and urban underground pipelines. How to carry on a comprehensive analysis of inter-linked pit monitoring points, and improve the overall prediction accuracy was the urgent problem needed to be solved in scientific predictions of pit deformation. In order to establish the multi-variable gray theory GM(1,N) first-order linear dynamic model, using pit mutual influential settlement deformation monitoring data, and the correlation degree analysis, it filtered out the parent sequence WY09 point as the object to be analyzed, and the remaining points were as the systematic analysis of influencing factors, and WY09 point settlement predictions was calculated. According to the comparison analysis of the prediction results and engineering measured results, GM(1,N) model overall prediction accuracy was higher than GM(2,1) model, and prediction results were almost consistent with the measured results, so good effects was produced.

Temporary Residences: a becoming project

Among the experimental actions fostered so far by the Compagnia di San Paolo through its Housing Program, committed in handling the complex and fragmented housing discomfort issue, the Temporary Dwellings initiative represents a unique and innovative experience, as it actually offers the chance to activate a proper managerial direction around and about the real estate development processes. In particular, the Temporary Dwellings action is marked by two key aspects: a structured co-planning vision and projects selected through a requests for proposal system. The process in the whole aims on the one hand at reaching an high transparent level of decision making , while, on the other hand, at developing a continuous and mutual monitoring and matching activity between the Housing Program and the group of cross-curricular experts teamed up in the project: technicians, designers, managers, psychologists, contractors, and the other local stakeholders.

Foreign board membership and firm value in Korea

PurposeThis paper seeks to explore such questions as: “What are the impacts of foreign investors and what are the channels through which foreign investors contribute to or detracts from firm value in Korea?” It aims to discuss how foreign investors and foreign outside directors interact to enhance firm value.Design/methodology/approachUsing longitudinal data from the KOSPI200 index in Korea during 2004‐2007, the study examined the direct and interaction effect of foreign blockholders and foreign board members. To address the representativeness of foreign investors, the authors verified the mandates of foreign board members though telephone interviews.FindingsForeign block shareholders and foreign outside directors respectively provide expertise and independent monitoring over management. Foreign blockholders' management control via board membership is likely to mitigate leverage of value enhancement when foreign outside directors represent private interests of foreign blockholders. The moderating effect is also supported since foreign ownership concentration has an inverted U‐shaped relationship with value enhancement. The paper confirms that board independence reinforces the positive impact of foreign outside directors on firm value.Research limitations/implicationsThis study offers a key to understanding corporate governance in that mutual monitoring and a balance among various types of stakeholders are crucial to value enhancement.Originality/valueThe paper provides clues to the extant diverse findings concerning the impact of foreign investors on firm value. It applies an integrated perspective to the empirical analyses of the impact of foreign investors by giving consideration to the agency – foreign outside directors – to implement management control on behalf of foreign blockholders.

The Application of Mutual Control Monitoring and Communication Technology in Intelligent Building Safety Mitigation System –The Design of Computer Communication Interface and Control Platform

With the development of intelligent building, building intelligence system integration has become the focus of the field of intelligent building. The mutual control mode communication technology can provide strategies against emergency. On the other hand, in order to effectively support the real-time control system, and improve the system of operation, we connect the system with a computer platform by using RS232 serial communication port, and use VC program design platform and ActiveX technology which introduced by Microsoft to produce a operating control platform of the mutual control mode communication machine.

Mutual Monitoring and Corporate Governance

Mutual Monitoring and Corporate Governance

The Tradeoff Between Employee Ownership and CEO Compensation: Evidence from Defined Contribution Pension Plans

This paper examines the executive compensation schemes of firms whose employees invest in company stocks in the defined contribution (DC) pension plan. In sum, I find that during the period 1992 to 2007, firms with higher employee ownership in the DC plan are more likely to reduce the level and fraction of CEO pay in the form of stock options. The CEO interest alignment (Delta) and risk-taking incentives (Vega) are significantly suppressed in these firms. Moreover, these results are more evident for subsamples of firms in more unionized industries, firms whose employees are more difficult to retain, firms with weaker free-riding problems among employees, and firms that adopt broad-based employee stock ownership plans. The results are also more pronounced for a subsample of firms with higher capital intensity. These findings suggest that employee ownership in the DC plan enhances the mutual monitoring of and coordination among rank-and-file employees, thereby reducing the demand for intensive managerial monitoring induced by high-powered CEO stock option. These findings also indicate that when employees bear large amounts of undiversified risk by holding employer stocks in the DC plan, firms tend to lower managerial risk-taking incentives so as to avoid costly labor costs and litigations.

It Takes Two: The Incidence and Effectiveness of Co-CEOs

This study examines the phenomenon of co-CEOs within publicly traded firms. Although shared executive leadership is not widespread, it occurs within some very prominent firms. We find that co-CEOs generally complement each other in terms of educational background or executive responsibilities. Our results show that firms most likely to appoint co-CEOs have lower leverage, a more limited firm focus, less independent board structure, fewer advising directors, lower institutional ownership, and greater levels of merger activity. The governance structure of co-CEO firms suggests that co-CEOships can serve as an alternative governance mechanism, with co-CEO mutual monitoring substituting for board or external monitoring and co-CEO complementary skills substituting for board advising. An event study indicates that the market reacts positively to appointments of co-CEOs while a propensity score analysis shows that the presence of co-CEOs increases firm valuation.

The Three Musketeers: What do We Still Need to Know About Our Passage Through Prehistory?

Any author is lucky to have readers, but to have three readers as subtle, attentive, and generous as Geoff Brennan (GB), Ben Fraser (BF), and Kim Sterelny (KS) is a privilege indeed. I have learned much from all three of them, both from these pieces and more generally from their other writings and the discussions we have had. I am grateful to them for the many generous things they say about The Company of Strangers (hereafter TCOS), and in particular for agreeing that the ease with which we citizens of prosperous modern societies interact with strangers is a puzzle given our prehistoric origins. But all three chide me, diplomatically though firmly, for imprecision about some crucial aspects of the transition of humankind from hunting and gathering to modern society, for appealing to metaphors (such as ‘‘tunnel vision’’ and ‘‘honorary friends’’) instead of mechanisms. I think there is much truth in this criticism, and I would like to take this opportunity to say more about what we know—and, crucially, about what we still don’t know—about how this transition happened. To do this I propose not to answer the questions and criticisms of the three commentators point by point. Instead I shall set out six broad questions about the transition, each of which is posed explicitly or implicitly by one or more of these commentators and about which they are right to point out that TCOS does not have enough to say. In some cases this is because the state of our collective knowledge is inadequate, in others because TCOS does not clearly enough reflect that collective knowledge. These are the questions: (1) Was Pleistocene life transparent enough for prudent calculation based on self-regarding preferences to support cooperation via mutual monitoring, punishment of defectors, and incentives for reputation building? (2) How violent was the Pleistocene? And how much of this violence was intra-group rather than inter-group? (3) Was interaction with strangers frequent or rare? (4) What exactly would have been necessary for a psychology adapted to the Pleistocene to make sense of a much more frequent exposure to strangers in the Holocene? Was it just a matter of adjusting to a higher frequency of stranger contact or was it a qualitative shift? (5) What ensured that when agriculture arrived the social contract did not either (a) collapse, or (b) remain sufficiently robust to resist substantial increases in inequality? (6) In what sense, precisely, does the psychology we inherited from the Pleistocene continue to shape (either in the sense of enabling, or in the sense of constraining) the way we interact with strangers in modern societies?