Measurement is a special type of evaluation more exact than opinion or estimation. Sawyer, Sankey... more Measurement is a special type of evaluation more exact than opinion or estimation. Sawyer, Sankey and Lombardo (2013) characterized a measure as satisfying five invariance and continuity conditions. Those conditions are satisfied as the result of a process of convergence towards that measure. Measurement in the physical sciences, for example of temperature, mineral hardness and mass, have emerged as the limit of this process of convergence. But, in the social sciences, possible measures are typically mixtures of opinion and estimation, not satisfying the conditions of a measure. In this paper, we consider the question is it possible to over-measure and, if so, what are the consequences? We define over-measurement to entail three conditions (1) That all sequences of possible measures do not converge in probability to a measure satisfying invariance and continuity conditions. (2) That the process of convergence is incomplete. (3) That the use of a single measure is inadmissible. Over-measurement represents anchoring to evaluations which are not measures. Instead, a portfolio of possible measures should be used with weights determined by the observer. The implications of over-measurement are considered, with an application to the measurement of GDP.
ABSTRACT In this paper we consider meta-economic principles, those principles which underscore th... more ABSTRACT In this paper we consider meta-economic principles, those principles which underscore the theoretical thinking of economics. Meta-economic principles are different from laws; they relate to the principles of theory construction, to the assumptions which are implicit in theory, to the constraints imposed on theories and to the analysis and scope of theories. We identify seven meta-economic principles; self-interest, the structure of incentives, minimisation of transactions costs, rationality and time consistency, individuals as economic agents, the pricing of everything and completion of markets. These are the principles which have spanned generations of economic thinking. To illustrate the role of meta-principles in economic theory, we consider a number of articles from the Journal of Political Economy. The testability of meta-economic principles is examined, both in terms of the normative principles adopted in economic theory, and in observed economic behaviour.
When universities became corporate universities, the constraints that defined universities change... more When universities became corporate universities, the constraints that defined universities changed. The values of the old university, of scholarship, truth and freedom, were replaced by the values of the market. Education became a product, the university a firm, and the university system an industry. This paper considers the decline in academe as universities converge towards for-profit corporate universities. The paper explores why universities have become corporations, how they have become corporations, and how academics survive within those corporations. In the corporate university, the academic becomes accountable to management and to students. Collegiality is sacrificed for managerialism, and freedom for accountability. The academic role is inverted. The academic becomes the academic of the production line, producing standardised teaching and research. The paper suggests that the corporate university risks sacrificing too much scholarship and too much freedom for the principles of the market, thereby diluting the integrity of the university. Key Ideas • In the corporate university, the values of the market have replaced the values of scholarship. • Academic integrity has declined as academics trade-off revenue for principles. Discussion Question 1 Can the corporate university afford to destroy academic freedom? Discussion Question 2 Can academic integrity survive? * The authors acknowledge the generous comments of Emeritus Professor Richard Davis and an anonymous referee. The first author acknowledges the support of the
The reputation of an individual is the aggregate opinion of them. Reputation is usually explained... more The reputation of an individual is the aggregate opinion of them. Reputation is usually explained by attributes of the one reputed, not the motivation of those doing the reputing. In this paper, we develop a model of reputation where the opinions are assets that leverage the reputation of others. Reputation is then determined in an imaginary market of opinion. <br><br>An opinion of an individual is assumed to be a portfolio of options on their reputation and compound options on the opinions of others. The reputation options are imaginary assets leveraging increases and decreases in expected reputation. The compound options leverage the opinions of others. Reputation options are like real options except they are options on people rather than projects. <br><br>Representing opinions as assets allows results from asset pricing theory to be invoked. We use the capital asset pricing model to determine the equilibrium leverage of an opinion. We employ a model of pricing sentiment to show that opinions and reputation exhibit overreaction and under reaction as in other assets. We adopt a model of pricing comovement to show how networks of opinion form to determine reputation. We show that arbitrary expectations of options payoffs may lead to reputation bubbles similar to asset price bubbles.<br><br>The paper provides insights as to how individuals manage reputation. Three strategies are examined. Individuals anchor opinions to attributes to increase reputation options expectations, use opinion makers to generate markets of compound options, and network to refine expectations. <br>
I wish to thank my supervisor, Dr A.R. Pagan, for his continuing assistance and encouragement dur... more I wish to thank my supervisor, Dr A.R. Pagan, for his continuing assistance and encouragement during the course of my thesis, particularly in reviewing its final compilation. Thanks are also extended to Professor R.D. Terrell for his strong support throughout. A particular acknowledgement is due to Ray Trewin who gave encourage ment to many of the ideas contained herein. The superb typing of Ms H. Patrikka contributed greatly to this document and is very much appreciated. Finally, my greatest debt is to my parents and Kessada. This thesis is dedicated to them.
Journal of the royal statistical society series b-methodological, Sep 1, 1983
An information criterion is developed for the test of a composite null hypothesis against a compo... more An information criterion is developed for the test of a composite null hypothesis against a composite separate alternative. The intuitive and interpretative appeal of the criterion is emphasized and comparisons with the Cox test invoked.
This article examines the plight of the whistleblower using elements of organizational legitimacy... more This article examines the plight of the whistleblower using elements of organizational legitimacy theory. In recognizing the negative correlation between the actions of the organization and the whistleblower it becomes clear that the continuing legitimacy of the organization necessitates the illegitimacy of the whistleblower. This helps explain the continual blacklisting of the whistleblower and their vilification resulting in the destruction of both their professional career and their reputation. Only protective legislation will provide any guarantees for the whistleblower.
This essay considers the question how should regulators be regulated. To regulate is to observe, ... more This essay considers the question how should regulators be regulated. To regulate is to observe, arbitrate and equilibrate in the public interest when that interest is not well-defined. The market for regulation is incomplete; while there is a limitless demand for regulation the supply of regulation is constrained. The response to market incompleteness has been threefold; deregulation, self-regulation and whistleblowing. Whistleblowing, in particular, has conferred many insights about regulation. Whistleblowing has shown the power of the independent regulator.Regulating conflict of interest is the unifying principle of the essay. A portfolio theory of regulation is developed where a regulator manages a portfolio of the public interest; and constrains the conflict between private interests and the public interest. The theory of regulation which emerges suggests a system of regulation with four principles: (1) Regulation of conflict of interest on a case-by-case basis; (2) Regulation by incentivizing all observers; (3) Regulation using sampling and red flags; (4) Regulatory courts.
This paper constructs a new theory of social networks based on reputation. The model assumes that... more This paper constructs a new theory of social networks based on reputation. The model assumes that reputation is an asset and that individuals connect by buying options on the reputation of others. In networking, individuals construct portfolios of call options to leverage the reputations of others and put options to hedge the connections with others. A network then consists of portfolios of reputation options. The option model confers advantages not present in existing models. First, the payoff to connecting is the payoff on a portfolio of reputation options. Second, the network forms as individuals take option positions; the network evolves as individuals adjust those positions. Third, networking strategies become option strategies. The model allows for insights into network structure, the price of connecting and the value of connecting.
ABSTRACT We propose a theory of value relevance based on a theory of information, with foundation... more ABSTRACT We propose a theory of value relevance based on a theory of information, with foundations in the efficient markets hypothesis. Like the EMH, we consider a theory of heterogeneous information, and like the EMH, testing for value relevance becomes a joint test of market efficiency, the process of price determination and value relevance. In assuming heterogeneity of information, we permit a classification of value relevance studies into weak-form, semi-strong and strong-form value relevance, similar to the classification used by Fama (1970) in defining the EMH. As a consequence, we introduce an Efficient Accounting Hypothesis, and classify existing value relevance studies according to this hypothesis. The theory which we propose implies a recursive procedure for estimation, and we discuss the econometric implications.
Measurement is a special type of evaluation that is more exact than either opinion or estimation.... more Measurement is a special type of evaluation that is more exact than either opinion or estimation. In the social sciences, in particular, most evaluations are not measures, but rather mixtures of opinion and estimation. Over-measurement represents anchoring to evaluations which are not measures. For an over-measured characteristic, single measures are used when instead a portfolio of possible measures should be used. There are three implications. First, measurements of characteristics which depend on the overmeasured characteristic are biased. Secondly, decisions which depend on the overmeasured characteristic are biased. Thirdly, over-measurement biases the measurement of uncertainty.
Measurement is a special type of evaluation more exact than opinion or estimation. Sawyer, Sankey... more Measurement is a special type of evaluation more exact than opinion or estimation. Sawyer, Sankey and Lombardo (2013) characterized a measure as satisfying five invariance and continuity conditions. Those conditions are satisfied as the result of a process of convergence towards that measure. Measurement in the physical sciences, for example of temperature, mineral hardness and mass, have emerged as the limit of this process of convergence. But, in the social sciences, possible measures are typically mixtures of opinion and estimation, not satisfying the conditions of a measure. In this paper, we consider the question is it possible to over-measure and, if so, what are the consequences? We define over-measurement to entail three conditions (1) That all sequences of possible measures do not converge in probability to a measure satisfying invariance and continuity conditions. (2) That the process of convergence is incomplete. (3) That the use of a single measure is inadmissible. Over-measurement represents anchoring to evaluations which are not measures. Instead, a portfolio of possible measures should be used with weights determined by the observer. The implications of over-measurement are considered, with an application to the measurement of GDP.
ABSTRACT In this paper we consider meta-economic principles, those principles which underscore th... more ABSTRACT In this paper we consider meta-economic principles, those principles which underscore the theoretical thinking of economics. Meta-economic principles are different from laws; they relate to the principles of theory construction, to the assumptions which are implicit in theory, to the constraints imposed on theories and to the analysis and scope of theories. We identify seven meta-economic principles; self-interest, the structure of incentives, minimisation of transactions costs, rationality and time consistency, individuals as economic agents, the pricing of everything and completion of markets. These are the principles which have spanned generations of economic thinking. To illustrate the role of meta-principles in economic theory, we consider a number of articles from the Journal of Political Economy. The testability of meta-economic principles is examined, both in terms of the normative principles adopted in economic theory, and in observed economic behaviour.
When universities became corporate universities, the constraints that defined universities change... more When universities became corporate universities, the constraints that defined universities changed. The values of the old university, of scholarship, truth and freedom, were replaced by the values of the market. Education became a product, the university a firm, and the university system an industry. This paper considers the decline in academe as universities converge towards for-profit corporate universities. The paper explores why universities have become corporations, how they have become corporations, and how academics survive within those corporations. In the corporate university, the academic becomes accountable to management and to students. Collegiality is sacrificed for managerialism, and freedom for accountability. The academic role is inverted. The academic becomes the academic of the production line, producing standardised teaching and research. The paper suggests that the corporate university risks sacrificing too much scholarship and too much freedom for the principles of the market, thereby diluting the integrity of the university. Key Ideas • In the corporate university, the values of the market have replaced the values of scholarship. • Academic integrity has declined as academics trade-off revenue for principles. Discussion Question 1 Can the corporate university afford to destroy academic freedom? Discussion Question 2 Can academic integrity survive? * The authors acknowledge the generous comments of Emeritus Professor Richard Davis and an anonymous referee. The first author acknowledges the support of the
The reputation of an individual is the aggregate opinion of them. Reputation is usually explained... more The reputation of an individual is the aggregate opinion of them. Reputation is usually explained by attributes of the one reputed, not the motivation of those doing the reputing. In this paper, we develop a model of reputation where the opinions are assets that leverage the reputation of others. Reputation is then determined in an imaginary market of opinion. <br><br>An opinion of an individual is assumed to be a portfolio of options on their reputation and compound options on the opinions of others. The reputation options are imaginary assets leveraging increases and decreases in expected reputation. The compound options leverage the opinions of others. Reputation options are like real options except they are options on people rather than projects. <br><br>Representing opinions as assets allows results from asset pricing theory to be invoked. We use the capital asset pricing model to determine the equilibrium leverage of an opinion. We employ a model of pricing sentiment to show that opinions and reputation exhibit overreaction and under reaction as in other assets. We adopt a model of pricing comovement to show how networks of opinion form to determine reputation. We show that arbitrary expectations of options payoffs may lead to reputation bubbles similar to asset price bubbles.<br><br>The paper provides insights as to how individuals manage reputation. Three strategies are examined. Individuals anchor opinions to attributes to increase reputation options expectations, use opinion makers to generate markets of compound options, and network to refine expectations. <br>
I wish to thank my supervisor, Dr A.R. Pagan, for his continuing assistance and encouragement dur... more I wish to thank my supervisor, Dr A.R. Pagan, for his continuing assistance and encouragement during the course of my thesis, particularly in reviewing its final compilation. Thanks are also extended to Professor R.D. Terrell for his strong support throughout. A particular acknowledgement is due to Ray Trewin who gave encourage ment to many of the ideas contained herein. The superb typing of Ms H. Patrikka contributed greatly to this document and is very much appreciated. Finally, my greatest debt is to my parents and Kessada. This thesis is dedicated to them.
Journal of the royal statistical society series b-methodological, Sep 1, 1983
An information criterion is developed for the test of a composite null hypothesis against a compo... more An information criterion is developed for the test of a composite null hypothesis against a composite separate alternative. The intuitive and interpretative appeal of the criterion is emphasized and comparisons with the Cox test invoked.
This article examines the plight of the whistleblower using elements of organizational legitimacy... more This article examines the plight of the whistleblower using elements of organizational legitimacy theory. In recognizing the negative correlation between the actions of the organization and the whistleblower it becomes clear that the continuing legitimacy of the organization necessitates the illegitimacy of the whistleblower. This helps explain the continual blacklisting of the whistleblower and their vilification resulting in the destruction of both their professional career and their reputation. Only protective legislation will provide any guarantees for the whistleblower.
This essay considers the question how should regulators be regulated. To regulate is to observe, ... more This essay considers the question how should regulators be regulated. To regulate is to observe, arbitrate and equilibrate in the public interest when that interest is not well-defined. The market for regulation is incomplete; while there is a limitless demand for regulation the supply of regulation is constrained. The response to market incompleteness has been threefold; deregulation, self-regulation and whistleblowing. Whistleblowing, in particular, has conferred many insights about regulation. Whistleblowing has shown the power of the independent regulator.Regulating conflict of interest is the unifying principle of the essay. A portfolio theory of regulation is developed where a regulator manages a portfolio of the public interest; and constrains the conflict between private interests and the public interest. The theory of regulation which emerges suggests a system of regulation with four principles: (1) Regulation of conflict of interest on a case-by-case basis; (2) Regulation by incentivizing all observers; (3) Regulation using sampling and red flags; (4) Regulatory courts.
This paper constructs a new theory of social networks based on reputation. The model assumes that... more This paper constructs a new theory of social networks based on reputation. The model assumes that reputation is an asset and that individuals connect by buying options on the reputation of others. In networking, individuals construct portfolios of call options to leverage the reputations of others and put options to hedge the connections with others. A network then consists of portfolios of reputation options. The option model confers advantages not present in existing models. First, the payoff to connecting is the payoff on a portfolio of reputation options. Second, the network forms as individuals take option positions; the network evolves as individuals adjust those positions. Third, networking strategies become option strategies. The model allows for insights into network structure, the price of connecting and the value of connecting.
ABSTRACT We propose a theory of value relevance based on a theory of information, with foundation... more ABSTRACT We propose a theory of value relevance based on a theory of information, with foundations in the efficient markets hypothesis. Like the EMH, we consider a theory of heterogeneous information, and like the EMH, testing for value relevance becomes a joint test of market efficiency, the process of price determination and value relevance. In assuming heterogeneity of information, we permit a classification of value relevance studies into weak-form, semi-strong and strong-form value relevance, similar to the classification used by Fama (1970) in defining the EMH. As a consequence, we introduce an Efficient Accounting Hypothesis, and classify existing value relevance studies according to this hypothesis. The theory which we propose implies a recursive procedure for estimation, and we discuss the econometric implications.
Measurement is a special type of evaluation that is more exact than either opinion or estimation.... more Measurement is a special type of evaluation that is more exact than either opinion or estimation. In the social sciences, in particular, most evaluations are not measures, but rather mixtures of opinion and estimation. Over-measurement represents anchoring to evaluations which are not measures. For an over-measured characteristic, single measures are used when instead a portfolio of possible measures should be used. There are three implications. First, measurements of characteristics which depend on the overmeasured characteristic are biased. Secondly, decisions which depend on the overmeasured characteristic are biased. Thirdly, over-measurement biases the measurement of uncertainty.
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Papers by Kim Sawyer