Optimal agency contracts: The effect of vicarious liability and judicial error

Under the doctrine of vicarious liability, a deep-pocket principal is often held responsible for a third-party harm caused by a judgment-proof agent’s negligence. We analyze the incentive contract used by the principal to control the agent’s behavior when a court can make an error in determining the agent’s negligence. We show that (1) reducing the error of declaring the agent not negligent even when he was (pro-defendant or type II error) is better than reducing the error of declaring the agent negligent even when he was not (pro-plaintiff or type I error) and (2) allowing the principal to penalize the agent even when the court declares the agent not negligent improves welfare. The latter supports the argument that causing an accident (or a reliable allegation of misconduct) should be sufficient to justify a “just cause” termination of an employee.     

Internet auction fraud: The evolving nature of online auctions criminality and the mitigating framework to address the threat

Online auctions have emerged as one of the popular segments of e-commerce. The popularity of this technology-aided business model is evidenced by the continuous growth of eBay and other e-auction markets. However, this growth of online auctions has also led to a corresponding rise in deception and online criminal activity. This paper presents the findings of an original experiment undertaken to examine the evolving criminality associated with eBay auctions. The article examines eBay’s existing fraud prevention framework and evaluate its effectiveness in mitigating the risk. The research has identified foundation of eBay’s fraud problem - the inability of eBay’s fraud prevention architecture to identify and eliminate rogue traders with obscure identity and questionable reputation. The authors have proposed a proactive and holistic e-fraud prevention typology to enhance trader’s authentication to fight online auction fraud.     

Revisiting Informal Justice: Restorative Justice and Democratic Professionalism

Restorative justice is a form of informal justice growing rapidly among criminal justice practitioners. It decenters the focus of criminal justice from the offender breaking a law of the state to the harm caused the victim and community. Resolution is said to come from offenders taking responsibility and making amends for the harm done and from communities supporting the victim and providing offenders with opportunities and skills to reintegrate as contributing members.
Restorative justice theory largely ignores the role of professionals in the criminal justice process, and yet professionals have played a dominant part in initiating many restorative justice programs. Several theoretical traditions recognize professionals as being important intermediaries between citizens and the state. The theory of democratic professionalism argues that professionals can play crucial roles in increasing and improving democratic participation in public affairs. This article examines two functioning restorative justice programs to flesh out what democratic professionalism might look like in operation—what tasks professionals perform and what citizen involvement means to the professionals. We argue that restorative justice cannot get along without professionals and that democratic professionalism may help restorative justice to avoid some of the problems associated with other approaches to informal justice by increasing true community participation but balancing it with concern for individuals' rights.     

Independence and the creative potential of gifted and exceptionally gifted boys

A 16-item questionnaire concerning independence and three divergent thinking tests were administered to three groups of preadolescent boys and their mothers as part of an ongoing longitudinal investigation of exceptional giftedness. The subjects included one group of exceptionally gifted boys with IQs in excess of 150 (n=28), a second group of exceptionally gifted boys selected for their math-science abilities (also well within the 99th percentile;n=26), and a control group of gifted boys (n=37), with a mean IQ of 133). The three groups were compared with one another in terms of (a) their own independence ratings, (b) their mothers' independence ratings, (c) correlations of boys' and mothers' independence ratings, and (d) correlations of independence ratings with IQ and scores from the divergent thinking tests. Results indicated significant differences among the three groups of mothers, and significant differences between the two exceptionally gifted groups and the control group. In addition, mothers' and subjects' independence scores were moderately correlated with IQ and divergent thinking test scores. These results are discussed and placed in the context of the longitudinal project of which they are a part.This research was supported by a grant to Dr. Albert by the Arthur D. and Catherine T. McArthur Foundation.Preliminary results from this investigation were presented at the meeting of the Hawaii Psychological Association in Honolulu, Hawaii, November 1985.Received Ph.D. from Boston University His research interests include long-term family involvement in giftedness and achievement of eminence.Received Ph.D. from the Claremont Graduate School His current interests include the psychometrics and family background of creativity and exceptionality.