How Financial Managers Deal with Ethical Stress

This article explores the way public-sector financial managers cope with ethical challenges created by undue political pressure and demands for special treatment. A nationwide survey of financial managers revealed that fiscal stress exacerbates ethical pressure for most financial managers, including chief financial officers (CFOs) and those who report to CFOs. Financial managers do not work in an ethical vacuum; they respond to supervisors who encourage ethical action and to coworkers who demonstrate high standards of personal integrity. Supervisors of CFOs who emphasize political responsiveness in employee evaluations can threaten the ethical behavior of CFOs, while timely feedback can mitigate ethical pressure. In turn, CFOs as supervisors can temper the harsh work environment in fiscally stressed times by encouraging ethical action and by giving adequate feedback to those who report to them.     

Regulating the Trade in Recreational Drugs

This paper examines the market for illegal recreational drugs. Under the present regime of illegality, the law acts as a barrier to entry of other firms. It also restricts the information available to consumers. Both of these effects increase the market power of traders. Other negative consequences of illegality include the use of violence to enforce contracts, poor quality control and the use of illegal activities to finance the purchase of drugs.However, legalizing the trade is likely to lead to greater drug use in the long run. This follows from the addictive nature of recreational drugs. Initial use of the drugs will drastically reduce consumers' price elasticity at any given level of consumption. Firms can increase the extent of the market by using introduction strategies, reducing consumers' price elasticities. Since newly introduced consumers have no brand loyalty, introduction strategies are public goods for firms. Free rider problems will produce oligopoly and collusion. Legalization will lead oligopolistic firms to expand the market.To avoid these problems it is suggested that the recreational drugs industry should be nationalised, not legalised.     

Lobbying and Concessions: Comparing Nash to Stackelberg Games

We analyze how the standardresults in lobbying theory change when one side has asecond instrument at its disposal. We look at theeffect concessions by one side have on the outcome ina Nash and a Stackelberg game.