CHEATING IN CONTESTS

Wherever competition is used to motivate a desirable activity or productive effort it may also motivate undesirable and therefore prohibited behavior—that is, cheating—that the organizer of the contest attempts to police. For example, when workers compete for promotion, bonuses, or other rewards, they may misrepresent their output (i.e., commit fraud) or increase their output by unacceptable means (e.g., violate regulations). We show how the extent of cheating is determined by the payoffs at stake in the contest, the random component of output, probability of cheating being detected, number of contestants, and the penalty associated with being found to have cheated. We find that while greater enforcement reduces cheating, it may also reduce productive effort. We also identify how two particular aspects of enforcement, the awarding of default victories and use of correlated rather than independent audits, affect cheating behavior. (JEL J33, K42)     

ECONOMIES OF SCALE IN BANKING,INDETERMINACY, AND MONETARY POLICY

This paper investigates economies of scale (ES) in financial intermediation as a source of equilibrium indeterminacy. Financial intermediation is embedded into a standard flexible‐price monetary model, and provides deposits (inside money) that substitute with currency to purchase consumption. The results indicate that equilibrium indeterminacy does not depend on a large degree of ES in intermediation nor a large intermediation sector, but on monetary policy and the determination of nominal interest rates. Monetary policies not targeting nominal rates allow for indeterminacy to arise for any positive degree of ES, while policies targeting nominal rates eliminate indeterminacy for all degrees of ES. (JEL C62, E44, E52)     

A Qualitative Study of Social Work Assessment in Cases of Alleged Child Abuse

Correspondence to Dr Dorothy Scott, School of Social Work, University of Melbourne, Parkville, Victoria, Australia 3052. Summary While there has been considerable theorizing about how socialworkers think and act, there has been relatively little researchin this area. In the study reported in this paper, in-depthinterviews and observations of practice were used to explorethe process of assessment undertaken by Australian social workersin a hospital specialist service and in a statutory child protectionservice. Using a semi-longitudinal approach which ‘shadowed’10 families (17 allegedly abused children), highly detaileddata were collected from 42 observations of practice and 123interviews with 12 hospital social workers and 15 child protectionworkers on how their assessments evolved over the life of thesecases. While there were some individual differences betweenpractitioners within each organization, of greater significancewere the marked differences between the two groups in the variablesto which they attended. Both groups tended to adopt a proceduralizedmodel of practice which narrowed the range of factorsconsideredin assessment.     

VELOCITY FUTURES MARKETS: DOES THE FED NEED A STRUCTURAL MODEL?

Previous proposals suggesting monetary policy makers target private-sector forecasts have been shown to be problematic. As policy becomes more effective, private-sector forecasts become less informative. Under perfect stabilization private-sector forecasts provide no useful guidance to monetary policy makers about economic shocks. We illustrate a way around this circularity problem by creating a policy futures market linked to the ratio of the (realization of the) policy goal for next period and the current instrument setting. The implication is that extensive information gathering is unnecessary, weakening the argument that central banks need a structural model to conduct policy. (JEL E52, E44, E42 )     

ESTIMATING TELEPHONE NONCOVERAGE BIAS WITH A TELEPHONE SURVEY

Nontelephone households are implicitly treated as a static populationin discussions of sampling frame noncoverage. Yet telephoneservice is known to be episodic for many households, who maygain or lose service as their financial situation changes orwhen they move. Thus the population of telephone householdsat any given time includes households that were recently a partof the nontelephone population. These households may be usedto characterize the nature of some noncoverage errors and evento estimate their magnitude. Using a panel constructed withthe 1992-93 Current Population Survey, "transient" telephonehouseholds-those who gained or lost service over the year coveredby the panel-are shown to comprise over half of the panel householdsreporting no telephone service in either the 1992 or 1993 surveys.These households are compared with the total nonphone populationand found to be similar on a variety of key demographic characteristics.Several statewide Virginia telephone surveys are used to comparehouseholds reporting "intermittent" phone service with nontelephonehouseholds surveyed through in-person interviews. Householdsreporting intermittent telephone service were very similar tonontelephone households in terms of health insurance coverageand other variables known to be related to telephone status.