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This article models debt market equilibrium given an expanded notion of rational behavior. The model extends Diamond's model of reputation acquisition, by assuming that some prospective borrower‐investors are opportunistic utility maximizers, while others are unwilling to mislead borrowers as to their intended use of borrowed funds. We find that the presence of honest borrowers is necessary to the function of debt markets, and that, as in real‐world markets, opportunistic and honest agents can coexist. We further find that total economic activity is positively correlated to the proportion of trustworthy agents. A major research concern in financial economics is the reconciliation of observed behavior with the predictions of the perfect‐markets, utility‐maximization models, which have traditionally supplied the dominant paradigm in finance. The main focus of recent research has been on the predictions of Agency Theory, or simply Agency (Jensen and Meckling, 1976). Agency has its origins in the property rights literature of economic theory (Alchian, 1969) and, in essence, addresses the following question: How do rational agents act in imperfect markets? A whole range of market imperfections have been analyzed ranging from the simplest type of moral hazard and adverse selection (Thakor, 1989) to the debt capacity of an industry (Maksimovic and Zechner, 1991). Indeed, few if any areas of business theory have escaped Agency's scrutiny; it has, in effect, recast the theory of the firm. In this light, the firm becomes a structure whose efficiency depends upon its ability to mitigate the costs associated with Agency. Firms are “legal fictions which serve as a nexus for a set of contracting relations among individuals” (Jensen and Meckling, 1976, p.310). One of the major gaps in the one‐period models of agency behavior has been the inability of these models to explain management's “honest” behavior (Thaler, 1992). That is, managers do not always engage in such “rational” acts as risk‐shifting, or paying excessive dividends, in order to enrich shareholders (and themselves) at the expense of bondholders. A significant move toward reconciling Agency's predictions with observed behavior has resulted from the reputation‐acquisition work of Diamond (1989), building on the work of Kreps and Wilson (1982) and Milgrom and Roberts (1982). In these models, agents acquire reputations by demonstrating some consistent mode of behavior through multiple iterations of a contractual situation. Through these iterations, principals modify their beliefs concerning the future behavior of the agent by observing certain outcomes. In Diamond's model, rational agents will not continually choose either a risky project or safe project. Their choice is a function of the interest rate and the stage of the game. Specifically, these agents choose the risky project initially; then, as attrition among risk‐takers causes interest rates to drop, they shift to the safe project for some iterations. As the end of the game approaches, however, these agents once again revert to investing in the risky project. In comparison with the attention that has been devoted to identifying and analyzing market imperfections, the former part of the Agency question — namely the “rational agents” part — has attracted much less attention in the finance literature. In Agency models, rationality has been defined strictly in terms of the individual pursuit of pecuniary wealth. This expected‐utility model has been tested experimentally and has been found to be systematically violated, in at least two fundamental ways: 1) Individuals do not behave as if they are attempting to maximize wealth (Plott, 1986), and 2) Individual behavior is affected by notions of fairness and cooperation (Kahneman, et al, 1986). Attempts to construct a theory of capital market behavior which can accommodate this observed behavior are virtually nonexistent. This lack is probably due to the presumption that opportunistic agents will drive ethical agents out of the market. However, as we demonstrate in the model developed in this paper, this is not necessarily the case. By focusing attention specifically on Agency's rationality premise, the model developed here differs from antecedent Agency models. This article investigates the implication, for financial‐market equilibra, of an alternative rationality premise. We assume that some agents will display the virtues of honesty and trustworthiness in their dealings with Other agents. Modifying Diamond's (1989) model of reputation acquisition in debt markets, the impact of these ‘virtuous’ agents on financial‐market equilibria is investigated. The model indicates that the existence of trustworthy agents in financial markets is not merely desirable from an economic perspective, but actually is essential if debt markets are not to fail. Specifically, if lenders do not belief that some non‐trivial cohort of trustworthy agents exists, then lenders cease to lend and debt markets cease to function. Also, the greater the proportion of honest agents, the greater is the overall level of economic activity; indeed, the existence of honest agents will tend to induce at least some of the opportunistic agents to act virtuously. We find that, as Bowie observes in a more general context, “[i]t only pays to lie or cheat when you can free ride off the honesty of others” (1991, pp.11–12). In addition, the belief in a non‐trivial cohort of trustworthy agents can lead to the elimination of some agency problems.

Discusses the problems caused by pigeons in buildings and some common control techniques, and outlines a remedial programme. Briefly examines the natural history of the feral pigeon. Details the common control techniques of food reduction, poisons and narcotic baits, trapping, fertility control and removal of nest sites, shooting, predators, bird scarers, bird nets,sprung wires, spikes and repellent gels. Advocates the implementation of a specialized site investigation and suggests that control is unlikely to be achieved by the application of a single product or technique.

Management thinking on the relationship between a business enterprise and its external environment has evolved in a number of ways over the last hundred years. At each stage, the concept of the company has been determined by the socio‐economic circumstances in which managers find themselves.

This paper examines the nature and function of cost accounting at the Newcastle Infirmary, a large voluntary provincial hospital, established in 1751. In particular, the paper adds to the literature on accounting within early voluntary hospitals by identifying the relative contributions of the costing system to planning and controlling the operations, assisting decision making and holding managers accountable for their performance.

The paper relies primarily on original documents preserved in the archives of the Newcastle Infirmary.

Although evidence was found of quite sophisticated costing systems, the findings suggest that the majority of the information was produced ex post by the hospital management to demonstrate good stewardship and to engender financial support.

More cases are needed of other hospitals to ascertain how typical the Newcastle Infirmary was of the voluntary hospital sector in the nineteenth century.

Although there are other studies of accounting within British voluntary hospitals, and studies of the use of accounting to drive decision making in profit-making organisations during the nineteenth century, none have investigated the use of accounting as a decision-making tool in a voluntary hospital.

This paper investigates the extent to which the agency problems of moral hazard and adverse selection are ameliorated by agents' desire to build and maintain reputations in a multi‐period environment. We find that reputation effects will tend to ameliorate moral‐hazard‐type agency problems. In the case of adverse selection, however, we show that reputation building may actually compound the agency problem.

Given that it is costly, the widespread use of foreign exchange hedging is puzzling for several reasons. In an efficient market exchange rate fluctuations should even out over time. Also, exchange rate risk is generally regarded as unsystematic, and even if it is systematic investors can themselves hedge the risk. This paper answers the question of why firms hedge foreign exchange risk by invoking three agency problems. Given the existence of any of these agency problems, foreign exchange hedging does not merely impact firm risk. By smoothing cash‐flow streams, it also impacts directly firm value.

In the last four years, since Volume I of this Bibliography first appeared, there has been an explosion of literature in all the main functional areas of business. This wealth of material poses problems for the researcher in management studies — and, of course, for the librarian: uncovering what has been written in any one area is not an easy task. This volume aims to help the librarian and the researcher overcome some of the immediate problems of identification of material. It is an annotated bibliography of management, drawing on the wide variety of literature produced by MCB University Press. Over the last four years, MCB University Press has produced an extensive range of books and serial publications covering most of the established and many of the developing areas of management. This volume, in conjunction with Volume I, provides a guide to all the material published so far.

The emergence in the post‐war period of industrial relations as a rapidly growing field of study was a consequence of the subject becoming increasingly defined as a “problem”. During the 1950s and 60s the increasing level of strike activity, especially unofficial and unconstitutional strikes, attracted widespread attention. Low labour productivity and wage inflation were also widely seen as important industrial relations problems. These problems attracted the attention of academics from a wide variety of disciplines who developed the study of industrial relations in a way which largely reflected this preoccupation with problems.

An article in the last issue of this journal examined the literature on seniority promotion systems, arguing that most personnel management writers had ignored promotion as a topic area, tending to assume implicitly that most appointments are made from the external labour market. And yet many employers preferred internal promotion to external recruitment. It was also possible to identify a number of pressures on management to adopt both an internal labour market and a seniority‐based promotion system. These pressures were thought to be particularly pertinent in the case of white‐collar employees.