Article

Insiders calls the tune

Treating the value of share options as a cost makes a dramatic difference to the reported profits of many technology companies. And it points to a broader issue. In the knowledge economy, the distinction between employee remuneration and shareholder return is fundamentally changed
Continue reading
Article

Waldfogel’s unwanted gift

Can conventional economic theory be extended to understanding Christmas gifts? Maybe it can, but this would require a more subtle understanding of human behavour than the idea of rational economic man. This article shows that we do not simply value gifts in terms of the cost of the purchase.
Continue reading
Article

The recipe for a mutual success

Mutuality seems to be dying as Equitable and Bradford and Bingley relinquish it and the water regulator rejects Kelda's proposition. Perhaps not surprisingly - mutuals suffer from the problems of too little capital - or too much. Is there a possibility of a sustainable constitution for a mutual business?
Continue reading
Article

Stretching the figures

“Do the math” has become the mantra of a generation of consultants and investment bankers. The new economy, they claim, requires new principles of valuation. But the rules of logic hold even in cyberspace, and so do the principles of economics. Profits are hard to earn in competitive businesses, and markets that are not competitive are usually regulated.
Continue reading