New Economics Papers
on Law and Economics
Issue of 2009‒10‒24
two papers chosen by
Jeong-Joon Lee, Towson University

  1. Moderated Online Communities and User-Generated Content By Jianqing Chen; Hong Xu; Andrew B. Whinston
  2. Fallacies, Collapses, Crises. Now What? By Lazarides, Themistokles; Drmmpetas, Evaggelos

  1. By: Jianqing Chen (Haskayne School of Business, The University of Calgary); Hong Xu (; McCombs School of Business, The University of Texas at Austin); Andrew B. Whinston (; McCombs School of Business, The University of Texas at Austin)
    Abstract: Online communities provide a social sphere for people to share information and knowledge. While information sharing is becoming a ubiquitous online phenomenon, how to ensure information quality or induce quality content, however, remains a challenge due to the anonymity of commentators. This paper introduces moderation into reputation systems. We show that moderation directly impacts strategic commentators incentive to generate useful information, and moderation is generally desirable to improve information quality. Interestingly, we find that when being moderated with different probabilities based on their reputations, commentators may display a pattern of reputation oscillation, in which they generate useful content to build up high reputation and then exploit their reputation. As a result, the expected performance from high-reputation commentators can be inferior to that from low-reputation ones (reversed reputation). We then investigate the optimal moderation resource allocation, and conclude that the seemingly abnormal reversed reputation could arise as an optimal result. The paper concludes with a discussion of the development of a scientific moderation system with application to academic publishing.
    Keywords: moderation, reputation, online community, knowledge management
    JEL: K21 L41 L42 L12 L86 L63
    Date: 2009–08
  2. By: Lazarides, Themistokles; Drmmpetas, Evaggelos
    Abstract: The current crisis has been seen as the result of a “few bad apples”. The paper argues that the crisis is systemic and based on fallacies and misconceptions in the design and function of the economic – corporate system. Organizational and economic theories are based on hypotheses that lead to faulted decisions on how the system should be regulated and designed. The paper proposes that a new theory is needed. Disjoint approaches of the current situation are not suitable. Law, Organization theory, Economics, Finance and Accounting need to converge in order to formulate a theory that encompasses all factors and it is holistic. Introduction of corporate governance systems that are as dynamic as the organizational, ownership, product and capital market are, are necessary in order to create a stable and effective corporate environment.
    Keywords: Crisis; Fallacies; Corporate Collapses; Corporate Governance
    JEL: K22 G15 F01 G34 G28 L22
    Date: 2009–10–02

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