My study examines the relationship between principal and agent in a moral hazard setting where the principal has the ability to monitor the actions of the agent at an interim stage of the project. I show that monitoring can induce the agent to exert higher levels of effort and can result in a reallocation of project payoffs between the two parties. This reallocation is not a one-way street: Situations exist where monitoring encourages greater effort from the agent, resulting in greater project payoffs for both principal and agent. For projects that are characterized as high-risk, high-reward projects where agent involvement is costly, monitoring is often the optimal strategy; this is an explanation for why venture capital type investments are the subject of intense monitoring. When the principal can share monitoring results at an interim stage with the agent, the agent is able to modify his effort levels in certain situations for the benefit of both parties.

China's key forested region is located in the northeast. This region consists of state forest enterprises which manage harvesting and reforestation and have represented the most important source of wood supplies since the 1950s. Deforestation is a major problem there, however, and has resulted in several central government reforms. We develop a framework for assessing the social cost of state forest enterprise deforestation. We first develop a two-principal, one-agent model that fits the federalistic organization state forests, in that state forest managers make (potentially hidden) decisions under influence of provincial and central government policies and quotas meant to direct manager behavior. This model is used to derive an expression of the social cost of these hidden actions as well as a comparison of first and second best government policies. We then use panel data from a survey conducted by the Environmental Economics Program in China (EEPC) to compute social welfare losses and use a regression approach to confirm the main factors in these costs in practice. A sensitivity analysis shows that lower harvesting limits and a more accurate monitoring system are the keys to lowering social welfare loss. These are more important than conventional instruments used by the governments such as wages for managers that achieve certain targets. Through regression analysis we find that the remote areas with a higher percentage of mature natural forests are the ones that will always have the highest social welfare loss. These areas are the hardest to monitor, but our results show they must be a critical focus moving forward. / M.S. / China's key forested region is located in the northeast. This region consists of state forest enterprises which manage harvesting and reforestation and have represented the most important source of wood supplies since the 1950s. Deforestation is a major problem there. We develop a framework for assessing the damage to the society because of deforestation. We develop a theoretical model to describe the forest management structure, in which state forest managers make (potentially hidden) decisions under influence of provincial and central government policies. This model is used to derive an expression of the damage. We then use data from a survey conducted by the Environmental Economics Program in China (EEPC) to compute the damage and confirm the main factors in these damages in practice. We find that lower harvesting limits and a more accurate monitoring system are the keys to lowering the damage. These are more important than conventional instruments used by the governments such as wages for managers that achieve certain targets. We also find that the remote areas with a higher percentage of mature natural forests are the ones that will always have the largest damage. These areas are the hardest to monitor, but our results show they must be a critical focus moving forward.

Thesis (MEd)--Stellenbosch University, 2012. / Includes bibliography / ENGLISH ABSTRACT: This thesis focuses on the critical role of the new principal as agent of change. “New principal” in this context is a principal who has been at a specific school for between one and five years. He or she may have been promoted from a post at the same school or have been a principal at another school beforehand. The thesis highlights the tangible changes these principals made during their time at these schools, from raising the morale of educators, to improving academic results of learners, to increasing the level of involvement of parents as well as community members. The literature survey focuses on change in school contexts where urgent and far reaching change is necessary. It shows how complex the process is and the various stages that are involved. The literature underlines that change and resistance are sides of the same coin. It seems that successful change requires that the principal as an agent and initiator of change has a clear set of strategies to handle the inevitable resistance to the process. The literature review also explores the different stages of resistance and the considerations necessary to ensure that the change process leads to a peaceful conclusion that benefits the school as a whole. The main collection instrument used in this qualitative research is a semi-structured interview on the theme of change. The study uses the narratives of four principals, two from secondary schools and two from primary schools from dysfunctional and low-performing schools that emerged, to explore the reasons for their success. Findings show all these ‘new’ principals were at schools affected by socio-economic factors that had a negative effect on the academic results of learners. The attempts these principals made were initially met with resistance, particularly from educators who had been at the school for some time, who did not see any need to make changes at the school. It seems the findings show that the principals in this study always had an appropriate strategy to deal with the situations that arose. This makes them truly transformational leaders, i.e. leaders with the necessary expertise who can enable their followers to perform better than they thought they could and work for the good of the institution rather than their own self-interest. These are the type of leaders that schools need to make our education system as effective as it needs to be. In the interests of making dysfunctional or poorly performing schools a better place of teaching and learning for all learners and educators, further research should build on the work done here. Particular attention should be given to the management style of effective school such as the new principals at these particular schools. This will provide us with better academic “lenses” to observe the necessary passion and commitment with which these changes are made, and the ways in which principals are able to endure and overcome any resistance to change. / AFRIKAANSE OPSOMMING: Hierdie tesis fokus op die kritieke rol van die “nuwe prinsipaal (skoolhoof) as agent van verandering”. “Nuwe prinsipaal” in hierdie konteks bedoel prinsipaal is ''n persoon wat tussen een en vyf jaar by n spesifieke skool was. Hierdie persoon kan in hierdie pos as prinsipaal by hul hiudige skool bevorder geword het, of as prinsipaal by n ander skool in die pos as prinsipaal gewerk het. Hierdie tesis bring na vore die sigbare veranderings wat hierdie prinsipale aangebring het gedurende hul termyn by hierdie skole, van die opheffing van die moreel van onderwysers tot die verbetering van die akademiese uitslae van leerders, tot beter betrokkenheid van ouers en gemeenskaplede by die skool. Die literere navorsing fokus op verandering binne die skool konteks waar dringend en vergaande verandering 'n noodsaaklihheid geword het. Dit bewys die komplekse aard en die verskillende stadiums verbind daarmee. Die literatuur beklemtoon die feit dat verandering en weerstand twee kante van dieselfde muntstuk is (gaan saam). Dit blyk suksevolle veranderings verg van die prinsipaal as agent en inisieerder van verandering, duidelike strategiee om die onafwendbare of onvoorspelbare weerstand te bestuur in die proses. Die literere oorsig ondersoek die verskillende stadiums van weerstand endie nodige vermoens om die proses van verandering te ondersteun, en tot voordeel van die skool as geheul te bevoordeel. Die vernaamste instrument wat in die kwalititiewe navorsing gebruik is, was n semi-struktuere onderhoud gebaseer op die tema van verandering. Hierdie studie gebruik die verhalende aard van die vier prinsipale, twee van sekondere skole, en twee van primere skole, almal van disfunktionele en lae-voerende skole, wat die rede vir hul sukses bepaal het. Bevindings wys dat al die “nuwe prinsipale” by skole was wat beinvloed was deur sosio-ekonomiese faktore wat 'n negatiewe uitwerking gehad het op die akademiese uitslae van leerders. Die pogings van die prinsipale was aanvanglik met weerstand gepaard gegaan, veral van opvoeders wat vir 'n aantal jare by die skool was, en nie die nodigheid vir veranderings gesien het nie. Bevindings in die studie toon dat die prinsipale altyd gereed was met die gepaste strategie om die situasie te hanteer. Die het van hulle ware transformele leiers gemaak, m.a.w. leiers met die nodige vaardighede, wat hulle in staat gestel het om hulle volgelinge bemagtig het om beter te doen as wat hulle gedink het hulle in staat was, en gewerk het tot die voordeel van die skool as instansie en nie tot hulle eie belange as prinsipale nie. In die belange en voordeel om van disfunksionele of swak akademiese skole 'n beter plek van onderrig en opvoeding vir alle leerders en opvoeders te maak, word voorgestel dat verdere navorsing onderneem word. Daar moet veral gefokus word op, die bestuursstyl van geaffekteerde skole soos die nuwe prinsipale van hierdie spesifieke skole. Dit sal ons met beter akademiese lense toerus om die nodige passie en toegewydheid te observeer waarmee hierdie veranderings gemaak was, en die maniere waarmee die prinsipale gevolhard het teen die stryd om weerstand teen te staan in die proses tot verandering.

京都大学 / 新制・課程博士 / 博士(経営科学) / 甲第23355号 / 経営博第12号 / 新制||経営||2(附属図書館) / 京都大学大学院経営管理教育部経営科学専攻 / (主査)教授 山田 忠史, 教授 原 良憲, 教授 山本 貴士 / 学位規則第4条第1項該当 / Doctor of Philosophy in Management Science / Kyoto University / DFAM

This dissertation consists of three essays in theoretical and applied microeconomics: the first essay is in cooperative game theory, and the second and third essays relate to forest economics. The first chapter studies a class of cooperative games dubbed ``r-essential games''. Cooperative game theory has proposed different notions of powerful players. For example, big-boss games (Muto et al., 1988) and clan games (Potters et al., 1989) are particular cases of veto games (Bahel, 2016). The first chapter extends these veto games by assuming that there is a given subset of powerful (or essential) players, but only a few (as opposed to all) essential players are required for a coalition to have a positive value. The resulting games, which are called r-essential games, encompass convex games (Shapley, 1971) and veto games. We show that r-essential games have a nonempty core. We give a recursive description of the core. Moreover, it is shown that the core and the bargaining set are equivalent for every r-essential game. An application to networks is provided. The second chapter employs a two-principal, one-agent model to estimate the social cost of fiscal federalism in China's northeast native forests. China's key forested region is located in the northeast and consists of state forest enterprises which manage forest harvesting and reforestation. Deforestation is a major problem there and has resulted in several central government reforms. We develop a framework for assessing the social cost of state forest enterprise deforestation. We first develop a two-principal, one-agent model that fits the federalistic organization of state forests, in that state forest managers make (potentially hidden) decisions under influence of provincial and central government policies. This model is used to quantify the social cost of these hidden actions. We then use panel data from a survey conducted by Peking University to compute social welfare losses and to formally identify the main factors in these costs. A sensitivity analysis shows that, interestingly, command and control through lower harvesting limits and a more accurate monitoring system are more important to lowering social welfare losses than conventional incentives targeting the wages of forest managers. Through regression analysis we also find that the more remote areas with a higher percentage of mature natural forests are the ones that will always have the highest social welfare losses. The third chapter studies the problem of choosing a rotation under uncertain future ecosystem values and timber prices. This problem is nearly as old as the field of forest economics itself. A forest owner faces various uncertainties caused by climate change and market shocks, due to its long-term nature of production and the joint production of interrelated timber and amenity (non-harvesting) benefit streams. The vast literature in stochastic rotation problems simply assumes a known probability distribution for whatever parameter is uncertain, but this type of assumption may lead to misspecification of a rotation decision model if a forest owner has no such information. We study a more relevant question of how to choose rotation ages when there is pure (or Knightian) uncertainty, in that the forest owner does not know distributional features of parameters and further can be averse to this type of information deficit. This chapter is the first to investigate pure uncertainty in amenity benefit streams and is also the first to analytically solve a stochastic rotation problem under pure uncertainty in either amenity streams or market prices. We use robust methods developed in macroeconomics that are particularly suited to forest capital investment problem, but with important differences owing to the nature of forest goods production. The results show that newer models suggesting rotation ages could be longer under volatile parameter distributions do not hold generally when pure uncertainty and forest owner uncertainty aversion is considered. Rather, the earlier literature showing faster or greater harvesting with increases in risk under risk neutrality may actually be a more general result than current literature supposes. In particular, we find that a landowner tends to harvest more when his degree of uncertainty aversion is higher and the model is misspecified by assumption, or when the volatility of an uncertain process is higher. These situations tend to magnify model misspecification costs, especially because the forest manager always assumes the worst case will happen when there is uncertainty. This implies the decision maker is pessimistic in the sense that he or she is always trying to maximize the utility under the worst possible state of nature (the lowest amenity benefit or the lowest timber price). Whether landowners are in fact uncertainty averse and assume the worst case in their decisions remains to be empirically investigated, but our work suggests it is an important question that must be answered. / Doctor of Philosophy / This dissertation consists of three essays in theoretical and applied microeconomics: the first essay is in cooperative game theory, and the second and third essays relate to forest economics. The first chapter studies a class of cooperative games dubbed ``r-essential games''. Cooperative game theory has proposed different notions of powerful players. For example, veto games (Bahel, 2016) have powerful players that are named veto players. Any coalition needs to include all these powerful players to achieve a positive coalition value. The first chapter extends these veto games by assuming that there is a given subset of powerful (or essential) players, but only a few (as opposed to all) essential players are required for a coalition to have a positive value. The resulting games, which are called r-essential games, encompass two classic games, convex games (Shapley, 1971) and veto games. We show that each r-essential game has at least one solution that is an allocation guaranteeing that no coalition can do better on its own. We provide a process allowing to compute this allocation in each r-essential game. An application to networks is provided. The second chapter estimates the damage of deforestation in China's northeast forests. This region consists of state forest enterprises which manage harvesting and reforestation and have represented the most important source of wood supplies since the 1950s. Deforestation is a major problem there. We develop a framework for assessing the damage to the society because of deforestation. We develop a theoretical model to describe the forest management structure, in which state forest managers make (potentially hidden) decisions under influence of provincial and central government policies. This model is used to quantify the damage. We then use data from a survey conducted by Peking University to compute the damage and confirm the main factors in these damages in practice. We find that lower harvesting limits and a more accurate monitoring system are the keys to lowering the damage. These are more important than conventional instruments used by the governments such as the wages for managers that achieve certain targets. We also find that the remote areas with a higher percentage of mature natural forests are the ones that will always have the largest damage. These areas are the hardest to monitor, but our results show they must be a critical focus moving forward. The third chapter studies when should a forest owner harvest under uncertain future ecosystem values and timber prices. A forest owner faces various uncertainties caused by climate change and market shocks, due to its long-term nature of production and the joint production of interrelated timber and non-harvesting benefit streams (such as the recreation value, the biodiversity value and the clean air supported by forests). Previous studies assume a known probability distribution for whatever parameter is uncertain, but this type of assumption may lead to a wrong decision model if a forest owner has no such information. We study a more relevant question of how to choose when to harvest with pure uncertainty, in that the forest owner does not know distributional features of parameters and further can be averse to this type of information deficit. This chapter is the first to investigate pure uncertainty and is also the first to analytically solve a harvest decision making problem under pure uncertainty in either non-harvesting benefit streams or market prices. We use macroeconomics methods that are particularly suited to forest capital investment problem. We find that a landowner tends to harvest more when there is pure uncertainty. Because the forest manager is pessimistic and always thinks the worst case will happen when there is uncertainty.