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This paper examines analysts' use of earnings information and draws implications for the stock market role of the financial reporting regulator. Evidence from participant observation and from interview research suggests that: first, analysts treat the announcement of earnings with immediacy and importance and, further, they make use of the components of FRS3 in extracting a measure of ‘normalised' earnings; second, analysts do not, however, have a rational economic incentive to regard accounting information as their exclusive (or even their primary) focus of interest, and therefore financial statement analysis is not necessarily their core competence; third, analysts’ interpretation and use of earnings information is rather superficial, and there is limited understanding of underlying issues of recognition and measurement, and also of the interactions between earnings and the balance sheet. Overall, the analysis suggests an important role for the financial reporting regulator in compensating for analysts' inherent ‘disinterest’ in accounting. Financial reporting standards must be designed such that their actual content is consistent with the analysts' (uninformed) expectations of this content, otherwise the analysts' limited understanding will generate false assumptions and, thereby, unintended real effects on share prices.
It is argued that no simple correlation can be established between corporate social performance and corporate financial performance. The activities that generate CSP do not directly impact the company's financial performance, but instead affect the bottom line via its stock of reputational capital - the financial value of its intangible assets. It is suggested that corporate citizenship programs can be designed to help companies address reputational threats and opportunities to achieve reputational gains while mitigating reputational losses.
The 3rd International Conference on Corporate Reputation, Image and Competitiveness brought together academics and practitioners from a variety of fields to discuss many critical issues on the topic of how corporate reputation can contribute to corporate performance. In this paper, several of the presentations are overviewed to draw out common themes from the papers presented at this conference. After identifying common themes, unifying framework is offered to bring together the disparate fields that contribute to one common topic, that of corporate reputation. Creation of a common framework is critical to advancing the study of corporate reputation and its influence on corporate performance.
This report identifies constraints and opportunities for the restoration of economic exchange after nuclear war. Four survival scenarios are postulated based on high or low levels of damage to (1) institutions that signal trading opportunities, reduce transaction costs, and regulate and enforce contracts, and (2) resources that are used to create and define wealth. The four scenarios are Best case, Worst Case, Resource Abundance, and an Institution Intensive case. Discussed in depth are such items as property rights, barter, currency, trust, credit, supply and demand, and trust as related to authority.
This case focuses on how much external financing a firm needs and what securities the firm should issue to raise this financing. Cox Communications is a major player in the cable industry, which is consolidating due to technological changes/capabilities brought about by the Internet. The corporate treasury of Cox Communications must decide how much external financing is necessary to finance a series of intra-industry acquisitions that Cox has recently undertaken. The choices are plain-vanilla equity, debt, asset sales, and a new equity-linked derivative known as FELINE PRIDES, offered by Merrill Lynch. The treasurer and his team must make this decision facing the usual market constraints. There are also some special constraints, including maintaining financial flexibility for further acquisitions and limiting the dilution of Cox's largest shareholder, who owns nearly 70% of the firm.
Internet based information and communication technology provides the opportunity for small firms to improve their competitiveness. This paper presents a methodology that responds to the needs of small firms whilst overcoming the constraints to their use of these technologies. Key features of this methodology are: provision of a turnkey package of hardware, software, installation and training for Internet connection and operation; identification of opportunities for integrating Internet ICT into business processes that will deliver performance improvement; ongoing IT and business support for a year. The effectiveness of this methodology was examined during its application in 21 SME automotive component suppliers in the West Midlands region of England. This exercise found that 90 per cent of firms continued to use their Internet based ICT capability after a year.
The theory, principles and practice of multi-agent systems is typically characterised as a computational and engineering discipline, since it is through the medium of computational systems that artificial agent systems are most commonly expressed. However, most definitions of agency draw directly on non-computational disciplines for inspiration. During the 1999 UK workshop on multi-agent systems, UKMAS'99, we invited four speakers to address the conceptualisation of multi-agent systems from their perspective as non-computer scientists. This paper presents their arguments and summarises some of the key points of discussion during the panel.
The renewed interest in the concept of the psychological contract has come to the fore in attempts to describe, understand and predict the consequences of changes occurring in the employment relationship. Recognizing that the employment relationship includes two parties to the exchange process, we set out to examine the content and state of the psychological contract from both the employee and employer perspective. The two perspectives permit an examination of the mutuality of obligations, which has not received much empirical attention to date. The research methodology consists of two surveys conducted in a large local authority directly responsible and accountable for a range of public services including education, environmental health and social care to the local population. The key findings suggest that the majority of employees have experienced contract breach. This view is also supported by managers, as representatives of the employer, who further indicate that the organization, given its external pressures, is not fulfilling its obligations to employees to the extent that it could. Overall, the results indicate that employees are redressing the balance in the relationship through reducing their commitment and their willingness to engage in organizational citizenship behaviour when they perceive their employer as not having fulfilled its part in the exchange process.
Individuals and social systems are often portrayed as risk averse and resistant to change. Such propensities are characteristically attributed to individual, organizational, and cultural traits such as risk aversion, uncertainty-avoidance, discounting, and an unwillingness to change. This paper explores an alternative interpretation of such phenomena. We show how the reproduction of successful actions inherent in adaptive processes, such as learning and competitive selection and reproduction, results in a bias against alternatives that initially may appear to be worse than they actually are. In particular, learning and selection are biased against both risky and novel alternatives. Because the biases are products of the tendency to reproduce success that is inherent in the sequential sampling of adaptation, they are reduced whenever the reproduction of success is attenuated. In particular, when adaptation is slowed, made imprecise, or recalled less reliably, the propensity to engage in risky and new activities is increased. These protections against the error of rejecting potentially good alternatives on inadequate experiential evidence are costly, however. They increase the likelihood of persisting with alternatives that are poor in the long run as well as in the short run.
A typical argument in Marxist and radical writings on economic organization is that prevailing practices, rather than being the most efficient, have been adopted in order to increase the share of the surplus of capitalists. Using an incomplete contract approach, this article develops a model which demonstrates how and when adopting an inferior economic organization could be profit maximizing. This model makes possible a detailed discussion of the conditions under which Marxist and radical claims about, for example, `deskilling', can be expected to hold. It is demonstrated that such claims could be derived using standard formal economic arguments. However, the model also shows that these claims are likely to be valid only under certain circumstances.
CSFB equity research analyst Laura Martin publishes a report on valuing Cox Communications that introduces an innovative approach to valuation. She contends that EBITDA multiple analysis, typical for the cable industry, is flawed because it overlooks the value of the "stealth tier" (unused capacity on cable companies' fiber optic network). Martin proposes using real options valuation to impute value to the stealth tier, and she thereby arrives at a higher valuation for Cox stock. This provides the context for contrasting several valuation methodologies--traditional DCF analysis, regression-based ROIC and multiple analysis, and real option theory--and assessing how selected assumptions impact the various valuation techniques. In particular, Martin reviews ways in which the industry is evolving and students can think about how these changes impact which valuation method is most appropriate. More generally, this case provides a context for discussing the role of equity research analysts, highlighting all the constituencies they serve and how this can create conflicts of interest. Martin's application of real options theory provides an opportunity to evaluate where it works, where it doesn't, and why.
This paper examines investment decisions in an economy with two financial markets: an official market, which is subject to rationing due to an interest rate ceiling, and an unrestricted market, with a higher interest rate. In this context, the long-run equilibrium aggregate capital stock is unambiguously higher than in the absence of the interest rate ceiling, even though its relationship with the ceiling is non-monotonic. Empirical results using aggregate panel data from 52 developing countries for the period 1974–1988 provide support for the model, particularly in economies that have some access to international capital markets.
Production of fresh vegetables for export has grown rapidly in a number of countries in sub-Saharan African over the past decade. This trade brings producers and exporters based in Africa together with importers and retailers in Europe. Large retailers in Europe play a decisive role in structuring the production and processing of fresh vegetables exported from Africa. The requirements they
specify for cost, quality, delivery, product variety, innovation, food safety and quality systems help to determine what types of producers and processors are able to gain access to the fresh vegetables chain and the activities they must carry out. The control over the fresh vegetables trade exercised by UK supermarkets has clear consequences for inclusion and exclusion of producers and exporters of differing types, and for the long-term prospects for the
fresh vegetables industry in the two major exporting countries studied, Kenya and Zimbabwe.
Production of fresh vegetables for export has grown rapidly in a number of countries in sub-Saharan Africa over the last decade. This trade brings producers and exporters based in Africa together with importers and retailers in Europe. Large retailers in Europe play a decisive role in structuring the production and processing of fresh vegetables exported from Africa. The requirements they specify for cost, quality, delivery, product variety, innovation, food safety and quality systems help top determine what types of producers and processors are able to gain access to the fresh vegetables chain and the activities they must carry out. The control over the fresh vegetables trade exercised by UK supermarkets has clear consequences for inclusion and exclusion of producers and exporters of differing types, and for the long-term prospects for the fresh vegetables industry in the two major exporting countries studied, Kenya and Zimbabwe.
This paper is concerned with the discipline of Operations Management. The paper looks at the convergence and divergence of research in OM in Scandinavia, the US, and the UK. The three different research traditions are described and analysed separately and then compared and contrasted. A short example is presented from the management of advanced technology literature. A synthesis is offered that locates the three traditions on Jick’s “three-horned dilemma”. Opportunities for researchers in each tradition to learn from the others are described.
A large literature has evolved in the thirty years since the seminal work on combining forecasts. Despite this, when evaluating performance we only look at measures of accuracy and thus ignore most of the rigour of time series analysis. Furthermore, the output from a combination of forecasts is just a single point estimate which is insufficient for business planning models that take explicit account of risk and uncertainty. In this paper, we review evidence on the performance of different combining methods with the aim of providing practical guidelines based on three properties of the forecast errors: variance, asymmetry and serial correlation. The evidence indicates that using different criteria leads to distinct preferences, and that the properties of the individual forecast errors can strongly influence the characteristics of the combination's errors. We show that a practical approach to combining also requires a degree of judgement on the attributes of error specification.
In December 1996, Enron Europe and The Eastern Group were on the verge of signing an innovative transaction in the utility industry. Eastern was going to buy a long-term option to convert natural gas into electricity from Enron, thereby giving it the economic right to operate a "virtual" power station. This structure was vastly different from the traditional independent power plant (IPP) structure, and the executives involved had to convince their superiors of its wisdom before they could proceed. This case was jointly written for Large-Scale Investment and Corporate Financial Engineering, and it covers topics related to both project finance and financial engineering. It illustrates a new paradigm in the electric power industry: the creation of virtual power stations backed by physical power stations with merchant exposure. It also illustrates how physical operations (constructing and operating a power plant) can be used to offset contractual obligations and trading exposures.
Objectives: To study the relationship between research evidence and clinical behaviour change in the UK National Health Service (NHS) in the period 1995–1997 by examining the ‘careers' of change issues designed to reshape clinical practice, the impact of such change efforts, and the factors shaping change outcomes.
Methods: Comparative case study methods were used. Four clinical change issues were studied using semi-structured interviews (n=119) and documentary analysis in one English NHS region. For each issue, there was an overview semi-structured interview survey of the issue at regional level, followed by an intensive analysis of its impact at local level on the practice of specific clinical groups.
Results: There was a weak relationship between the evidence base and its diffusion. The diffusion and take-up of scientific evidence were shown to be socially constructed. Different forms of evidence were differentially accepted by individuals and groups. Specific organisational and social factors affected this pattern of impact. The general management hierarchy of the NHS played a very limited role in enabling evidence-based clinical change.
Conclusions: The implementation of evidence-based medicine is a complex and contested process. The results of this study confirm a professional dominance model of clinical behaviour change and identify tacit expert knowledge as a key power resource in shaping the way research evidence influences clinical practice.
This article examines empirical evidence on the impact of the introduction of a quasi-market in healthcare in the UK on professionals, especially doctors. Data are drawn from two longitudinal studies occurring between 1990 and 1994, of aspects of the changes to the health system. Data collection involved a range of methods, including observation, interviews, questionnaires and archival material. The findings show that a unilateral analysis of the impact of the quasimarket on professionals is inadequate to understand the situation. The responses of the professionals to change have had a major influence on the outcomes. Professionals have not uniformly lost power, some have gained considerably. Explanations of the variance of impact and the substantial power shifts have to take account of a range of contextual factors. The market has not had a major impact on the technical autonomy of the doctors. Consequential structural changes have produced a new category of professional managers who are actively managing their colleagues' performance.
In a dynamic model of moral hazard, competition can undermine prudent bank behavior. While capital-requirement regulation can induce prudent behavior, the policy yields Pareto-inefficient outcomes. Capital requirements reduce gambling incentives by putting bank equity at risk. However, they also have a perverse effect of harming banks' franchise values, thus encouraging gambling. Pareto-efficient outcomes can be achieved by adding deposit-rate controls as a regulatory instrument, since they facilitate prudent investment by increasing franchise values. Even if deposit-rate ceilings are not binding on the equilibrium path, they may be useful in deterring gambling off the equilibrium path.
Venture capital financing is widely believed to be influential for new innovative companies. We provide empirical evidence that venture capital financing is related to product market strategies and outcomes of start-ups. Using a unique hand-collected database of Silicon Valley high-tech start-ups. Using a unique hand-collected database of Silicon Valley high-tech start-ups we find that innovator firms are more likely to obtain venture capital than imitator firms. Venture capital is also associated with a significant reduction in the time to bring a product to market, especially for innovators. Our results suggest significant interrelations between investor types and product market dimensions, and a role of venture capital for innovative companies.
Previous theories of financial market rationing focussed on a single market, either the credit or the equity market. An interesting question is whether credit and equity rationing are mutually compatible, and how they interact. We consider a model with two-dimensional asymmetric information, where entrepreneurs have private information about both the expected returns and the risk of their projects. We show that credit and equity rationing may occur individually or simultaneously. Moreover, competition between the two markets may generate the adverse selection that leads to rationing outcomes.
Describes a two‐ and, later, a three‐dimensional view of supply chain dynamics within a theoretical framework derived from research carried out in the UK automotive industry. However, the authors believe that the models developed have a far wider applicability than this narrow sectoral and geographic focus. The research has been developed within two research programmes. The first programme, called “LEAP” (lean processing programme), involves Corus (formerly British Steel Strip Products), two steel service centres and six major UK‐based automotive component manufacturers, all linked within a common supply chain. The second programme, called “3DayCar”, involves 20 European industrial sponsors including six automotive manufacturers. Both programmes are supported by the UK Government Innovative Manufacturing Initiative (IMI). Conclusions based on the waves analogy will be applied to a real‐life setting in order to suggest appropriate business strategies to achieving a lean value stream.
This paper examines the different growth trajectories of the personal computer, hard disc drive, and software sectors in Taiwan since the 1980s. Taking an institutionalist perspective, we emphasize the importance of institutionalized rules of the game in shaping economic behavior within social systems. We explain success and failure in the three sectors according to different degrees of fit between the rules of the Taiwanese national system of production and the rules of the respective technology systems. Implications for business and government policy are drawn out.
Systematically evaluates changes in people management in one case study, the London Borough of Brent, as the major arena for the regulation of employment government moves from the national to the authority level. Considers the impact of upstream decisions on mission, purpose and structure and of downstream decisions on employment relations. as they relate to the structure of the personnel function, the role of line mangers in personnel activities, the way staff are treated and the role of the unions, based upon a strategic choice model. Argues that there are, indeed strong linkages between Brent upstream decision to become a "competitive market" authority and devolve decision making to business units and the dimensions of employment relations distinguished. However, the consequence of the upstream-downstream relationship were not necessarily as intended by the Borough, with some of the results having highly dysfunctional consequences for the organization.
Drawing on a strategic choice model, this article examines the extent to which public service organisations have used their newly established employment relations discretion. Constrained by external pressures and upstream decisions on purpose and structure, the exercise of genuine choice is seen to vary between organisations and according to the nature of the issue.
In this article, the authors argue for more theoretical discussion and empirical research into the organizational and managerial dynamics of commercial cultural production. Their concern grows out of their observation that management research is neglecting cultural production as a serious object of investigation despite its economic, social, and political significance. Moreover, even when management researchers have studied cultural production, the distinctive characteristics and dynamics of cultural industries have largely eluded the traditional research approaches adopted. As a result, the unique dynamics of cultural production remain largely uninvestigated.
Discusses the various aspects of corporate governance in Great Britain. Differences in concentration of ownership between Great Britain and elsewhere in Europe; Characteristics of the board system; Role of non-executive directors or institutional investors in the performance of governance functions.
There is accumulating evidence of a relationship between financial development and economic growth. Several studies report a relation between the size of financial systems at the start of a period and subsequent economic growth. Controlling for other considerations, financial development appears to contribute to growth. A range of measures of financial development are relevant - the volume of monetary assets, the size of banking systems and the size of stock markets.
This paper examines the relation between financial, corporate and legal systems, and economic performance in different countries. It reviews international comparisons that undertake detailed analyses of individual, developed countries and studies that use large, cross-country data banks, including developing countries. While the former do not provide evidence of a clear relation between different types of systems and economic performance, the latter report a strong association of financial development with economic growth. A recent theoretical literature offers a way of reconciling these two sets of studies. It points to a relation between financial/ corporate systems and types of activity with some systems favouring high risk, short-term investments and others promoting long-term, relatively low risk investments. These theories also suggest that systems may be related to stages of economic development. The paper summarizes a first empirical study that reports an association between financial/corporate systems, types of activity and stages of economic development. The paper considers the implications of these relations for the design of financial and corporate systems at different stages of their development. It argues for diversity in systems and regulation that encourages competition between rather than harmonization of systems.
This chapter studies the bidding for a copper mine that was offered for sale by the Peruvian government as part of the country's privatization program. The mine itself had a valuable real option component, in the form of the right to develop the mine after completing exploration, which we analyze using Monte Carlo methods. The novel aspect of the transaction was the type of bid requested by the Peruvian government, which essentially requested bidders to state both the premium that they would pay and exercise price they would set for this real option. This structure gave rise to incentives which affected the amount that firms would offer, their preferences between bidding premium and exercise price, the identity of bidders, the likelihood of ultimate development, and the likelihood of ex post renegotiation of the contract.
The use of consumer pressure in greening the economy has long been advocated by environmentalists. This article takes the view that the traditional image of the consumer as the primary agent of environmental change is inadequate. Efforts to green the economy require an understanding of corporations and public organizations as consumers as well as an understanding of individuals as consumers. The article sets out the arguments for treating all organizations as consumers and as a dominant but underemphasized force in greening the economy. It then considers organizational consumption in the context of supply chains, with respect to the issue of agency within the organization and with respect to the transmissions of market signals for innovation. The discussion makes clear the importance of considering the interorganizational context and ways in which this context both constrains and enables green purchasing initiatives. Reference is made to examples from a range of organizations.
This study reviews papers from the Eastern Finance Association's Symposium on Corporate Finance, Incentives, and Strategy. I identify the common themes underlying these papers and place the studies in the broader context of contemporary academic finance research. Further, I discuss new directions for future research in corporate finance that are suggested in these studies.
This paper models, and experimentally simulates, the free-rider problem in a takeover when the raider has the option to “resolicit,” that is, to make a new offer after an offer has been rejected. In theory, the option to resolicit, by lowering offer credibility, increases the dissipative losses associated with free riding. In practice, the outcomes of our experiment, while quite closely tracking theory in the effective absence of an option to resolicit, differed dramatically from theory when a significant probability of resolicitation was introduced: The option to resolicit reduced the costs of free riding fairly substantially. Both the raider offers and the shareholder tendering responses generally exceeded equilibrium predictions.
This paper simulates, via a genetic-learning algorithm, the problems of free-riding and coordination failure when shareholders are confronted with a tender offer bid between pre-and post-takeover firm value. The outcomes produced in the simulations offer qualified support for the hypothesis that coordination to tendering strategies permitting offer success will only be partial. Further, coordination is impaired by increasing the number of shareholders. Generally increasing the divisibility of share holdings improves coordination and increases shareholder profits. Interestingly, for those parameters of the share tendering distribution which are predicted by the Nash hypothesis (e.g., the proportion of shares tendered) the results of the simulations usually approximate the results predicted by the Nash hypothesis. Moreover, those deviations from Nash outcomes which are observed are usually consistent with the biases observed in experiments on human subjects.
We analyze a distressed firm indebted to many creditors. The firm's owners have the option of choosing the sequence of restructuring negotiations with the creditors. We show that sequencing flexibility is beneficial to firm owners, and that the optimal sequencing of restructuring negotiations involves exploiting the firm's liabilities to some creditors so as to moderate the demands of others. Moderately distressed firms will eschew renegotiations with creditors in strong bargaining positions. Severely distressed firms will extract concessions from all creditors. In this case, owners can gain if they can credibly commit to conditional restructuring agreements that link the concessions of one creditor to concessions by others.
A History of Consumer Credit and Practices, by Rosa-Maria Gelphi and Francois Julien-Labruyere, is reviewed.
Recent writing on contemporary organisations is suggestive of extensive moves to create more responsive and flexible firms. Such claims often rest on studies of exceptional organisations or atypical sectors. Drawing on large-scale surveys of organisational innovations in Europe and Japan, this paper finds widespread but not revolutionary change in terms of organisational structures, processes and boundaries. In comparing innovative forms of organising in 1992 and 1996, the survey results show some similarities in the direction of change between European and Japanese organisations but from different starting points. The pace of innovation is generally much faster in Europe than in Japan. This pattern of more incremental change in Japan and more radical change in Europe is overlaid by a tendency for firms in both regions to seek new forms of organising by simultaneously altering their structures, processes and boundaries. Managing such a complementary change agenda is creating real process challenges for European and Japanese organisations.
Organising to obtain substantial performance advantages is an active and continuous process. It involves managing complex interdependencies and is not simply a journey with a fixed end-point which replaces one static organisation structure with another. Moreover, business leaders who are achieving organisational advantages in this way often find they are managing combinations of change that seem paradoxical. For example, they are:
* Decentralising more operational and strategic decisions, while at the same time managing increasingly tightly those few aspects of the business where top management can add real value.
* Empowering people to work in internal networks, while exercising increasing influence from the corporate centre over behaviours, attitudes and values.
* Organising to achieve wide scope through strategic alliances, while maintaining agility and small scale through outsourcing activities and clarifying and focusing portfolio strategy.
This paper is an agenda for introducing new ways of organising that raise corporate performance.
While many aspects of the collaborative process have been discussed in the management literature, the connection between collaboration and the dynamics of institutional fields has remained largely unconsidered. Yet, collaboration is an important arena for inter–organizational interaction and, therefore, a potentially important context for the process of structuration upon which institutional fields depend. In this paper, we argue that institutionalization and collaboration are interdependent; institutional fields provide the rules and resources upon which collaboration is constructed, while collaboration provides a context for the ongoing processes of structuration that sustain the institutional fields of the participants.
The nature and future of electronic commerce is considered. Four areas of the new economy and its affects on retailers are explained; first the extent to which the emergence of new electronic channels to market has led to distinctive means of businesses differentiation, secondly how business-to-business companies use electronic channels to improve their supply chain, thirdly how companies are dealing with organizational changes, and lastly the future of electronic-commerce is considered.
Considers the challenges to European retailers posed by the growth of e-commerce. Reports, surprisingly, that three Nordic countries outstrip the USA in terms of highest penetration per capita of Internet usage although the UK, France and Germany are considerably below US levels. States that although there are growth opportunities in Europe, these are starting from a low base, and then goes on to outline the barriers to e-commerce entry in Europe, the most significant being EC regulation and multilingual cultural demands. Finally, identifies ways in which European retailers can close the gap, examining the advantages of having an established logistics and distribution structure, local market advantages and the opportunities that can be derived from acting as electronic intermediaries, or gatekeepers.
The Generalized Assignment Problem (GAP) is the problem of finding the minimal cost assignment of jobs to machines such that each job is assigned to exactly one machine, subject to capacity restrictions on the machines. We propose a class of greedy algorithms for the GAP. A family of weight functions is defined to measure a pseudo-cost of assigning a job to a machine. This weight function in turn is used to measure the desirability of assigning each job to each of the machines. The greedy algorithm then schedules jobs according to a decreasing order of desirability. A relationship with the partial solution given by the LP-relaxation of the GAP is found, and we derive conditions under which the algorithm is asymptotically optimal in a probabilistic sense.
Design professionals have increasingly sought to provide clients not only with design solutions to fit existing plans but also with strategic advice for future opportunities. How can designers serve such a role? This study was based on field research with London-based designers and identified four roles they played: that of strategy visualizer, core competence prospector, market exploiter, and process provider. Each role is described, and the implications for successful collaboration on strategic efforts are discussed.
This paper presents a new approach to estimating the conditional probability distribution of multiperiod financial returns. Estimation of the tails of the distribution is particularly important for risk management tools, such as Value-at-Risk models. Using daily exchange rates, a new approach is compared to GARCH-based quantile estimates. The results suggest that the new method offers a useful alternative for estimating the conditional density.
Day-ahead half-hourly demand forecasts are required for scheduling and for calculating the daily electricity pool price. One approach predicts turning points on the demand curve and then produces half-hourly forecasts by a heuristic procedure, called profiling, which is based on a past demand curve. This paper investigates possible profiling improvements. Using a cubic smoothing spline in the heuristic leads to a slight improvement. Often, several past curves could reasonably be used in the profiling method. Consequently, there are often several demand curve forecasts available. Switching and smooth transition forecast combination models are considered. These models enable the combining weights to vary across the 48 half-hours, which is appealing as different forecasts may be more suitable for different periods. Several criteria are used to control the changing weights, including weather, and the methodology is extended to the case of more than two forecasts. Empirical analysis gives encouraging results.
In 1997, France T‚l‚com, the state-owned French telephone company, went through a partial privatization. The government offered current and prior France T‚l‚com employees the opportunity to buy portfolios of shares with various combinations of discounts, required holding periods, leverage, tax treatment, and levels of downside protection. We adapt a neoclassical model of investment decision-making that takes into account firm-specific human capital and holding period restrictions to predict how employees might respond to the share offers. Using a database that tracks over 200,000 eligible participants, we analyze the employees' characteristics and their decisions whether to participate; how much to invest; and what form of stock alternatives they selected.
This case describes the pay packages offered to Sara Becker, a graduating MBA student, including detailed information about two stock option packages (one of which is an indexed option package). She gathers the information and attempts to compare those compensation offers.
Two archetypal approaches to performance improvement in operations are to undertake periodic ''strategic leaps'' or to take frequent small actions in a quest for ''continuous improvement''. Much research on the implementation of advanced manufacturing technologies (AMTs) indicates that even though their introduction appears to be a strategic leap, principles of continuous improvement can be important in determining success. Three such principles are: modularity, accessibility, and inclusiveness. These principles are applied to non-shop floor information technology, an important category of AMT. The monolithic information technologies that have historically been dominant are characterised both by low levels of modularity, accessibility and inclusiveness, and by an installation-based approach to implementation. Recent innovations, however, permit a substantively different, path-based approach. The migration from installation- to path-based approaches is illustrated with the example of enterprise resource planning (ERP) systems. The modularity and accessibility of ERP systems appear to be improving, while inclusiveness lags.
The experimental phenomenon known as ‘probability matching’ is often offered as evidence in support of adaptive learning models and against the idea that people maximise their expected utility. Recent interest in dynamic-based equilibrium theories means the term re-appears in Economics. However, there seems to be conflicting views on what is actually meant by the term and about the validity of the data.
The purpose of this paper is therefore threefold: First, to introduce today’s readers to what is meant by probability matching, and in particular to clarify which aspects of this phenomenon challenge the utility-maximisation hypothesis. Second, to familiarise the reader with the different theoretical approaches to behaviour in such circumstances, and to focus on the differences in predictions between these theories in light of recent advances. Third, to provide a comprehensive survey of repeated, binary choice experiments.
Auctions provide an efficient way of resolving one-to-many negotiations. This is particularly true for automated agents where delays and long communications carry negative externalities. A properly designed auction, tailored to the specific needs of the relevant multi-agent system, can significantly improve its performance. In this paper, we focus on the specific problem of service allocation among autonomous, automated agents, within the context of the ADEPT project, which concerns the BT (British Telecom) business process of providing a quote for designing a network for a customer.
The main contributions of this paper are threefold: First, we show how an English auction can be modifed for services, which are multi-dimensional private value objects. Second, we show how, under certain conditions, auctions can be arranged by the service providing agents, in the cases where the service seeking agents fail to do so. We consider the incentives of all participants, and show how such an arrangement can be in their best interest. Finally, by examining our results for what is, essentially, an application of game-theory and mechanism design to an existing application, we draw some general conclusions on how such concepts can be operationalized in automated agents.
This book traces the evolution of the large industrial corporation in France, Germany, and the United Kingdom from the 1950s to the 1990s. It combines long-run trends with illustrative case studies of leading companies and their managers to present a rich and complex picture of corporate change. In particular, the authors highlight the paradox of increasingly similar patterns of corporate strategy and structure across advanced industrial nations with continuing marked differences in corporate ownership, control, and managerial élites. Despite strong institutional contrasts between the leading European economies, and regardless of the decline of the American model of management, big business in Europe has continued to follow a strategic and structural model pioneered in the United States during the first half of the twentieth century and encapsulated long ago in Alfred Chandler's (1962) 'Strategy and Structure'.