Adaptive estimation with soft thresholding penalties

We show that various robust nonparametric regression estimators, such as the least absolute deviations estimator, can be made adaptive (up to logarithmic factors), by adding a soft thresholding type penalty to the loss function. As an example, we consider the situation where the roughness of the regression function is described by a single parameter p . The theory is complemented with a simulation study.     

Incentives and penalties as means of influencing attendance: a study in the UK public sector

Despite being the largest single source of lost productivity in business and industry, absence from work has not featured as prominently as might have been expected in studies in human resource management. But if, as a new discipline, human resource management is to stimulate fresh insights into perennial problems this matter should be addressed. Drawing upon data from the UK public sector, this article examines various aspects of absence from work with a view to placing the research in this broader context. It is concluded that the indiscriminate application of methods to reduce absence are often ineffective and some measures may actually change employees' work attitudes and perceived equity. This may, in turn, hinder effective human resource management.     

Multiproject scheduling: Analysis of scheduling strategies under unequal delay penalties

The multiproject scheduling problem is investigated under the assumption that delays corresponding to different projects carry different penalties. Five penalty functions are introduced that simulate typical business behavior. These are: 1) assigning the highest penalty to the project requiring the greatest amount of resources; 2) assigning the highest priority to the longest project; 3) assigning the highest priority to the project requiring the least amount of resources; 4) assigning the highest priority to the shortest project; and 5) random assignment. Justification for each case is provided.Two powerful project summary measures were used to generate the test problems. The first measure, average resource load factor (ARLF), identifies whether the location of the peak requirement of all (i.e., combined) resources is in the first or second half of the project's critical path. If each resource is expressed in terms of dollars, then ARLF identifies the location of the peak cash requirement. Since in practice the choice of the scheduling strategy is influenced by the location of the peak cash requirement, performance of the scheduling strategies is analyzed with respect to values of this measure. The second measure, average utilization factor (AUF), calculates the ratio of resource requirements to availabilities. It is shown that problems tested must have different AUF values in order to be classified different for purposes of experimental design. Thus a factorial model of the form, y = Strategy + Penalty + ARLF + AUF + ? was used to generate 385 problems, each requiring 2 to 4 resources, containing 3 to 5 projects and 34 to 63 activities.The computer program used in the study is based on a parallel method of scheduling in which priorities of the activities are determined when the activity is considered for scheduling. Ten scheduling strategies are tested. Some important ones are: 1) to schedule the shortest activity first; 2) to schedule the activity with minimum slack first; 3) to schedule the activity with maximum work content first (i.e., from the project with highest work content); 4) to schedule the shortest activity from the shortest project first; and 5) to schedule the activity with maximum penalty first. Shortest activity first and minimum slack first are popular strategies introduced by other researchers.Using number of times ranked first as our criterion, scheduling the activity with maximum penalty first provides the best results followed by the strategy of scheduling the activity with maximum work content. But when these results are analyzed with respect to existence of a very expensive project (i.e., dominance) in the problem, performance of the maximum penalty strategy improves. When the overall results are analyzed with respect to values of ARLF, a different picture emerges. Then the strategy of scheduling the activity with the highest penalty first provides the best results if the peak requirement is early. When the peak requirement is toward the middle of a project's unconstrained critical path, scheduling the activity with the highest work content provides the best results. When the peak requirement is late in a project's life, scheduling the shortest activity from the shortest project is the best strategy to adopt. These findings were tested for statistical significance by using nonparametric testing procedures and were found to be significant.     

Growth and welfare effects of corruption penalties

This paper analyses the steady-state effect of business corruption penalties on economic growth, corruption and welfare. To that end, the baseline horizontal R&D growth model is extended to include corruption, which is generated in intermediate goods production. Taxation on corruption depresses profits in production but also wages, leading to labor being reallocated from production to R&D, and, therefore, to a higher economic growth rate. Moreover, it also reduces corruption and increases welfare if preferences towards a corruption-free environment are strong enough. The results are in line with the data observed for 15 EU countries.     

Robust bubbles with mild penalties for default

Limited enforcement of debt contracts and mild penalties for default can lead to low equilibrium interest rates, to ensure debt repayment. Low interest rates, in turn, create conditions for bubbles. I show that bubbles in unsecured private debt exist when the punishment for default is a permanent or a temporary interdiction to trade. Bubbles are an inefficient source of liquidity, as they lower interest rates and reduce welfare by discouraging saving.     

Determinants of monetary penalties for environmental violations

This research investigates the likely determinants of monetary penalties for poor environmental performance. We retrieve data from Bloomberg on the monetary penalties imposed on companies in the European Union (EU) found to have performed poorly in corporate social responsibility (CSR), and particularly in the environmental aspects of CSR. Our primary findings reveal that firms with high levels of greenhouse gas and hazardous waste emissions are more likely to receive monetary penalties. On the other hand, firms that invest in green supply chain practices and disclose environment‐related matters avoid monetary penalties more. We also find that firms having executive compensation linked with environmental compliance face more monetary penalties. This finding adds a new dimension to the voluminous research on executive compensation that has investigated primarily the effects of cash and stock option‐based compensation schemes on pay–performance sensitivities. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Endogenous debt constraints in collateralized economies with default penalties

The objective of the paper is to propose endogenous debt constraints that rule out Ponzi schemes and ensure the existence of equilibria in a model with limited commitment and (possible) default. We appropriately modify the definition of finitely effective debt constraints, introduced by Levine and Zame (1996) (see also Levine and Zame (2002)), to encompass models with limited commitment, default penalties and collateral. Along this line, we introduce in the setting of Araujo et al. (2002), Kubler and Schmedders (2003) and Páscoa and Seghir (2009) the concept of actions with finite equivalent payoffs. We show that, independent of the level of default penalties, restricting plans to have finite equivalent payoffs rules out Ponzi schemes and guarantees the existence of an equilibrium that is compatible with the minimal ability to borrow and lend that we expect in our model.     

Testing normality: a GMM approach

In this paper, we consider testing marginal normal distributional assumptions. More precisely, we propose tests based on moment conditions implied by normality. These moment conditions are known as the Stein (Proceedings of the Sixth Berkeley Symposium on Mathematics, Statistics and Probability, Vol. 2, pp. 583–602) equations. They coincide with the first class of moment conditions derived by Hansen and Scheinkman (Econometrica 63 (1995) 767) when the random variable of interest is a scalar diffusion. Among other examples, Stein equation implies that the mean of Hermite polynomials is zero. The GMM approach we adopt is well suited for two reasons. It allows us to study in detail the parameter uncertainty problem, i.e., when the tests depend on unknown parameters that have to be estimated. In particular, we characterize the moment conditions that are robust against parameter uncertainty and show that Hermite polynomials are special examples. This is the main contribution of the paper. The second reason for using GMM is that our tests are also valid for time series. In this case, we adopt a heteroskedastic-autocorrelation-consistent approach to estimate the weighting matrix when the dependence of the data is unspecified. We also make a theoretical comparison of our tests with Jarque and Bera (Econom. Lett. 6 (1980) 255) and OPG regression tests of Davidson and MacKinnon (Estimation and Inference in Econometrics, Oxford University Press, Oxford). Finite sample properties of our tests are derived through a comprehensive Monte Carlo study. Finally, two applications to GARCH and realized volatility models are presented.     

Monitoring mortality: a state-space approach

"A state-space model is developed which provides estimates of decrements in a dynamic environment. The model integrates the actual unfolding experience and a priori or Bayesian views of the rates. The estimates of present rates and predicted future rates are continually updated and associated standard errors have simple expressions. The model is described and applied in the context of mortality estimation but it should prove useful in other actuarial applications. The approach is particularly suitable for dynamic environments where data are scarce and updated parameter estimates are required on a regular basis. To illustrate the method it is used to monitor the unfolding mortality experience of the retired lives under an actual pension plan."     

Immigration policy: a selective approach

Recommendations are offered concerning Japanese policy on the immigration of foreign workers. The author notes that even those countries that used to welcome such immigrants now restrict their entry. The need for a selective policy that would aid internationalization in Japan and strengthen controls on illegal immigrants by requiring employers to secure permits before hiring foreigners is stressed.     

Determination of general equilibrium with incomplete markets and default penalties

This paper is concerned with the existence and computation of general equilibrium with incomplete asset markets and default. Due to the incompleteness of asset markets, the excess demand functions are typically not continuous at prices and delivery rates for which the assets have redundant nominal deliveries. This discontinuity results in a serious problem for the existence and computation of general equilibrium. We show that this problem can be resolved by replacing the nominal delivery matrix with a constant-rank one and restricting the macro variables in a subset of the domains. With this approach, the economies with incomplete markets and default penalties can be analyzed with differentiable homotopy techniques, and thus in the same framework as standard general equilibrium models. As a by-product, the existence of equilibrium is ensured for generic economies. Several computational examples demonstrate the effectiveness of the algorithm and show some quantitative features of equilibria in the model with default penalties.     

Political regimes: a coalition formation approach

What leads to the stability of a particular regime and what causes its demise? With the aid of formal modeling, the paper illustrates the necessary and sufficient conditions for different political regimes to exist. The game involves two factions representing the differing interests of the civil society and the armed forces of a nation. We illustrate the emergence of political regimes that includes both unconstrained and constrained democracies, both military and civilian autocracies and an alliance formed by a segment of the civil society and the military.     

Electronic data interchange: a strategic approach

The potential of EDI is virtually unlimited, but the success of any EDI initiative hinges on its ability to directly support strategies that achieve your institution's business objectives. At its most fundamental level, EDI technology automates current business practices, speeding up the exchange of business information. This application of EDI most often is found in a hospital's material management department. But EDI integrated internally within a hospital and externally with suppliers and vendors has the potential to go beyond simple automation and to transform processes. This is where the full value of EDI can be realized. No matter which level of EDI participation hospital management decides is appropriate to fulfill its business objectives and strategies, EDI will affect the entire institution's exchange of information with its internal and external audiences. The question management must answer is: Will the hospital's EDI strategy be offensive and managed, or defensive and reactive? Today's environment leaves no room for a "no-strategy" EDI option. The options are either to proactively shape EDI, or reactively play catch-up. EDI can work for you. Adequately developing an EDI game plan in support of your business objectives and calling on your suppliers and other trading partners to work with you will ensure EDI is an asset to your facility.     

Preference through indifference: a topological approach

Two problems of consumer theory are approached topologically. An intrinsic topological characterization of transitivity of indifference is provided. Under very weak assumptions, indifference classes are proved to determine the continuous preference inducing them. Moreover, conditions, under which a given topology is the weakest making a preference continuous, are obtained.