Dynamics in tree formation games

Network formation games capture two conflicting objectives of selfish nodes in a network: such nodes wish to form a well-connected network and, at the same time, to minimize their cost of participation. We consider three families of such models where nodes avoid forming edges beyond those necessary for connectivity, thus forming tree networks. We focus on two local two-stage best-response dynamics in these models, where nodes can only form links with others in a restricted neighborhood. Despite this locality, both our dynamics converge to efficient outcomes in two of the considered families of models. In the third family of models, both our dynamics guarantee at most constant efficiency loss. This is in contrast with the standard best-response dynamics whose efficiency loss is unbounded in all three families of models. Thus we present a globally constrained network formation game where local dynamics naturally select desirable outcomes.     

Exploring the relationship between scenario planning and perceptions of strategic conversation quality

This study examines the construct of strategic conversation in a scenario planning context. After defining key terms and a conceptual framework for the strategic conversation, this study presents data gathered from individual participants in a scenario planning project. Data concerning perceptions of strategic conversation skills were collected pre-and post-scenario planning project, and then compared with a standard t-test. Conclusions are drawn and limitations are presented and discussed in depth. Recommendations for improving this research in future studies are also identified.     

The Delphi method as early warning: Linking global societal trends to future radicalization and terrorism in The Netherlands

A Delphi study was performed to answer the question: Which global societal trends relate to future radicalization and subsequent terrorism in the Netherlands? An inventory of two hundred global societal trends and a literature study of radicalization together served as briefing of the participants in the Delphi study. The first two rounds were conducted in anonymous writing. The third round was a face to face focus group meeting. In the first and second round participants scored the trends, adjusted their scores relative to others and provided arguments, and in the focus group meeting, themes were discussed in which the participants remained to have strong opposite views. This approach emphasizes divergence in opinion (‘dissensus’), as opposed to convergence (‘consensus’). Consensus seeking to us seems to be the dominant application of Delphi, but we emphasize the value of seeking dissensus. We hypothesize that in those cases where the opposite views that were discussed kept their ground, this Delphi study may have found early warnings of future radicalization.The essence of this paper is that it is possible, with limited effort, to get a handle on the complex and poorly defined subject of global societal trends influencing future radicalization. Application of the Dissensus Delphi method provided a selection of early warnings that may be looked into with future research.     

Strategic management: The state-of-the-art and beyond

A study of 25 major corporations assesses the state-of-the-art in strategic planning, and explores future prospects for developing a more powerful form of strategic management to cope with the transition to a new economic era. Current planning practices show that large corporations have developed complex strategic information systems, a decision-making process that is inherently organic, and planning operations that embody cybernetic principles. However, the prevailing approach to strategic planning is severely limited because it is based upon an old model of corporate management that has become outmoded: a restricted focus on hard technology leaves critical soft issues unresolved, authoritarian hierarchies produce the typical disadvantages of bureaucracy, and a closed-system orientation isolates the firm from its environment. New approaches to business management seem to be evolving now to overcome these constraints: the frontier of economic progress is shifting to a new form of soft growth, organizational structures are being transformed into entrepreneurial networks, and the institutional role of business is expanding to include its external constituencies. These trends represent key features of a new model of strategic management—the “strategically managed corporation”— that is specifically suited for fostering strategic change.     

Future memories

Although the concept of foresight is now widely used by Anglo-American writers, the Romance-language countries have continued to refer to the concept of la prospective or prospectiva since the early 1960s. Despite cultural differences, the two concepts are very similar. Nevertheless, the author argues that prospective is closer to strategic foresight. The prospective attitude does not wait for change and then react; it aims to master expected change (preactivity) and to induce a desired change (proactivity). Preactivity is what guides all approaches to future studies, forecasting, scenario planning and foresight. Proactivity is more voluntarist, and aims to bring about the desired changes by means of strategic planning. This leads to a hopeful message: We just have to rethink the problems to move forward. The author highlights the enduring relevance of several key thinkers ranging from Saint Augustine and Seneca to Gaston Berger and Igor Ansoff. He emphasizes the importance of a collectivity's thinking together about the future and taking action. Overall the article pleads for rigor yet some common sense explains the utility of participatory foresight with simple tools (morphological analysis, prospective workshops). In conclusion, this article emphasizes two symmetrical errors: ignore the existence of a hammer when in front of a nail or consider every problem a nail because you have a hammer!     

Language,culture and institutions: Evidence from a new linguistic dataset

Kashima and Kashima's (1998) linguistic dataset has played a prominent role in the economics of culture, providing the instrumental variables used in two seminal works to identify the causal effect of culture on institutional quality. However, for economists, this dataset has a number of weaknesses, including poor overlap with a key cultural dataset and reliance on sources of linguistic information of uneven quality. We address these issues by constructing a new linguistic dataset based on an authoritative source of linguistic information, the World Atlas of Language Structures. The resulting dataset has greater overlap with key sources of cultural information, is arguably less subject to selection bias, and provides more refined information regarding key dimensions of linguistic variation. We show that the variables in this dataset are significantly correlated with commonly used measures of individualism and egalitarianism. In addition, we reexamine the key results from the literature on culture and institutions, showing the causal relationship between culture and institutions is robust to the use of the new linguistic instruments.     

Future-oriented technology analysis as a driver of strategy and policy

The methodology known as strategic foresight is an important tool to be used in long-term strategic planning activities and in support of the decision making process in public as well as private sectors. This article addresses the use of strategic foresight applied to the strategic management plan for an agency that deals with the funding and promotion for the development of science, technology and innovation in Brazil, and the logic that permeated its construction, promoting an alliance of the concepts of strategy and foresight. It has as key elements the long-term vision and the adoption of participatory approach and qualitative and quantitative methods. The methodological framework involved the use of different techniques, methods and tools, including, among others, web survey, diagnosis, SWOT, future timeline, interviews, workshops and strategic roadmap.     

A challenge of integrating technology foresight and assessment in industrial strategy development and policymaking

Appropriate demand articulation of emerging technologies to social needs are vital to the economic and social productivity, and it is essential to grasp the future trends of social needs and technology advancement to promote the strategic technology policy. Japan embarked on technology foresight in the early 1970s and has since been conducting a regular Delphi survey approximately every 5 years. To explore a new intelligent methodology for integrating technological seeds and social needs by articulating future demands, this paper reviews the following two cases: the Delphi-scenario writing (DSW) method, which is applied in 1977 for the home/office small facsimile, and the method of general assessment applied in 1972 for informationalization, which focused on the rapidly advancing information society, with a matrix scoring and policy-simulation method. Those new approaches were proved to be a powerful methodology to integrate the technology forecasting and assessment for comprehensive understanding of the emerging technologies and their social impacts in the form of integrated technology road mapping, which supports the integrated strategic planning methodology for enhancing the future innovation system.     

A systems approach to policy analysis and development planning: Construction sector in the Turkish 5-year development plans

In this study, we propose a new model for systems analysis ‘of’ policy and systems analysis ‘for’ policy with the example of construction sector in the Turkish 5-year development plans.Our proposed model—integrated development management model (IDMM)—is conceptually based on the principles of systems thinking and integrated management approach.We present and discuss the results of our work in which we extracted all construction-related policies and strategies from eight 5-year development plans and analyzed them using the IDMM. In the light of the analyses, we give several answers to the question: “Why did the development plans fail to meet their targets in Turkey?” We propose that any development plan has to have claritas-unitas-integritas-consonantia between the management levels (normative, strategic, and operational) and components (goals, structures, and behavior) of IDMM.The paper is the first work that brings the concepts of development planning and foresight together. In a complementary stance, the time of integrating foresight and development planning has come.     

Review of Delphi-based scenario studies: Quality and design considerations

For meaningful scenarios, creative input concerning possible future trends is crucial. Herman Kahn, the father of modern scenario planning, underlined the importance of “thinking the unthinkable” in a significant scenario study. “Blessed with high intelligence, an assertive personality and the research capabilities of the RAND Corporation,” he could rely on genius forecasting. But how can this foresight be creative as well as simultaneously credible and objective if one does not possess Kahn's genius? In this article, we assess the incorporation of expert knowledge via the Delphi technique into scenario planning as a promising option. We discuss possible combinations and identify the span of design alternatives in the existing body of Delphi-based scenario studies through a systematic research review and provide recommendations on how a Delphi-based scenario study should be designed to ensure quality. We recommend focusing on the integration of the Delphi technique only in one phase of the scenario approach. In this way, the design options can be intentionally adjusted to the particular function. We further offer recommendations on how to accomplish this.     

An empirical comparison of implied tree models for KOSPI 200 index options

This paper compares implied tree models for KOSPI 200 index options with regards to the pricing and hedging performance. With Cox, Ross, and Rubinstein's [Cox, J., Ross, S., & Rubinsteinm, M., 1979. Option pricing: A simplified approach. Journal of Financial Economics, 7, 229–263] standard binomial tree (SBT) model as a benchmark, we analyzed three models: Rubinstein's [Rubinstein, M., 1994. Implied binomial trees. Journal of Finance, 49, 771–818] implied binomial tree (IBT), Jackwerth's [Jackwerth, J. C., 1997. Generalized binomial trees. Journal of Derivatives, 5, 7–17] generalized binomial tree (GBT), and Derman and Kani's [Derman, E., & Kani, I., 1994. Riding on a smile. Risk, 7, 32–39] implied volatility tree (IVT) models. The SBT model, the simplest, shows the best performance. Moreover, the delta-hedged strategy in all of the binomial models generates, on average, negative gains. This finding, consistent with the findings by Bakshi and Kapadia [Bakshi, G., & Kapadia, N., 2003. Delta-hedged gains and the negative market volatility risk premium. Review of Financial Studies, 16, 527–566], indicates the existence of a negative market volatility risk premium.     

Simple Markovian equilibria in dynamic spatial legislative bargaining

The paper proves, by construction, the existence of Markovian equilibria in a dynamic spatial legislative bargaining model. Players bargain over policies in an infinite horizon. In each period, a sequential protocol of proposal-making and voting, with random proposer recognitions and a simple majority, produces a policy that becomes the next period's status-quo; the status-quo is endogenous. The construction relies on simple strategies determined by strategic bliss points computed by the algorithm we provide. A strategic bliss point, the dynamic utility ideal, is a moderate policy relative to a bliss point, the static utility ideal. Moderation is strategic and germane to the dynamic environment; players moderate in order to constrain the future proposals of opponents. Moderation is a strategic substitute; when a player's opponents do moderate, she does not, and when they do not moderate, she does. We provide conditions under which the simple strategies induced by the strategic bliss points computed by the algorithm deliver a Stationary Markov Perfect equilibrium, and we prove its existence in generic games with impatient players and in symmetric games. Because the algorithm constructs all equilibria in simple strategies, we provide their general characterization, and we show their generic uniqueness.     

Voting by Successive Elimination and Strategic Candidacy

We study the impact of strategic choices of self-interested candidates of whether or not to enter an election. We focus on strategic candidacy in the context of the tree and binary voting procedures used by small groups such as committees. We offer a comprehensive analysis for the special but important case of voting by successive elimination. Strategic candidacy slightly enlarges the set of candidates that can be equilibrium outcomes relative to the traditional analysis which takes the set of candidates as fixed. Pareto-dominated candidates can be elected in equilibrium under voting by successive elimination when strategic candidacy is considered, in contrast with a fixed set of candidates. Journal of Economic Litterature Classification Numbers: D71, D72.     

Technology roadmap through fuzzy cognitive map-based scenarios: the case of wind energy sector of a developing country

In this research, a national-level wind energy roadmap is developed through scenario planning. Multiple future scenarios are developed using the fuzzy cognitive maps (FCM) approach. This research has extended technology roadmapping (TRM) through FCM-based scenario analysis. Building scenarios with FCM is a new approach, and for the first time, to the best of our knowledge, FCM-based scenarios are developed for the wind energy sector of a developing country. Based on these multiple scenarios, a TRM has been developed. Scenario planning and TRM techniques are combined in this study. This research approach is applied to the wind energy sector of Pakistan as a research case. The TRM has four layers: strategic objectives, targets, barriers, and action items. Expert judgement is used to develop scenarios and TRMs.     

Convergence of outcomes and evolution of strategic behavior in double auctions

We study the emergence of strategic behavior in double auctions with an equal number of buyers and sellers, under the distinct assumptions that orders are cleared simultaneously or asynchronously. The evolution of strategic behavior is modeled as a learning process driven by a genetic algorithm. We find that, as the size of the market grows, allocative inefficiency tends to zero and performance converges to the competitive outcome, regardless of the order-clearing rule. The main result concerns the evolution of strategic behavior as the size of the market gets larger. Under simultaneous order-clearing, only marginal traders learn to be price takers and make offers equal to their valuations/costs. Under asynchronous order-clearing, all intramarginal traders learn to be price makers and make offers equal to the competitive equilibrium price. The nature of the order-clearing rule affects in a fundamental way what kind of strategic behavior we should expect to emerge.     

Capital as a commitment: Strategic investment to deter mobility

This paper analyzes how an early entrant in a market can exploit its head start by strategic investment. The analysis is based on Spence's paper, Investment strategy and growth in a new market, (Bell J. Econ., 10 (1979), 1–19). We frist study the investment game in the no-discounting case, which embodies the key features of mobility deterrence. We establish the existence of a set of perfect equilibria and suggest that one particular equilibrium is most reasonable. This equilibrium, also valid with discounting, involves the follower firm being forever deterred from investing to its steady-state reaction curve, in contrast to Spence's proposed solution.     

Strategic planning, strategic management, strategic foresight: The seminal work of H. Igor Ansoff

H. Igor Ansoff was the prominent reference in the corporate strategy field, especially during the 1960s and 1970s. His bestseller, Corporate Strategy, was the first to give a conceptual framework and a tool box to top managers, consultants and scholars. Recognized as the real pioneer of the field, he was seen by Henry Mintzberg as also the leader of the strategic planning school. The aim of this short article is to show that he was also the father of strategic management and a leader who gave an impressive set of concepts and ideas to promote an integrative and flexible view of strategic planning, strategic foresight, organizational structures and processes.     

A fuzzy goal programming approach to analyse sustainable development goals of India

Energy policy, environmental planning and economic development play a key role in sustainable development. Sustainable development requires suitable and strategic policies satisfying multiple and conflicting objectives. Fuzzy goal programming (FGP) is a well-known approach in multi-criteria decision-making for its practical application. In this article, a FGP approach is proposed to analyse environmental, energy and sustainability goals of India by the year 2030 with reference to the key economic sectors of India. The presented model analyses the improvement opportunities, requirement of efforts and implementation of the sustainable development plans. Numerical illustration is also provided for validation and application of the proposed model.     

A qualitative cross-impact approach to find the key technology

This article presents a qualitative analysis method based on fuzzy relations for a cross-impact model designed for a technology impact assessment. The cross-impact knowledge is often uncertain or fuzzy when dealing with future events. Assessing the cross-impact relationships among future technologies creates a more uncertain or fuzzy situation because of the time and the uncertainty involved in evaluating future technologies. In addition, experts prefer to use linguistic terms or fuzzy values in their predictions. Thus a cross-impact matrix is represented as fuzzy relations on causal concepts. We therefore develop inference algorithms based on fuzzy relations and show a simple technology assessment example to illustrate this approach. This approach is useful in finding the key technology because it considers not only the direct impact but also the indirect impact.