The high cost of accurate knowledge

Many business thinkers believe it's the role of senior managers to scan the external environment to monitor contingencies and constraints, and to use that precise knowledge to modify the company's strategy and design. As these thinkers see it, managers need accurate and abundant information to carry out that role. According to that logic, it makes sense to invest heavily in systems for collecting and organizing competitive information. Another school of pundits contends that, since today's complex information often isn't precise anyway, it's not worth going overboard with such investments. In other words, it's not the accuracy and abundance of information that should matter most to top executives--rather, it's how that information is interpreted. After all, the role of senior managers isn't just to make decisions; it's to set direction and motivate others in the face of ambiguities and conflicting demands. Top executives must interpret information and communicate those interpretations--they must manage meaning more than they must manage information. So which of these competing views is the right one? Research conducted by academics Sutcliffe and Weber found that how accurate senior executives are about their competitive environments is indeed less important for strategy and corresponding organizational changes than the way in which they interpret information about their environments. Investments in shaping those interpretations, therefore, may create a more durable competitive advantage than investments in obtaining and organizing more information. And what kinds of interpretations are most closely linked with high performance? Their research suggests that high performers respond positively to opportunities, yet they aren't overconfident in their abilities to take advantage of those opportunities.     

Saving in Developing Countries: An Overview

This article reviews the current state of knowledge on the determinantsof saving rates, presenting the main findings and contributionsof the recently completed World Bank research project, ‘SavingAcross the World.’ The article discusses the basic designof the research project and its core database, the World SavingDatabase. It then summarizes the main project results and placesthem in the context of the literature on saving, identifyingthe key policy and nonpolicy determinants of private savingrates. Special attention is paid to the relationship betweengrowth and saving and the impact of specific policies on savingrates. The article concludes by introducing the studies includedin this special issue.     

Changing lifestyles and consumption patterns in developing countries: A scenario analysis for China and India

China and India are the world's largest developing economies and also two of the most populous countries. China, which now has more than 1.3 billion people, is expected to grow to more than 1.4 billion by 2050, and India with a population of 1 billion will overtake China to be the most populous country with about 1.6 billion population. These two countries are home to 37% of the world's population today. In addition, China and India have achieved notable success in their economic development characterised by a high rate of gross domestic product (GDP) growth in the last two decades. Together the two countries account already for almost a fifth of world GDP.The most direct and significant result of economic growth in India and China is the amazing improvement in quality of life (or at least spending power) for an increasing share of the population. The populations of both the countries have experienced a transition from ‘poverty’ to ‘adequate food and clothing’; today growing parts of the population are getting closer to ‘well to do lifestyles’. These segments of the society are not satisfied any more with enough food and clothes, but are also eager to obtain a quality life of high nutrient food, comfortable living, health care and other quality services.The theme of this paper is to analyse how the major drivers contributed to the environmental consequences in the past, and to take a forward look at the environmental impacts of these driving forces in China and India. The paper identifies population, affluence and technology to be the major driving forces in environmental pollution for these two countries then applies the simple equation of Impact=Population×Affluence×Technology, or I=PAT to evaluate the effects of changes in these drivers on CO₂ emissions.     

Discretionary monetary policy and the zero lower bound on nominal interest rates

Ignoring the existence of the zero lower bound on nominal interest rates one considerably understates the value of monetary commitment in New Keynesian models. A stochastic forward-looking model with an occasionally binding lower bound, calibrated to the U.S. economy, suggests that low values for the natural rate of interest lead to sizeable output losses and deflation under discretionary monetary policy. The fall in output and deflation are much larger than in the case with policy commitment and do not show up at all if the model abstracts from the existence of the lower bound. The welfare losses of discretionary policy increase even further when inflation is partly determined by lagged inflation in the Phillips curve. These results emerge because private sector expectations and the discretionary policy response to these expectations reinforce each other and cause the lower bound to be reached much earlier than under commitment.     

Meta-Functional Benefit Transfer for Wetland Valuation: Making the Most of Small Samples

This study applies functional Benefit Transfer via Meta-Regression Modeling to derive valuation estimates for wetlands in an actual policy setting of proposed groundwater transfers in Eastern Nevada. We illustrate how Bayesian estimation techniques can be used to overcome small sample problems notoriously present in Meta-functional Benefit Transfer. The highlights of our methodology are: (i) The hierarchical modeling of heteroskedasticity; (ii) The ability to incorporate additional information via refined priors; and (ii) The derivation of measures of model performance with the corresponding option of model-averaged Benefit Transfer predictions. Our results indicate that economic losses associated with the disappearance of these wetlands can be substantial and that primary valuation studies are warranted.      

Qualität im Journalismus – ein integratives Konzept

To determine the various performance criteria concerning journalism it is reasonable to develop a broad concept, which integrates the different theoretical approaches. In a functional and system-oriented perspective, fundamental performance criteria can be based on the social function and the specific code of journalism, which emerged in an historical process of mutual observation of journalists and audiences. In a normative-democratic perspective, performance criteria can be derived from societal and human values codified in diverse regulations. However, in this regard it has to be taken into account that specific claims of the political subsystem also play an important role. Finally from an audience and action oriented viewpoint, it is important to keep in mind that journalistic communication must be useful and applicable in the world the audience lives in.     

HOW IMPORTANT ARE ENDOGENOUS PEER EFFECTS IN GROUP LENDING? ESTIMATING A STATIC GAME OF INCOMPLETE INFORMATION

We quantify the importance of endogenous peer effects in group lending programs by estimating a static game of incomplete information. Endogenous peer effects describe how one's behavior is affected by the behavior of her peers. Using a rich dataset from a group lending program in India, our empirical analysis presents a robust finding of large peer effects. The preferred model suggests that the probability of a member making a full repayment would be 12 percentage points higher if all the fellow members were to make full repayment compared with a scenario in which none of the other members repay in full. We find that peer effects would be overestimated without controlling for unobserved group heterogeneity and that inconsistencies exist in the estimated effects of other variables without modeling peer effects and unobserved heterogeneity. Copyright © 2012 John Wiley & Sons, Ltd.