Competitive strategy under uncertainty

Competitive strategy under uncertainty involves a trade-off between acting early and acting later after the uncertainty is resolved, and another trade-off between focusing resources on one scenario and spreading resources on several scenarios, thus maintaining flexibility. This paper analyzes both these trade-offs taking into consideration the nature of uncertainty, industry economics, intensity of competition, and the position of a firm relative to its competitors.     

Forecasting with Monetary Aggregates: Recent Evidence for the United States

We investigate the out-of-sample forecasting performance of various monetary aggregates in four-variate models of real output growth, inflation, changes in an interest rate, and nominal money growth from 1992 to 2004 using vector autoregressive (VAR) and regime-switching (RS) VAR models. We consider both Divisia and simple sum monetary aggregates for M1, M2M, M2, and M3 as well as sweep-adjusted M1 measures. We find little evidence that either aggregation method or level of aggregation has a big impact on the forecasting performance of our model with respect to inflation and real output growth. Our results indicate that VAR models with monetary aggregates appear to produce at best marginal improvements in RMSE over VAR models that omit money growth altogether. We also find that RS-VAR models usually provide better one quarter ahead forecasts than comparable VAR models, but often did worse when forecasting inflation four quarters ahead.     

Organizational Languages

This paper is concerned with communication within a team of players trying to coordinate in response to information dispersed among them. The problem is nontrivial because they cannot communicate all information instantaneously but have to send longer or shorter sequences of messages, using coarse codes. We focus on the design of these codes and show that members may gain compatibility advantages by using identical codes and that this can support the existence of several, more or less efficient, symmetric equilibria. Asymmetric equilibria may exist only if coordination across different sets of members is of sufficiently different importance. The results are consistent with the stylized fact that firms differ even within industries and that coordination between divisions is harder than coordination inside divisions.     

Die wahrscheinliche Le bensdauer und die Sterblichkeitsmessung

Im Gegensatz zur durchschnittlichen Lebensdauer hat die wahrscheinliche Lebensdauer in der Versicherungstechnik wohl kaum je eine wirkliche Anwendung gefunden. Der Grund hierfür dürfte hauptsächlich in der recht schwierigen mathematischen Definition dieser Masszahl zu such en sein. Während die durchschnittliche Lebensdauer bekantlich explicite definiert ist, so ist die wahrscheinliche Lebensdauer — wir werden sie mit t^tx bezeichnen — implicite durch die Gleichung definiert.     

Deutsche Privathochschulen — ein „emerging market“?

Zusammenfassung  Die Universit?t Witten/Herdecke stand kurz vor einer Insolvenz. Im Sog der Geschehnisse ist ihr Pr?sident Birger P. Priddat im Dezember 2008 von seinem Amt zurückgetreten. Er skizziert hier den Bildungsmarkt in Deutschland. Prof. Dr. Birger P. Priddat, 59, ist Inhaber des Lehrstuhls für Politische ?konomie an der Universit?t Witten/Herdecke und war dort bis vor kurzem Pr?sident.     

Foreign Institutional Investment,Ownership, and Liquidity: Real and Informational Frictions

The literature widely documents the negative liquidity impact of foreign participation in firms that permit high foreign institutional ownership. This paper employs a unique setting for the limited participation of qualified foreign institutional investors (QFIIs) in China's A-share market and examines how this impacts on stock liquidity in emerging markets. Contrary to the findings in the literature, foreign investor participation helps enhance the liquidity of affected stocks by promoting trade activities and price discovery. The improvement in liquidity does not occur through the information friction channel, but rather the real friction channel. Our results are robust to endogeneity issue and the possible influence of the global financial crisis, industry effects and the stock exchange. Further, the liquidity improving effects of QFII are even stronger when the analysis is performed on a subsample of QFII firms.     

Determinants of firm performance: The relative importance of economic and organizational factors

We decompose the inter-firm variance in profit rates into economic and organizational components. Using a representative model from each paradigm we find that both sets of factors are significant determinants of firm performance. Further findings are that the two effects are roughly independent and that organizational factors explain about twice as much variance in profit rates as economic factors.     

Über die Bedeutung von Alltagsauffassungen für das Wirtschaftsgeschehen

Economics has begun to analyse its actors in a new light. Behavioural economics analyses real motives, reasons, attitudes and belief structures, individual and shared mental models, emotions, etc. The everyday behaviour of actors is generally incompatible with rational choice behaviour. Economic theory responds to this disconnect with modified models of rationality, but we have to be aware that defining rationality is aimed more at a normative conception of elegant model-building than it is at trying to explain real behaviour. “Real actors” have models, patterns and interpretations of their own in their economic everyday lives. Thus, economic theory must begin to take into account actors operating according to rules and theories different from those of the general economic models.