Signs of dependence and heavy tails in non-life insurance data

In this paper, we study data from the yearly reports the four major Swedish non-life insurers have sent to the Swedish Financial Supervisory Authority (FSA). We aim at finding marginal distributions of, and dependence between, losses on the five largest lines of business (LoBs) in order to create models for solvency capital requirement (SCR) calculation. We try to use data in an optimal way by sensibly defining an accounting year loss in terms of actuarial liability predictions and by pooling observations from several companies when possible to decrease the uncertainty about the underlying distributions and their parameters. We find that dependence between LoBs is weaker in our data than what is assumed in the Solvency II standard formula. We also find dependence between companies that may affect financial stability and must be taken into account when estimating loss distribution parameters. Moreover, we discuss under what circumstances an insurer is better (or worse) off using an internal model for SCR calculation, instead of the standard formula.     

Political rents in a non-corrupt democracy

A fundamental problem in all political systems is that the people in power may extract rents to the detriment of the general public. In a democracy, electoral competition and information provided by the media may keep such rent extraction at bay. We develop a simple model where rents are decreasing in the degree of political competition and voter information. In line with our theoretical predictions, we find that both increased political competition and increased local media coverage substantially reduce direct measures of legal political rents among local governments in a non-corrupt democracy (Sweden).     

Criteria for contracting-out decisions when contractors can deceive

This paper presents a decision rule for contracting out that explicitly takes into account the possibility of contractor deception. In the model presented here, the contracting agency opts to contract out only when the production savings exceeds the sum of its optimal monitoring expenses, optimal fine collection costs, and the expected loss stemming from undetected cheating. Furthermore, in awarding contracts, the contracting agency explicitly takes into account the risk aversion of the contractor. The analysis suggests that effective contracts must consider the contractor's attitude toward risk and permit the contractor to retain some positive rent, conclusions that give rise to a number of nonintuitive policy implications.     

Dynamic and stochastic structures in tourism demand modeling

In this paper we consider a model for international tourism demand. The point of departure of the analysis is a utility function that is both dynamic and stochastic. In the model the stochastic component is interpreted as random changes in preferences for goods and services, while the dynamic component can be seen as either habit formation or as interdependent preferences. The resulting demand functions are estimated as a multivariate state space model, where the stochastic components enter the model as stochastic seasonal and trend components. An application is constructed for different segments of the Swedish tourism market. The results indicate the importance of including both dynamic and stochastic components in the utility function, and the importance of using disaggregate data to enable investigation of each market segment.I am grateful to two anonymous referees for useful comments. Much of the research was done while I was a visiting scholar at University of California Berkeley. The hospitality of the RIPM division is gratefully acknowledged. The research was supported by grants from the Wallander Foundation.First version received: January 2003/Final version received: February 2004     

固体废弃物战略性综合规划管理--持续性发展的重要一步

伴随着中国经济的飞速发展，固体废弃物的产生量也大幅增加。为了实现城市生活垃圾从目前单一的倾倒、收集方式转变为资源化综合利用体系，从而减少对环境的负面影响，固体废物规划管理者和政策决策者面临极大的挑战。     

Vertical Integration and Competition Policy

The European Commission has decided to implement a simplified procedure in the context of vertical integration. If the combined market shares of the merging firms is higher than 25% the Commission will investigate the merger thoroughly. Otherwise, the merger is considered harmless. The purpose of this study is to examine the welfare aspects of vertical integration in a simple model and investigate the accuracy of the proposed rule of thumb. Mergers turn out to be harmless from a social point of view when the upstream market is relatively less concentrated compared to the downstream market.     

Managing complex development projects: arenas, knowledge processes and time

The literature on project management has been dominated by techniques and methods for separating activities and making thought out plans. Closely related to this research stream is the research on product development, which seems to advocate somewhat of a different strategy where managing projects is a matter of enabling the crossing of functions and knowledge bases. This paper attempts to integrate these two lines of research.
The paper is based on two in–depth case studies of project management in product development contexts. The projects under study were highly complex and consisted of multiple interrelated parts, which called for 'tightly coupled' organizational solutions. From our point of view, much effort by the project management teams was put into establishing a project that was responsive and where participating local units were oriented toward various 'global' measures.
In our conception, the overall deadline seemed to have played an important role for promoting communal and interactive problem solving. Furthermore, the deadline emphasized the need for global arenas where the interactive problem solving could take place. It is argued that time–based controls set a global time for the project. The paper also demonstrates the importance of various global arenas, such as testing activities and project management forums, in order to keep track of time limits and to trigger global knowledge processes. Furthermore, based on the notion of 'separation' and 'coupling' of sub–systems and project phases, the paper suggests a model identifying four types of project organizations. The paper contributes to the knowledge on project management in complex product development.     

Action, reflection, and learning – coaching in order to enhance the performance of drug development project management teams

High-performing project teams are crucial for effective research and development (R&D). To become high performing, teams need to make use of their different skills and reflect upon their collective actions, thereby combining knowledge that could lead to value-adding activities for the company. This article describes the use of team coaching in supporting team reflection and learning in global R&D project teams. A collaborative research approach was used during the 8 months of coaching, with several inquiry methods being employed. The results indicate that coaching interventions have a positive effect on team performance, both from an efficiency perspective as well as from a creativity and climate perspective. Practical and theoretical implications are discussed, as is future research.     

Estimating the frequency of price re-optimization in Calvo-style models

This paper assesses the empirical performance Calvo style models of price re-optimization. We first show that versions of these models in which firms update non-re-optimized prices to lagged inflation account well for the statistical behavior of post-war U.S. inflation rates. We then investigate whether these models imply plausible degrees of inertia in price setting behavior by firms. They do, but only if we depart from two standard auxiliary assumptions: monopolistically competitive firms face a constant elasticity of demand, and capital is homogeneous and can be instantaneously reallocated after a shock. We develop a version of the model in which these assumptions are relaxed and show that it is consistent with the view that firms re-optimize prices, on average, once every two quarters.     

On the Determinants of Labour Market Institutions: Rent Seeking vs. Social Insurance

What determines the structure of labour market institutions? I argue that common explanations based on rent seeking are incomplete. Unions, job protection and egalitarian pay structures may have as much to do with social insurance of otherwise uninsurable risks as with rent seeking. In support of this more benign complementary hypothesis the paper presents a range of historical, theoretical and cross‐country evidence. The social insurance perspective changes substantially the positive analysis of the future of European labour market institutions. It is not clear that globalization and the ‘new economy’ will force countries to make their labour markets more flexible. These phenomena will probably increase the efficiency costs of existing institutions, but they may also make voters more willing to pay a high premium to preserve institutions that provide insurance.