Policy capturing in small‐group decision making: Using linear programming to assign factor weights for the NCAA Selection Committee's ranking decisions in the 2016 through 2018 men's basketball tournaments

We present a general approach for applying policy capturing to small‐group decision making and demonstrate the approach with the NCAA Selection Committee's rankings of the 68 teams in the three most recent Division I Men's Basketball Tournaments. We develop a linear programming model that minimizes the extent to which the evaluation of a lower‐ranked team exceeds that of a team ranked immediately above it. The result is a set of linear weights that approximates a group decision when the decision itself is demonstrably internally inconsistent in that a group ranks some teams higher than others despite a lower implied evaluation.     

Data Fixation and the Use of Traditional Versus Activity-Based Costing Systems

An important debate in the contemporary accounting literature relates to the relative merits of activity-based versus volume-based product costing methodologies. Traditional volume-based costing systems are said to be flawed and may seriously mislead strategic decision making. Such arguments assume that decision makers use such information in an unproblematic way. This article reports on an experiment designed to investigate whether decision makers are able to overcome data fixation in a setting involving the use of product cost information. In response to criticisms of previous accounting studies of data fixation, subjects received some feedback after each decision, and were rewarded based on performance. The experiment involved subjects making a series of production output decisions based on detailed case information of a hypothetical firm facing different market conditions for each decision. A between-subjects design was utilized with two cost system treatments: activity-based costing (ABC) and traditional costing (TC). It was hypothesized that the group provided with ABC cost data would make 'optimal' decisions and the group provided with TC cost data would overcome fixation. The results of the experiment indicated that there was, in general, evidence of data fixation among TC subjects, but a small number of subjects did adjust to ABC costs. These results are discussed in the light of previous research and some future directions are outlined.     

Rates of Return to Schooling in China

This study uses data from a 1988 survey of Chinese individuals to estimate rates of return to schooling in China. The Mincer-type rate of return to schooling was estimated at 4.02 percent in the rural areas and 3.29 percent in the urban areas; these are fairly low estimates compared with similar estimates in other countries. The rate of return to schooling for females was significantly higher than that for males in urban areas. In addition, members of the Communist Party in urban areas had significantly lower returns to schooling compared with non-members.     

On the manager as principal clerk

Until recently, economic theory and economists treated the management process with benign neglect. Insofar as business enterprises — the firms of economic theory – require managers to oversee their daily operations, these managers are implicitly viewed as fungible ‘principal clerks’. This paper makes this view explicit and considers whether it is valid for a particular class of manager, that of a major league baseball team.     

Why managers divest—Evidence from New Zealand's largest companies

Chief Executives from New Zealand's largest companies were surveyed to distinguish divesting and nondivesting companies, and to identify the relative importance of the factors and motives which led to the divestment of 208 business units in the period 1985 through 1990. The divesting companies were considerably larger and faster growing than nondivestors. The typical divestment was motivated by the need to convert unattractive assets into liquid form which could then be held to strengthen the balance sheet, or reinvested in either the core business or new areas.     

On the adequacy of single‐stock futures margining requirements

Unlike the traditional futures contract risk‐based approach to margining, new security futures contracts are margined under a strategy‐based margining system similar to that which applies in the equity options markets. As a result, these new margin requirements are potentially much less sensitive to changes in market conditions. This article performs a simulation to evaluate whether these alternative margining methodologies can be expected to produce comparable outcomes. The analysis suggests that a 1‐day settlement period will likely lead to collection of customer margins that are virtually always greater than that which its traditional risk‐based counterpart would require. A 4‐day settlement period would lead to margin requirements that both significantly under‐ and overmargin relative to a comparable risk‐based system. This study argues that exchanges may approach the preferred probability of customer exhaustion by managing margin settlement intervals. Thus, the new strategy‐based rules, in and of themselves, will not necessarily inhibit new security futures trading activity. © 2003 Wiley Periodicals, Inc. Jrl Fut Mark 23:989–1002, 2003     

Membership size in the educable cooperative facing uncertain demand

This article explicitly incorporates layoff and hiring costs into a discretetime dynamic model with stationary demand uncertainty, in which managers in a cooperative learn something about the demand process over time, and anticipate learning something about that process. It is shown how the opportunity to learn affects initial membership size and how the knowledge gained induces changes in membership, as well as how risk preferences impact on membership size at any point in time.     

Environmental Kuznets Curve: Conclusive Econometric Evidence for CO2

This paper begins with a statistical formulation of the Environmental Kuznets Curve (EKC) and discusses the major econometric problems raised in the literature in testing this hypothesis using panel data. A simple t‐test is then presented that avoids these econometric problems. The result from applying the t‐test confirms conclusively the EKC for CO₂ as formulated.