On the quest for supply chain transparency through Blockchain: Lessons learned from two serialized data projects

The ability to look into the supply chain has long enticed SCM scholars and practitioners. The possibilities created by such visibility are endless—from risk reduction and continuity planning to inventory management and cost reduction, nothing is off the table when end‐to‐end visibility is a possibility. Because of such enticements, there is usually much buzz in the industry every time a new technology that promises visibility and transparency is brought forward. Yet, years later, stories sometimes emerge that said technologies either failed to deliver or were not everything they were made out to be. Blockchain is yet another emerging technology in this space. Some consultants promise that it will be the final answer to the transparency and visibility woes that companies currently face. Yet, there is little empirical investigation regarding how the technology may benefit adopters, what the bottlenecks may be, and to what extent it may be able to deliver on these promises, without massive system‐wide upgrades of extant hardware and computing prowess. The current study takes a step in this direction by investigating a blockchain‐driven proof of concept across an industry consortium to identify promises, possibilities, and challenges of blockchain.     

OPTIMAL FORECAST COMBINATION UNDER REGIME SWITCHING*

This article proposes a new forecast combination method that lets the combination weights be driven by regime switching in a latent state variable. An empirical application that combines forecasts from survey data and time series models finds that the proposed regime switching combination scheme performs well for a variety of macroeconomic variables. Monte Carlo simulations shed light on the type of data‐generating processes for which the proposed combination method can be expected to perform better than a range of alternative combination schemes. Finally, we show how time variations in the combination weights arise when the target variable and the predictors share a common factor structure driven by a hidden Markov process.     

Applying Burke’s Dramatic Pentad to scenarios

Describing the evolution of possible futures in the narrative form is widely practised. However, while stories are intuitively recognized, the ability to compose a comprehensible story is often difficult. Ambiguities or inconsistencies within a scenario-as-story are not simply aesthetic faults, but are failings which can weaken the use of the technique in a learning or decision-making process. This paper provides a working understanding of narrative as a particular kind of knowledge and proposes an adaptation of Kenneth Burke’s Dramatic Pentad as a way to explicitly capture this kind of knowledge within a scenario construction process.     

Price determinants of bred heifers: Do reputations matter?

Replacement brood cows are among the most significant investments for cow-calf operations, thus crucial to profitability. Many cow-calf producers find it cost effective to purchase replacements from a reliable replacement heifer seller, though by doing so they increase risk of reproductive inefficiency due to unknown characteristics of the heifers. When important information about a product is missing to buyers, a seller can build a reputation over time that acts as signal for quality. Previous work has explored reputation effects in feeder cattle markets, but to our knowledge we are the first to explore reputation effects in bred replacement cattle markets. Using data from an annual replacement heifer sale, we analyze the values of heifer characteristics and test for premiums from reputation development. After controlling for reproductive practices, breed, and other characteristics, we find reputation does not play the role that Shapiro theorized. In this sale, the lot order is strategically chosen and may indicate bred heifer quality to buyers, replacing the need for reputation as a signal. This study highlights the importance of quality signals and regional preferences in bred replacement cattle marketing and lays the empirical groundwork for future studies to test Shapiro's theory.     

The evolution of morality and the end of economic man

1871 saw the publication of two major treatises in economics, with self-seeking economic man at their center. In the same year Darwin published The Descent of Man, which emphasized sympathy and cooperation as well as self-interest, and contained a powerful argument that morality has evolved in humans by natural selection. Essentially this stance is supported by modern research. This paper considers the nature of morality and how it has evolved. It reconciles Darwin’s notion that a developed morality requires language and deliberation (and is thus unique to humans), with his other view that moral feelings have a long-evolved and biologically-inherited basis. The social role of morality and its difference with altruism is illustrated by an agent-based simulation. The fact that humans combine both moral and selfish dispositions has major implications for the social sciences and obliges us to abandon the pre-eminent notion of selfish economic man. Economic policy must take account of our moral nature.     

Examining bank SEOs: Are offers made by undercapitalized banks different?

Despite extensive monitoring, banking operations are often considered opaque, and despite explicit capital adequacy regulation, banks may have substantial discretion in their financing. Both monitoring and capital regulation have changed substantially over time, with the adoption of FDICIA being one important breakpoint. This article empirically studies seasoned equity offerings (SEOs) by banks to understand how opacity and capital regulation interact to determine the timing of bank SEOs and their market valuation. SEOs both by banks that are undercapitalized relative to regulatory standards and also well-capitalized banks are fully discretionary when it comes to SEOs, even before FDICIA. Both undercapitalized and well-capitalized banks experience similar and significantly negative stock price reactions to SEO announcements, and also have similar prior patterns of insider trading and similar economic drivers of the issuance decision. Moreover, post-SEO abnormal stock returns are similar to benchmark returns for both types of issuers in the long run, suggesting that, contrary to the well-documented evidence for industrial SEOs, investors understand the value implications of bank SEOs upon announcement. The evidence implies that undercapitalized banks' SEOs are more discretionary and that all bank SEOs are less opaque than implied by earlier studies.