Head-heart disparity among future managers: Implications for ethical conduct

An examination of the ethical perceptions of business students using Macobby's head/heart traits and a comparison to earlier studies of managers, accountants, and business students is made. The data were collected at three universities that are similar in size, enrollment and degree programs within the College of Business. Results indicate that present day business students are no less ethically inclined than are their business counterparts in previous eras. In general head traits dominated over heart traits, an indication that business schools continued to do a good job emphasizing and developing analytical skills but a poor job of developing the qualities of the heart that are generally associated with ethical behavior. The implications of these findings are discussed.     

The evolution of a local R&D strategy: the experience of a service in the UK National Health Service (NHS)

Increasing concern about the state of health‐related research in the UK in the 80s and early 90s, led to an influential parliamentary review. The consequence of this was to strengthen health research through a programme that was fully integrated into the management structure of the NHS. No country had ever attempted such an ambitious approach ( Black, 1997 ). In 1994 a far‐reaching review, recommended further, revolutionary changes to the management of R&D in the UK National Health Service ( Culyer, 1994 ). Many of these were implemented in 1997 with the result that every UK health service at regional and local level has developed an infrastructure, and management arrangements for R&D activity. In most local areas, hospitals with significant involvement in R&D have been eligible to bid to the UK Department of Health for NHS R&D Support funds. In Nottingham, three Hospital Trusts and a community based service made bids to the Department of Health and received grants to support R&D. This paper focuses on one of the hospital Trusts ‐ the mental health service in Nottingham. Our experience will be of particular interest as the first bid that the mental health service made was spectacularly unsuccessful. The organisation was forced to consider dis‐investment in its existing research infrastructure and a potential negative impact on the provision of patient care. This led to a wide‐ranging consultation and evaluation of research and research‐related activity. A range of approaches and tools were deployed to develop the strategy and to ensure its successful implementation and evolution. The strategy reflected a balanced approach, taking into account historical and organisational research strengths, while recognising the need to build capacity and capability, enhance foresight capability and strengthen the knowledge base. The ability to contribute to, and influence policy and practice has been a key driver of the strategy. The result was a successful bid and the evolution of an R&D strategy that has been flexible in its response to policy changes, changing local circumstances and wider socio‐economic trends and technical innovations. Furthermore, R&D performance, measured through outputs, impacts and income, has continually improved and increased.     

THE SQUARED ORNSTEIN-UHLENBECK MARKET

We study a complete market containing J assets, each asset contributing to the production of a single commodity at a rate that is a solution to the squared Ornstein-Uhlenbeck (Cox-Ingersoll-Ross) SDE. The assets are owned by K agents with CRRA utility functions, who follow feasible consumption/investment regimes so as to maximize their expected time-additive utility from consumption. We compute the equilibrium for this economy and determine the state-price density process from market clearing. Reducing to a single (representative) agent, and exploiting the relation between the squared-OU and squared-Bessel SDEs, we obtain closed-form expressions for the values of bonds, assets, and options on the total asset value. Typical model parameters are estimated by fitting bond price data, and we use these parameters to price the assets and options numerically. Implications for the total asset price itself as a diffusion are discussed. We also estimate implied volatility surfaces for options and bond yields.     

Does Hedging Affect Firm Value? Evidence from the US Airline Industry

Does hedging add value to the firm, and if so, is the source of the added value consistent with hedging theory? We investigate jet fuel hedging behavior of firms in the US airline industry during 1992–2003 to examine whether such hedging is a source of value for these companies. We illustrate that the investment and financing climate in the airline industry conforms well to the theoretical framework of Froot, Scharfstein, and Stein (1993). In general, airline industry investment opportunities correlate positively with jet fuel costs, while higher fuel costs are consistent with lower cash flow. Given that jet fuel costs are hedgeable, airlines with a desire for expansion may find value in hedging future purchases of jet fuel. Our results show that jet fuel hedging is positively related to airline firm value. The coefficients on the hedging variables in our regression analysis suggest that the “hedging premium” is greater than the 5% documented in Allayannis and Weston (2001), and might be as large as 10%. We find that the positive relation between hedging and value increases in capital investment, and that most of the hedging premium is attributable to the interaction of hedging with investment. This result is consistent with the assertion that the principal benefit of jet fuel hedging by airlines comes from reduction of underinvestment costs.     

Body support testing and rating

The REF, C, and score are a means to give quantitative values for product performance. Other product variables defined as humidity control factor, shear control factor, differential temperature control factor, product life factor, and cost factor were not addressed as part of this study. Additional variables include delivery, maintenance, and warranties. These components can be added to the score in some weighted manner as they become clinically founded. Interface pressures and shears were not measured for beds that are gatched. Each product tested will have characteristics pertinent to its own design that must be addressed to minimize sacral and coccyx skin breakdown when subjects are in this posture because some pneumatic pads bottom out to give excessive sacral and coccyx pressure while others wrinkle when used in this position. This is of major concern when one considers that the coccyx is more susceptible to pressure than any other bony prominence. There may be some aversion to labeling support product performance because it will allow the purchaser to know what is being bought. This initial study indicates the feasibility of quantitating what all patients require: a valid interface support surface for each specific need. The user can be adequately informed before the purchase as to a product's merits without being influenced by the results of inadequate testing, referrals, or sales media influences. Although cushions, shoes, or other prosthetic/orthotic devices were not part of this study, it is appropriate to rate all these devices in a similar manner by simply comparing pressure relief attained to that desired, expressing the result as a percentage of the worst case, and then labeling the product accordingly. Those subjects with sensation can rate comfort as part of the overall score. For cushions, ischial tuberosity pressure relief can be expressed as a percentage of the maximum attainable relief. Metatarsal head relief during gait as well as during static testing can be measured, and claims can be made for shoes and sneakers. Where impact loads and shear forces are paramount, the score must comprise appropriate parameters. Similarly, amputee distal stump relief as a percentage of worst case could be specified by the fitter. Iliac crest relief as a percentage of worst case can also be specified by the fitter. In all instances the score is not a subjective rating but one that can be measured correctly. All body support products can be given an REF, C value, and score as well as other qualifying values where appropriate instrumentation and sufficient subject sampling is used.     

Social learning with private and common values

Summary. We consider an environment where individuals sequentially choose among several actions. The payoff to an individual depends on her action choice, the state of the world, and an idiosyncratic, privately observed preference shock. Under weak conditions, as the number of individuals increases, the sequence of choices always reveals the state of the world. This contrasts with the familiar result for pure common-value environments where the state is never learned, resulting in herds or informational cascades. The medium run dynamics to convergence can be very complex and non-monotone: posterior beliefs may be concentrated on a wrong state for a long time, shifting suddenly to the correct state.Received: 6 January 2005, Revised: 5 May 2005, JEL Classification Numbers: C72, D82.Jacob K. Goeree: Correspondence toFinancial support from the National Science Foundation NSF (SBR-0098400 and SES-0079301) and the Alfred P. Sloan Foundation is gratefully acknowledged. We thank Richard McKelvey posthumously for insights and conjectures about information aggregation that helped shape our thinking about the problem. We also acknowledge helpful comments from Kim Border, Tilman Börgers, Bogachen Celen, Luis Corchon, Matthew Jackson and seminar participants at University College London, the University of Arizona, Universitat Autonoma de Barcelona, the California Institute of Technology, the 2003 annual meeting of ESA in Pittsburgh, the 2003 Malaga Workshop on Social Choice and Welfare Economics, the 2003 SAET meetings in Rhodos, and the 2003 ESSET meetings in Gerzensee.     

Resurrecting Lochner: A Defense of Unprincipled Judicial Activism

Lochner v. New York, 198 U.S. 45 (1905), stands as one of theSupreme Court's most reviled decisions. We challenge the criticalconsensus against Lochner and provide a defense, albeit a contingentdefense, of "unprincipled" judicial activism. To do so, we developa game-theoretic model of judicial–legislative interaction.We use the model to compare outcomes generated in a system oflegislative supremacy to outcomes generated in a system in whichjudicial review is provided by a legally unprincipled, activistjudiciary. We show that judicial review, even when providedby an activist, politicized judiciary, can promote importantconstitutional values and improve legislative quality relativeto a deferential judiciary. In doing so, we identify an important"passive" component to the effect that judicial review has onlegislatures and on legislation. Finally, we demonstrate thatthe addition of other institutions and constraints on judicialbehavior amplify the beneficial effects that judicial reviewprovides to the legislative process.     

AIDS and African Development

Because AIDS affects primarily the most productive age groupand is fatal and widespread, it will have a larger impact onAfrican development than other more common diseases. Infectionrates are higher in urban than in rural areas, and studies suggestthat they are highest among urban high-income, skilled men andtheir partners. Macroeconomic models show that the greater theinfection rate among educated workers and the greater the propensityto finance medical care out of savings, the more detrimentalis the impact of AIDS on the growth of per capita income. Regardlessof the macroeconomic effect, most households and businessesdirectly affected by AIDS will be economically worse off, atleast in the short run. It is not clear, however, what effectAIDS will have on poverty in Sub-Saharan Africa or on incomeinequality. Governments need to assess the potential economicimpact of AIDS, implement cost-effective programs to mitigatethe impact, and target prevention programs to the economic sectorsmost sensitive to HIV infection.      

The future of health futures : Another perspective

A good ‘market’ for health futures and easy access to relevant information are among the reasons that health futures is currently centred in the wealthy nations. Interest in health futures is growing in the less developed countries, however, in part because of efforts by WHO and its regional office. Many benefits can be expected if the field becomes more international, including an influx of fresh ideas about health futures study designs and about innovative approaches to health care. A shift to a more global orientation is also imperative simply because health futures deals with the well-being of human beings, and most human beings live in the less developed countries of the world.