On optimal control of income generating activities, and the value of flexible production design

The paper provides a closed form solution for the value of a firm which costlessly can change its mode of operation between two activities. The technology is such that production is zero from the inactive production line. In addition we assume that the production potential on any production line is idle when not operated, else the production follows a geometric Brownian motion. Although this framework is rather general, it is motivated by the problem to produce a natural resource located in two separate wells/ores, using a single (flexible) production unit. For what seems to be reasonable parameter values, the flexible unit is seen to achieve a surprisingly large value relative to the value achievable by a comprehensive unit, producing both alternatives simultaneously. In addition it is interesting to note that switching might occur even if the active production line gives the highest immediate income.     

The effects of property and landowner characteristics on profit efficiency in salmon angling tourism in Norway

This paper analyzes how different property and landowner characteristics and other factors affect landowners’ profit efficiency from salmon angling tourism. The paper helps correct a lack of studies on the economic aspects of the triple bottom line approach to sustainability and suggests new areas of rural tourism research. A stochastic profit frontier function with an inefficiency module was estimated based on survey responses from 203 landowners along four Mid-Norway rivers. Profit efficiency decreased as the revenues from off-property and on-property activities increased relative to angling tourism. Factors increasing efficiency were long-term renting of fishing instead of permit sale or selling fishing packages with additional services and common property ownership instead of simple fee ownership. Cooperation, by merging several fishing rights into one unit rather than fishing on a single property basis, decreased efficiency. This study did not distinguish between different forms of cooperation; mandatory cooperation in the form of common property and voluntary cooperation between private properties are issues for further research. If sustainable economic efficiency is a public goal, policies should ensure a predictable economic environment for landowners specializing in salmon angling tourism and promote long-term renting, with a 10-year minimum period for the lease of fishing rights.     

One size fits all? Safety management regulation of ship accidents and personal injuries

Safety management regulation is an important supplement to market forces to establish a sufficient safety level in high-risk industries. The accident statistics in Norwegian maritime passenger transportation display a paradox: personal injuries have decreased while ship accidents have increased in the period during which safety management has been regulated (the International Safety Management Code was effectuated in the late 1990s). We interview regulators, shipping company management, and crewmembers about their practices and opinions regarding safety management regulation and use these data to explore how this regulation influences safety management practices to prevent different types of accidents. This study underlines earlier research showing that regulation serves to ‘raise the bar’ by heightening the industry levels of safety investments and organizational safety awareness. In addition, our results suggest that safety management regulation in maritime transportation is mostly effective for preventing personal injuries in cases in which the personal have sufficient time and resources available, and the procedures are consistent with seafarers’ professional values. For ship accidents, such as groundings, other causal factors come into play. We find that the negative consequences of regulation (proceduralization) in particular influence the performance of safety-critical tasks, such as navigation. This may explain why personal injuries have decreased while ship accident frequencies have continued to increase in spite of the regulations aimed at improving safety.     

Rhetoric and hegemony in consumptive wildlife tourism: polarizing sustainability discourses among angling tourism stakeholders

Nature-based tourism frequently results in controversies over access rights, but also over how resources should be managed and utilized. In this article, we explore disagreements on management strategies and angling practices, which followed in the wake of the gradual introduction of increasingly strict harvest regulations in salmon angling in the Orkla River of Norway. Different views on what represent the most severe threats to the salmon stock appeared in this case to originate in rather complex patterns with respect to the ways stakeholders related to and engaged with salmon, rivers and nature in general. The identification of incompatible goals and motives of various categories of stakeholders has for long been a dominant approach in research on these types of conflicts. In this contribution, we broaden the scope by exploring how such controversies involve competition for hegemony with respect to how management and angling practices should be discursively framed.     

Trust, coordination and knowledge flows in R&D projects: the case of fuel cell technologies

This paper explores influential factors for research and development project success as a result of knowledge flows rising from a trust-based mechanism within and outside the project. Project success is herein defined in terms of results obtained and partner commitment. A sample of 85 organizations involved in 17 European research and development projects under the fifth Framework Programme focused on fuel cell technology projects is used to test the hypotheses. Results provide several insights. First, organizations should take care of trust as the mechanism supporting internal knowledge flows arising from projects in which they are directly involved; second, external R&D ties arise from a kind of interlocking partner mechanism, but the latter does not contribute to the focal project success.     

Sensitivity to autocorrelation in judgmental time series forecasting

How well can people use autocorrelation information when making judgmental forecasts? In Experiment 1, participants forecast from 12 series in which the autocorrelation varied within subjects. The participants showed a sensitivity to the degree of autocorrelation. However, their forecasts indicated that they implicitly assumed positive autocorrelation in uncorrelated time series. Experiments 2 and 2a used a one-shot single-trial between-subjects design and obtained similar results. Experiment 3 investigated the way in which the between-trials context influenced forecasting. The results showed that forecasts are affected by the characteristics of previous series, as well as those of the series from which forecasts are to be made. Our findings can be accommodated within an adaptive approach. Forecasters base their initial expectations of series characteristics on their past experience and modify these expectations in a pseudo-Bayesian manner on the basis of their analysis of those characteristics in the series to be forecast.     

AMERICAN EXCHANGE OPTIONS AND A PUT-CALL TRANSFORMATION: A NOTE

This note presents the following two results. First, the finite-lived American option to exchange one asset for another is transformed into a finite-lived American call, for which a large set of excellent PC-based programmes is available. And second, the finite-lived American put is transformed into acorresponding call. Thus, it is unnecessary to develop and implement a separate numerical method for the American put.