Positive versus negative incentives for loan repayment in microfinance: A game theory approach

In most of the methodologies used so far by microfinance institutions, negative incentives are predominant, which can contrast with these institutions’ social mission. This paper investigates whether the microfinance industry could benefit from using more positive incentives. The main results of our game model are twofold. First, (positive or negative) incentives increase “on‐time” repayments. Second, the client is more likely to repay her loan with the encouragement of a bonus scheme rather than under the pressure of a sanction, regardless of the amount. This paper therefore argues for the increased use of positive incentives in the industry.     

The brief history of game theory and the dissemination in China

After the year of 1944, Von Neumann and Morgenstem published the book ＂Theory of Games and Economic Behavior＂, the game theory had gradually become an emerging discipline. At present, game theory has already penetrated to every industry and widespread application in economy, politics and military and so on. The paper introduces the history and the developed situation of game theory about the foreign and domestic state.     

银行与企业信用贷款博弈分析

本文以企业和银行的不完全信息动态博弈为基础，针对信用贷款过程以及当事人的策略和行动，重点分析了贷款和还款两个阶段的银行和企业的博弈策略。在对贷款过程进行一定的约简假设基础上，构建信贷博弈模型并对其进行求解，得出不同条件下企业和银行的最优策略选择。本文在计算银行和借款企业的支付成本时突出考虑了机会成本，摒弃了其它模型中的模糊数据成分，使得模型能够得到更为直观的结果。     

A game theory model of regulatory response to insider trading

We develop a model which can help in explaining the evolving regulatory regime around insider trading. We form a simple sequential game-theoretical model of insider trading transactions and, utilizing Monte Carlo simulation to determine equilibrium, we show that costly investigations and low penalties incentivize traders to engage in illegal transactions. While the model helps to explain stiffer action by regulatory bodies, the question remains as to whether the elevated penalty levels are sufficient to prevent further insider trading.     

A dynamic game for fiscal federalism with non-local externalities

We address the questions of the patterns and the efficiency of public intervention in a dynamic game model between public agencies in charge of a non-local externality. We give two examples: pollution spreading between water basins (negative externality), and non-uniform contributions from the elite and from the mass to a cultural background (positive externality). We define two extreme cases, depending on whether or not the receiving end of the externality balances the transmitting end. When both balance, the reactivity of the agency structure is strong and the need for redistribution between them is weak. When they do not balance, the externality is more markedly non-local and redistribution is required to balance the fiscal burden (or product) from pigouvian instruments among all beneficiaries. We show that, with a static rule of redistribution that allows them to compute transfers between them as a function of their own strategies, the decentralized agencies' reactivity is somewhat slowed, but they still react faster and more efficiently than a static central agency.     

Testing static game theory with dynamic experiments: A case study of public goods

Game theory provides predictions of behavior in many one-shot games. On the other hand, most experimenters usually play repeated games with subjects, to provide experience. To avoid subjects rationally employing strategies that are appropriate for the repeated game, experimenters typically employ a “random strangers” design in which subjects are randomly paired with others in the session. There is some chance that subjects will meet in multiple rounds, but it is claimed that this chance is so small that subjects will behave as if they are in a one-shot environment. We present evidence from public goods experiments that this claim is not always true.     

A dynamic semester-long social dilemma game for economic and interdisciplinary courses

The authors present a semester-long game to teach the role of economics in natural resources management. The game is framed within a fisheries context: multiple student fisheries harvest fish to maximize yield/profit, which is measured using a piecewise linear function. There are prizes for both the student and the group with the highest semester-long catch, which brings forth the social dilemma associated with dynamic stock externalities in fisheries. The game can be played in large classes, is robust to student attrition, and requires 5–10?minutes per class period. Given its features, it can be used to teach behavioral economic principles in resource management, incentives versus command-and-control regulations, role of cheap talk, social preferences, punishment, and community management as well as solutions such as aquaculture.     

A technology opportunities analysis model: applied to dye-sensitised solar cells for China

Technology opportunities analysis (TOA) can support policy-makers or managers in making strategic technical decisions so as to enhance their technological innovation capability and international competitiveness. This paper presents a multi-level framework to support and systematically identify technological opportunities. Patent data as a key component of technology innovation are used to enable TOA within the framework in the present research. At the research and development (R&D) level, we anticipate the directions of technology development based on technology morphology. Countries’ development emphases can also be investigated in order to help identify their R&D strengths and weaknesses and to seek promising development pathways. At the level of competition, we devise the assignee-technology analysis to obtain insight into competitive participants’ technical emphases and intents. It is also used to explore possible collaboration opportunities among them. At the market level, we apply patent family analysis to understand countries’ target markets and to assess prospects for the commercialisation of their technology. We pursue TOA to explore China's opportunities and challenges in dye-sensitised solar cells. The empirical case analysis supports the effectiveness of the TOA model. We believe it can be adapted well to fit other emerging technologies.     

Competition vs. collaboration in the generation and adoption of a sequence of new technologies: a game theory approach

The study provides a game theoretic exploration of firms’ decisions on whether to compete or collaborate in the generation and adoption of a sequence of new technologies. Different from models proposed by previous studies, which concentrates on process innovation and a two-strategy set (innovation or do nothing), the present game theory model emphasises product innovation and a three-strategy set (innovation, collaboration, or do nothing). The study makes three contributions. The proposed game theory model extends current understanding of the impacts of collaboration possibilities and collaboration cost in a dynamic game theory. Further, the model clarifies the impact of transaction costs on the outcome. Finally, the study finds that the relationship between collaboration costs is not univariate, but depends on the market type and various market characteristics, such as technology gap, technology level, the product substitution index, transaction costs, and the discount rate of price sensitiveness.     

Patent text mining and informetric-based patent technology morphological analysis: an empirical study

Patent technology morphological analysis utilises the advantages of both patent information analysis and morphological analysis to provide more detailed information on current and future patent technology. Current patent technology morphological analysis methods are largely reliant on manual expertise in the construction of morphological boxes with few approaches to the evaluation of future morphological configurations. We developed a patent text mining and informetric-based patent technology morphological analysis technique. We defined the basic parameters of the morphological box as the factors in factor analysis, with a patent keywords matrix, and the clusters in clustering analysis with factor scores. Patent citation, year of patent registration, keyword frequency, and contributing factors were used to evaluate future morphological configurations. We used an empirical study of liquid crystal display wide viewing angle patents to validate our method. The Thomson Reuters Derwent Innovation Index was used to collect patent text datasets. Our study indicates that this method is feasible for the implementation of patent technology morphological analysis. Our method provides advantages in terms of cost and time reductions during morphological box construction and more flexible methods for evaluating morphological configurations. We discuss problems and possible development of our method in the last section.     

Transboundary air pollution and soil acidification: A dynamic analysis of an acid rain game between Finland and the USSR

Transboundary air pollution is analysed as a dynamic game between Finland and the nearby areas of the Soviet Union. Sulphur emissions are used as the environmental control variables and the acidities of the soils as the state variables. Acidification is consequently considered to be a stock pollutant having long-lasting harmful effects on the environment. The state dynamics consist of two relationships: first, of a sulphur transportation model between the regions and, second, of a model describing how the quality of the soil is affected by sulphur deposition. The countries are assumed to be interested in maximizing the net benefits from pollution control as measured by the impacts on the values of forest growth net of the abatement costs. Cooperative and noncooperative solutions of the game are compared to assess the benefits of bilateral cooperation. Using empirical estimates of abatement costs, acidification dynamics and impacts on forest growth it is shown that cooperation is beneficial to Finland but not to the Soviet Union. Consequently, Finland has to offer monetary compensation to induce her neighbor to invest in environmental protection.     

Corruption governance and its dynamic stability based on a three-party evolutionary game with the government,the public,and public officials

The current state of corruption in China is still worrisome. Corruption among public officials depends not only on their subjective will, but also on the success rate of government investigations and public whistleblowing. Based on the evolutionary game theory, this study constructs an evolutionary game model with the government, the people, and public officials and solves the dynamic model. The authors also provide a numerical simulation of the proposed model to confirm theoretical predictions. The results reveal that when the government’s success rate reaches a certain threshold, public officials will trend to a strategy of no bribery, and at this threshold, raising the cost of bribing public officials can quickly prevent them from corruption. At the equilibrium, the public will trend toward a strategy of no whistleblowing. The findings of this study are of great significance to the current anti-corruption debate in China.     

Monitoring trends of technological changes based on the dynamic patent lattice: A modified formal concept analysis approach

The strategic importance of monitoring technological changes is highlighted given the ever faster pace and increasing complexity of technological innovation. In this respect, patent citation analysis has been the most frequently adopted tool among others. However, patent citation analysis is subject to certain drawbacks that stem from only consideration of citing-cited information and time lags between citing and cited patents. This study proposes a formal concept analysis (FCA)-based approach to developing a dynamic patent lattice that can analyze complex relations among patents and monitor trends of technological changes. The FCA is a mathematical tool for grouping objects with shared properties based on the lattice theory. The distinct strengths of FCA, vis-á-vis other methods, lie in structuring and displaying the relations among objects from a massive amount of data. For the purpose of technology monitoring, the FCA is modified to take into account time periods and changes of patent keywords. A patent context is first constructed with the aid of domain experts and text mining technique. Two types of dynamic patent lattices are then developed by executing the modified FCA algorithm. A case study of laser technology in lithography for semiconductor manufacturing shows that the suggested dynamic patent lattice has considerable advantages over conventional patent citation maps in terms of visualization and informative power.     

A framework for modelling economy-environment-development relationships based on dynamic carrying capacity and sustainable development feedback

A large literature exists that deals with economic issues of development and growth. It includes various approaches that can be classified as formal-theoretical, empirical-statistical and qualitative-verbal. Recently, the issue of sustainable development has been discussed much, which has given rise to some novel views on the relationship between development and environment. Most of these contributions utilize a more or less qualitative approach. A comprehensive inquiry of the relationship between economy, development, growth and environment may include an analytical approach as well. An analytical framework is proposed here for studies of environment-economy-development relationships that separates between economy, development, environment, and value system. A distinction is made between direct and indirect economy-environment interactions. To overcome disadvantages of assumptions of determinism in long term analysis a sustainable development feedback mechanism is proposed. It reflects anticipative behaviour to natural environmental changes in making long term decisions. This can be seen as a specific element of endogenous growth, namely one based on environmental factors. To illustrate the ideas a number of theoretical models are discussed that can be regarded as dynamic formal extensions of the concept of carrying capacity. Different cases include combinations of internal and external feedback mechanisms to an economy. The results demonstrate that in addition to behaviourial patterns that have been obtained by more complex studies other patterns may emerge.This study was supported by the Economic Research Foundation (Ecozoek), which resorts under the Netherlands Organization for Scientific Research (N.W.O.), project no. 450-230-007.This paper is based on reprocessed material from my Ph.D. dissertation. I am grateful to my thesis supervisors Peter Nijkamp and Hans Opschoor for comments at various stages in the research.     

International diffusion of embodied and disembodied technology: A network analysis approach

This study proposes a quantitative method for investigating the structure of international technology diffusion. By using network analysis, this study defines the structural configuration of each country within the international diffusion network by measuring its degree, closeness, and betweenness centralities. In addition, this study distinguishes between embodied technology diffusion, measured by multilateral trade, and disembodied technology diffusion, measured by patent citations, in individual countries. This study empirically tests a sample data set of international technology diffusion taken from 48 countries. The empirical results show that the structural configuration of countries exhibits similar patterns in both embodied and disembodied diffusion networks. Significant global stratification patterns exist in the capability of national international technology exportation and brokerage advantages. Moreover, this study distinguishes four blocks of countries that play different roles in international technology diffusion: the leading countries provide a source of technological knowledge; an intermediate group diffuses the knowledge acquired from the source; a third group is in the process of initiating the export of technological knowledge; and a final group of countries absorbs technological knowledge without reciprocal exportation. Finally, this study identifies two types of catch-up strategies that newly industrialized or developing countries can use to move up the international technology stratification.     

How technology policy facilitates technology diffusion and improves firm capability: a dynamic survey from a network perspective

Strategic alliances have been regarded as a potent tool of technology policy for the advancement of research and development (R&D) in developing countries. However, the effectiveness of this ‘visible hand’ has not been dynamically understood as a useful means of building up firm capability. To see how strategic alliances help small-sized firms improve their competitive advantage, this research investigates a government-supported strategic alliance for technology development. Using a two-stage model from the network perspective and methodology, the results show that via a government-sponsored strategic alliance, the network factors embedded in the alliance significantly help the firm develop a competitive advantage by facilitating technology diffusion among alliance members and improved firm-level technology capability. Thus, technology policy in the form of strategic alliances appears to serve as a ‘visible hand’ that homogenously upgrades firm technology capability and diffuses technology.     

Real estate markets and the macroeconomy: A dynamic coherence framework

This paper analyzes the dynamic interactions between real estate markets, in the US and the UK and their macroeconomic environments. We apply a new approach based on a dynamic coherence function (DCF) to study these interactions bringing together different real estate markets (the securitized market, the commercial market and the residential market). The results suggest that there is a common trend that drives the different real estate markets in the UK and the US, particularly in the long run, since they have a similar shape of the DCF. We also find that, in the US, wealth and housing expenditure channels are very conductive during real estate crises. However, in the UK, only the wealth effect is significant as a transmission channel during real estate market downturns. In addition, real estate markets in the UK and the US react differently to institutional shocks. This brings some insights on the conduct of monetary policy in order to avoid disturbances in real estate markets.     

Systemic risk contagion in FX market: A frequency connectedness and network analysis

In this study, we analyse systemic risk contagion between a set of most actively traded currencies (EURO, JPY, GBP, AUD, CAD and CHF) by application of VAR based frequency connectedness proposed by Baruník and K?ehlík. By using this novel approach, we gauge foreign exchange (FX) market connectedness in 200‐day frequency band using spectral representation of variance decompositions of VAR and identify directional spillovers between the most actively traded foreign exchange rates. Dynamics of the overall spillover index reveals that the index capture well‐known financial stress incidents properly. Finally, network topology of directional spillovers between currency pairs is provided for visulalization interconnectedness between them.     

Collaboration for innovation and project failure. A dynamic analysis

The aim of this paper is to investigate the hypothesis that there is a complex and bidirectional relation between collaboration and failure in innovation projects. On the one hand, collaboration in innovative activities may increase the likelihood of project failure. At the same time, the failure in innovation projects may induce the firm to collaborate in order to overcome the problems that determined the failure of innovation projects (induced collaboration). Up to now, we are not aware about the existence of any empirical paper analysing the interaction between these two mechanisms. This paper aims at filling this gap by providing a motivation for the induced collaboration and testing its empirical relevance in a dynamic framework. The empirical analysis is carried out by using two consecutive German Community Innovation Surveys referring to the period 2006–2010. The empirical results support the hypothesis of a bidirectional causal relationship between collaboration and failure.     

Risk management and dynamic network performance: an illustration using a dual banking system

This study applies dynamic network data envelopment analysis to compare a dual banking system, namely conventional and Islamic banks, with emphasis on risk measures. Non-oriented, variable return-to-scale dynamic network slacks-based measure is used to model the banking performance for the period 2008–2012. Under the consideration of risk measures, the findings highlight that Islamic banks excel in managerial efficiency while conventional banks surpass in profitability efficiency. Furthermore, the regression results find that the number of directors on the risk management committee has a positive impact on banking performance. Meanwhile, the high number of independent directors improves the profitability efficiency but worsens the managerial efficiency.