A bidimensional approach to mortality risk

Abstract We analyze the evolution over time of portfolios of life insurance contracts referring to different cohorts or risk classes of insureds. We model the intensity of mortality as a random field, in order to capture cross-generation (risk class) effects induced by the on-going management of portfolios of policies. Applications are described in the context of mortality risk analysis and (market) valuation of liabilities at aggregate level. It is shown how the model can be employed when an insurer’s new business is considered.     

Immigration policy: a selective approach

Recommendations are offered concerning Japanese policy on the immigration of foreign workers. The author notes that even those countries that used to welcome such immigrants now restrict their entry. The need for a selective policy that would aid internationalization in Japan and strengthen controls on illegal immigrants by requiring employers to secure permits before hiring foreigners is stressed.     

Escalating penalties: a supergame approach

The paper provides an economic rationale for punishing repeat offenders with increasing sanctions. We analyze the optimal intertemporal punishment scheme within a supergame framework, in which the legal authority is assumed to minimize the social costs of punishment under the constraint of keeping delinquency at an exogenously given maximal tolerable level.     

Preference through indifference: a topological approach

Two problems of consumer theory are approached topologically. An intrinsic topological characterization of transitivity of indifference is provided. Under very weak assumptions, indifference classes are proved to determine the continuous preference inducing them. Moreover, conditions, under which a given topology is the weakest making a preference continuous, are obtained.     

Political regimes: a coalition formation approach

What leads to the stability of a particular regime and what causes its demise? With the aid of formal modeling, the paper illustrates the necessary and sufficient conditions for different political regimes to exist. The game involves two factions representing the differing interests of the civil society and the armed forces of a nation. We illustrate the emergence of political regimes that includes both unconstrained and constrained democracies, both military and civilian autocracies and an alliance formed by a segment of the civil society and the military.     

Measuring innovation and innovativeness: a data-mining approach

Despite substantial advances over the past decades, measuring innovation and innovativeness remains a challenge for both academic researchers and management practitioners. To address several key concerns with current indicators—such as their specialization and consequent one-sidedness, their frequent lack of theoretical foundations, and the fact that they may not really foster creativity and invention—this paper introduces some new metrics via one data-mining approach—formal concept analysis—which is increasingly used to represent and treat knowledge. This approach can adapt to particular needs and goals, incorporate various kinds of information (qualitative or quantitative) from different sources, and cope with several types of innovations. It also uncovers a logical route to novelty, which might enhance the generation of ideas and is used here to support the measurement of innovativeness.

     

Networks in family business: a multi-rational approach

Current research on networks in family businesses has approached the topic from a mono-rational perspective where the family, business and social networks are each considered in relative isolation. This paper argues that multi-rational approaches, which accept that the three groups of networks interact and overlap, offer a useful alternative perspective. In proposing the case for multiple rationalities as a framework within which family business networking can be viewed – and in putting forward an initial model – the paper allows the interaction of the different networks within the family business to be more fully acknowledged. Evidence from the literature is presented as a basis for further exploration using empirical approaches and it is emphasised that further and empirical approaches are required.     

Modeling the International-Trade Network: a gravity approach

We investigate whether the gravity model (GM) can explain the statistical properties of the International Trade Network (ITN). We fit data on trade flows with a GM using alternative estimation techniques and we build GM-based predictions for the weighted topological properties of the ITN, which are then compared to the observed ones. Our exercises show that the GM: (i) may replicate part of the weighted-network structure only if the observed binary architecture is kept fixed; (ii) is not able to explain higher-order statistics that, like clustering, require the knowledge of triadic link-weight topological patterns, even if the binary structure perfectly replicates the observed one; (iii) performs very badly when asked to predict the presence of a link, or the level of the trade flow it carries, whenever the binary structure must be simultaneously estimated.     

Methods for analyzing decision-making: a framework approach

In political science an eternal question concerns how decisions and policies arise. Modern society, characterized by more uncertainty and complexity than before, increases the challenge of providing valid answers. However, the general lack of methodological concern in several previous studies in this area stresses the need for elaborations of more suitable approaches. In this article we add a methodological perspective that deals with this very question. By reviewing and analyzing earlier research on how decision-making is reached, the overall ambition of this article is to create a framework that can lay the methodological foundation for further studies. Such a framework, which takes into account both the complexity of modern multi-governance societies and adds methodological perspectives of macro and micro standpoints as well as of causal mechanisms, can be used in future research to achieve richer pictures of how decision-making is carried out. In addition, we show how a certain technique of analysis is highly compatible to this framework and that jointly these features provide solutions for a better understanding of the complexity of modern decision-making. All in all, applying this strategy can be used to better systematize complex causal chains that reflect different analytical levels and thereby increase leverage on how to understand and explain the process of political decisions.     

Strategic human resource management: a conceptual approach

In this paper conceptual issues associated with strategic human resource management are addressed. The rapidly expanding international interest in strategic human resource management is first highlighted. The article then explores some of the broader issues around the debate on SHRM that can inform thinking at a macro level. Firstly, the progress made towards understanding the meaning of SHRM is analysed, then a brief overview of the major models of SHRM to date is presented. This overview is used to highlight the key variables and interrelationships that need to be included in a model of SHRM, and a more detailed critical analysis of the contribution of the literature in each of these areas follows. A summary of the most important research questions arising out of the literature is followed by a model of the SHRM process, which attempts to remedy the major weaknesses in existing models of SHRM. The ways in which this model may be used as a basis for empirical research are then noted.

Strategic human resource management     

A university budget problem: a priority-based approach

The budgeting problem in a university environment is considered, using the Analytic Hierarchy Process (AHP) developed by Saaty. This approach allows the priorization of all relevant budget considerations both from the benefit to the school's future evolution and from the cost of operation viewpoints. This approach allows using the derived priority structure to arrive at a budget allocation. In addition to the systematic manner by which this budget is determined, the approach also provides an “audit trail” that is very important in explaining the specific allocation.     

Project appraisal for developing countries: a systematic approach

A cost/benefit model has been developed for financial and economic appraisal of projects in developing countries. The approach proposed is a technique for analysis that forces the analyst to consider all the relevant factors systematically, thus enhancing the identification of problem areas and supporting rational disciplined decision-making processes. The model includes all the assumptions relevant to the project analysis, detailed financing, financial analysis, the impact of the project on public finance, the impact on foreign exchange, and the economic appraisal from the nation's point of view.

The model is developed at a sufficiently detailed level and proves to be very useful for short-term/long-term planning and evaluation of the project. Consistency of making assumptions is ensured by having all the assumptions clearly defined and shown in the model. Moreover, the structure of the model is flexible and can easily be upgraded over time to meet the requirements and refinements with availability of more information and changing conditions. It is felt that with the existence of an easy to use computer model reluctance or indifference to test alternatives and carry out sensitivity analysis, which continues to the detriment of the nation's interest, will be eliminated.     

Spatial distribution of economic activities: a network approach

The aim of this paper is to analyse co-location patterns of manufactures and service industries at a microgeographic level using Spanish data from the Mercantile Register. Our approach allows us to analyse joint-location and co-location patterns of firms in different industries, and to overcome previous technical constraints in this type of analyses, partially thanks to using homogeneous cells instead of administrative units. This paper contributes to the empirical literature on industry location by developing a multisectorial co-location index computed by comparing differences between observed data about firms’ location and randomly generated data. Multisectorial relationships are analyzed by transposing bilateral relations onto an n-dimensional space. Our results show that dispersed industries tend to locate jointly and that industries with lower joint-location patterns have spatial structures similar to those obtained through input–output relationships, suggesting weak role of co-location patterns as interindustry linkages are not the main location determinants.

     

The demand for gasoline: a two stage approach

The demand for gasoline has typically been estimated using a reduced-form equation model. The simplicity of the approach is attractive, but has proven to be costly in terms of the insights lost as to the nature of the processes governing the interdependence between fuel efficiency and the overall demand for gasoline. On the other hand, disaggregating the overall demand for gasoline into all of its components produces an enormous amount of detail and many insights, but increases commensurately the complexity of the system and reduces its usefulness in forecasting.A two stage simple demand equation is used which first involves an estimation of the level of fuel efficiency of the fleet stock in terms of price induced technical change. In the second stage, the first equation is coupled with other typical demand variables to determine the overall demand for gasoline. The procedure provides an excellent forecasting equation of both the short-and long-term demand for gasoline.     

Migration and job change: a multinomial logit approach

A multinomial logit model of residence and job change is developed and estimated using U.S. data from the Michigan Panel Study of Income Dynamics. It is found that both housing demand and job search characteristics are significant determinants of the decision to migrate and that both equilibrium and disequilibrium forces induce migration and job change. In addition, "the data do not appear to be ordered with respect to job and residence change contingencies with the exception of changing neither job nor residence relative to all other contingencies."