The man-machine interface

The basic objective of this article is to define a composite measure of human capabilities that could also be used to measure the “skill” requirements of various manufacturing tasks. In the course of our research, however, we have come to the conclusion that most human workers (at least in the “semiskilled” categories) are not employed for their manual skills, or dexterity, but for a different purpose. Although our basic objective remains unchanged, our research focus has shifted to the emerging competition between human workers as machine process controllers in certain highly engineered environments, and the use of sensor-based, computerized systems for the same purpose.     

The “greening” of trade unions and the demand for eco-taxes

By embedding labour market bargaining considerations in an influence-seeking framework, we show how a union's stance on environmental policy depends on the exposure of their members to the risk of job loss. With a risk of unemployment, unions lobby with employers to resist stricter environmental policies. When employment is secure, unions may support policies that reduce employment opportunities for nonunion workers. “Environmentalism” can therefore arise without explicit environmental concerns among workers. Consequently, pollution taxes may yield a negative welfare dividend in the form of inefficiently high unemployment.     

On the welfare implications of firing costs

This is a paper on the theory of institutions. It provides a rationale for the presence of firing costs in OECD countries based on a market failure that takes the form of an externality. Workers have firm-specific and industry-specific skills, and in each period there is a nonzero probability that a worker quits. The quitting probability makes the private discount rate (used by firms in making decisions about firing workers) higher than the social discount rate. This generates a “quitting externality”, where firms lay off too many workers in a recession. Firms are too quick to dispose of their human capital in a cyclical downturn because it is of less value to them than it is to society. State-mandated redundancy payments become a second-best remedy to overcome the market failure.     

On Forecasting Discontinuities

Too much has been written about forecasting trends via “envelope curves.” To plot a straight line on log-paper is a no-brainer. The special phenomenology of phase changes, catastrophes, or “crashes,” and their key evolutionary role is the subject of this article. There is no unique way of forecasting such events, but one indicator is an apparent inconsistency between two or more extrapolations with each other. Alternatively, a catastrophe may be signalled when a trend extrapolation encounters a natural limit. A number of possible discontinuity scenarios are sketched, although overall, the article laments the lack of theorization in forecasting disconuities.     

Conflict in the labor market: Seniority rules and unemployment

This paper examines the macroeconomic implications of two labor-market institutions that play an important role in worker-management interactions: seniority-based layoffs and majority voting on wage proposals. Together, these make the median worker, rather than the marginal worker, the important decision maker for wage and employment outcomes. Since he is risk-averse, he will trade off higher wages for greater security of employment; therefore, the equilibrium level of unemployment will be much less than 50%, but higher than the conventional natural rate of unemployment. Median-worker behavior helps to explain both the greater frequency of excess supply than excess demand (59.4% versus 40.6% of the time since 1890) and the wage concessions of 1981–1983. A new Phillips curve is derived which incorporates systematic influences of the size of the labor force (to correct for the inappropriate measure of excess supply) and Tobin's “q” variable (to measure the risk of unemployment for the median worker). With U.S. data for 1957–1983, this new Phillips curve has a higher explanatory power than the traditional one. Additional forces that influence wages and employment in this setting are identified: firms have an incentive to bargain actively over wages rather than accept union demands passively and senior workers have a “social contract” with junior workers that reduces the extent to which the former exploit the latter.     

Human capital depletion, human capital formation, and migration: a blessing or a “curse”?

We specify conditions under which a strictly positive probability of employment in a foreign country raises the level of human capital formed by optimizing workers in the home country. While some workers migrate, “taking along” more human capital than if they had migrated without factoring in the possibility of migration (a form of brain drain), other workers stay at home with more human capital than they would have formed in the absence of the possibility of migration (a form of brain gain).     

Player Types and Self-Impression Management in Dictatorship Games: Two Experiments

Recent experimental research on dictatorship games shows that many dictators share their outcomes with unknown, anonymous others. The data suggests that dictators can be “typed” as rational (taking the maximum), equal (splitting outcomes equally), or “other.” This paper experimentally tests the self-impression management model, which predicts that individuals act to show themselves in a positive light, even when they are the only observer of their own behavior. The model predicts that the “other” type of dictator will avoid being greedy by taking more only as their choices are increasingly restricted. Results from two experiments support the model's predictions. The conclusion advocates differentiating basic psychological motivations in modeling individual behavior. Journal of Economic Literature Classification Numbers: C78, C91, D63.     

Venture capital: Structure and incentives

Venture capital is a major source of financing for firms in their early stages of development. Such businesses, especially in the high technology industries, are characterized by a high degree of uncertainty and asymmetry of information. In this paper we analyze the relationship between a venture capital organization (“capitalist”) and the initial owner of an entrepreneurial entity in which it invests (“entrepreneur”). We focus on the agency problems and derive a compensation system. In our model the capitalist provides a combination of equity and debt financing while the owner provides equity financing which serves as a signal affecting the beliefs (“optimism”) of the capitalist. The interesting result is that since the capitalist is assumed to be more risk averse than the entrepreneur, he is made to be more optimistic than the entrepreneur at the optimum.     

Does consumption respond to predicted increases in cash-hand availability?: Evidence from the Italian “severance pay”

We examine whether Italian household consumption exhibits excess sensitivity to “severance pay”, a sizable lump-sum that workers receive at job termination. We find no evidence of excess sensitivity of non-durable expenditure to this anticipated cash-in-hand change.     

A model of “coupled” technology transfer : A logistic curve approach

This article presents a mathematical model relating to the technology transfer problem. The origin of the problem stems from the existing trade-offs between the strategies of “technological progressiveness” and “static efficiency” employed by firms or countries defined as “leaders” and “followers,” respectively. The formulation of the model is based on the assumption that the technological development of a firm or a country follows a logistic growth curve when related to a specific technology. During the process of a “coupled” technology transfer, the development of the follower changes and its behavior is described by a first order nonhomogenous deferential equation. Different scenarios of the “coupled” technology transfer between the leader and the follower are being discussed.     

Futures research scenarios and time succession

The possibility of introducing time-succession into a type of scenario approach used in futures research is examined, starting from Duperrin and Godet's SMIC-74 method, which deals with sets of nondated binary events and requires as input data the individual probabilities of these events and their time-independent conditional probabilities, taken by pairs. Time succession is then considered successively at two levels: 1)as a means used just to make conditional probabilities more accessible to intuition, following a proposal of Mitchell and Tydeman, to which a simplification is suggested; and 2) as a characteristic to be kept in the time-succession dependent scenarios that are finally dealt with. In the second the investigated period is split into q time “scenes,” as suggested by Olaf Helmer, and a method is proposed using the same algorithm as is used in SMIC-74, but in which binary events, as basic elements, are replaced by “boxed-events.” A boxed-event consists in the couple formed by an event and a “box” that represents either one of the q time scenes or the nonoccurrence of the event. The procedure by which experts can be consulted about the individual and conditional probability data required is described in some detail.     

Influence of decision styles on use of decision models

This article discusses how the “decision style” of an administrator influences the adoption and use of particular decision models. Several “interactive” and “analytical” decision models often used to guide decision making are described and critiqued to point out their virtues and deficiencies. Propositions are suggested that contend that “systematic,” “judicial”, “speculative”, and “intuitive” styles have clear-cut preferences for a particular decision model. This model seems to be used, even when another would be more suitable. Effective decision makers are postulated to adapt their styles, or at least to see the benefits of different styles. Mixed-mode models are proposed that seem to simulate the behavior of successful decision makers.     

Absenteeism: A comparison of incentives in alternative organizations

This paper uses a game-theoretic model to analyze the incentives workers may have to play “hookey” from work given that there is an outwardly unobservable probability of being sick and thus being unable to work. We compare incentives and equilibria in labor-managed firms (LMFs) and in profit-maximizing firms (PMFs), both in single-period and repeated games. We show, among other things, that in an egalitarian LMF there are circumstances under which members will not work when it is optimal to work, while the PMF suffers from the opposite problem; daily paid workers will work even when it would be better if they did not.     

Can Japan succeed in “Chigyo-ka” (intelprise-formation)?

There are two aspects in today's information revolution that started in the late 1970s. The first is an aspect referred to as “the third industrial revolution,” which triggers the transition to the “21st century system of Industrialization.” The information revolution in this sense brings the creation of new “breakthrough industries (new multimedia industries).” And the second aspect of the information revolution possesses the characteristics of both a technological revolution and a social revolution and brings about the arrival of the third phase of the historical evolutionary process of the modern civilization, which proceeds through three phases, namely “militarization, industrialization, and then informatization.”If the bearers of modern industrialization are a “group of enterprises” that have been engaged in the race in order to gain “wealth” (generalized means of exchange/exploitation power), and if these enterprises' activities have been exercised in the world market where their products have been sold, then it is appropriate to call the bearers of informatization a “group of intelprises.” They will be engaged in the race to gain “wisdom” (generalized means of persuasion/induction power), then stages of their activities can be called a “global intelplace” where “sharables,” that is, information and knowledge, will be disseminated. And now, toward the 21st century, the third phase of modernization, which can be called the “informatization/intelprise formation” or the “wisdom game” (intellectualism), is about to begin.Japan's “ie society (a society based on the ie principle—literally, it means “house” but here it is interpreted as cultural principle for organizing a society), which has been going through the process of evolution on the Japan Archipelago, has developed a network-based organization with little stratification within its infrastructure. In this sense, Japanese society can be characterized as a “network-oriented society” in which intelprises and an intelplace in the broad sense have functioned as the essential components of the society since Middle Ages. In general, an intelplace and intelprises that operate actively within this framework serve as the flexible bases for different types of social relations and institutions, such as states and markets and eventually integrate these into the society to a certain extent. In fact, it took place quite regularly during the modernization “in the narrow sense,” or Westernization of Japanese society after the Meiji Restoration. There exist some problems, however. Some of the characteristics found in Japanese society may become obstacles to activities aimed at the sharing and promotion of information and knowledge in the global intelplace and Japanese participation in the “wisdom game.” Badly needed are serious efforts for Japanese intelprise-formation to reduce these obstacles as much as possible.     

The ghost of financing gap: testing the growth model used in the international financial institutions

The Harrod–Domar growth model supposedly died long ago. Still today, economists in the international financial institutions (IFIs) apply the Harrod–Domar model to calculate short-run investment requirements for a target growth rate. They then calculate a “financing gap” between the required investment and available resources and often fill the “financing gap” with foreign aid. The financing gap model has two simple predictions: (1) aid will go into investment one for one, and (2) there will be a fixed linear relationship between growth and investment in the short run. The data soundly reject these two predictions of the financing gap model.     

Learning to Learn, Pattern Recognition, and Nash Equilibrium

The paper studies a large class of bounded-rationality, probabilistic learning models on strategic-form games. The main assumption is that players “recognize” cyclic patterns in the observed history of play. The main result is convergence with probability one to a fixed pattern of pure strategy Nash equilibria, in a large class of “simple games” in which the pure equilibria are nicely spread along the lattice of the game. We also prove that a necessary condition for convergence of behavior to a mixed strategy Nash equilibrium is that the players consider arbitrarily long histories when forming their predictions.Journal of Economic LiteratureClassification Numbers: C72, D83.     

Characteristics of technology transfer in business ventures: the case of Daejeon, Korea

This article explores the characteristics of venture business and entrepreneurs in Korea to (1) identify technology transfer activities, (2) analyze the differences between technology transfer in linear and nonlinear venture businesses, and (3) guide more effective venture business policy and strategy. This empirical assessment reveals that entrepreneurs have insightful evaluations about their resources and capacities as well as expectations with regard to functions and features of science parks and incubators. Respondents from “linear model”-based start-ups tend to be older and have higher education, employ more basic research and development (R&D) and have more R&D-oriented careers, and have more varied work experience than “nonlinear”-based start-ups. The functions and features of science parks and incubators were generally not considered a critical influence on start-ups nor on the growth of venture businesses. Accordingly, alternative venture-nurturing strategies are discussed as being key to accelerate venture businesses growth.     

Technological generalizations and leitbilder—the anticipation of technological opportunities

Recent national technology foresight studies as well as the Millennium Project of the American Council for the United Nations University are very much based on “nodes of discussion.” These short statements are called, e.g., topics, issues, or developments. This article provides a framework for the classification and analysis of nodes related to future technological development. Key concepts of the article are “technological generalization” and “leitbild.” The topics in the technology foresight Delphi studies can be seen as different kinds of generalizations from already realized technological developments. Leitbild is a German word. Its most general meaning is a guiding image. Like a common vision, a leitbild creates a shared overall goal, offers orientation toward one long-term overall goal, and provides a basis for different professions and disciplines to work in the same direction. The analysis of leitbilder and emerging technological paradigms might contribute to the construction of topics and issues and to the argumentation processes related to them.     

Sustainability of nations by indices: Comparative study between environmental sustainability index, ecological footprint and the emergy performance indices

The present work makes a comparison between the two most used environmental sustainability indices of nations: “ecological footprint” and “environmental sustainability index”, with two emergy ratios (renewability and emergy sustainability index). All of them are gaining space within the scientific community and government officials. Despite the efforts for obtaining an index that adequately represents the sustainability of a region, according to the result of this research, nowadays there is not yet a completely satisfactory index. We consider that all of them need to be improved, but the results point out the possibility of obtaining one better index of sustainability through the junction of ecological footprint with renewability emergy index.