Subjective probabilities on “small” domains

The Savagian choice-theoretic construction of subjective probability does not apply to preferences, like those in the Ellsberg Paradox, that reflect a distinction between risk and ambiguity. We formulate two representation results—one for expected utility, the other for probabilistic sophistication—that derive subjective probabilities but only on a “small” domain of risky events. Risky events can be either specified exogenously or in terms of choice behavior; in the latter case, both the values and the domain of probability are subjective. The analysis identifies a mathematical structure—called a mosaic—that is intuitive for both exogenous and behavioral specifications of risky events. This structure is weaker than an algebra or even a λ-system.     

Optimal statistical decisions about some alternative financial models

We study Neyman–Pearson testing and Bayesian decision making based on observations of the price dynamics (_Xt:t∈[0,T])$(X_t:t\in [0,T])$ of a financial asset, when the hypothesis is the classical geometric Brownian motion with a given constant growth rate and the alternative is a different random diffusion process with a given, possibly price-dependent, growth rate. Examples of asset price observations are introduced and used throughout the paper to demonstrate the applicability of the theory. By a rigorous mathematical approach, we obtain exact formulae and bounds for the most common statistical characteristics of testing and decision making, such as the power of test (type II error probability), the Bayes factor and its moments (power divergences), and the Bayes risk or Bayes error. These bounds can be much more easily evaluated than the exact formulae themselves and, consequently, they are useful for practical applications. An important theoretical conclusion of this paper is that for the class of alternatives considered   neither the risk nor the errors converge to zero faster than exponentially in the observation time T$T$. We illustrate in concrete decision situations that the actual rate of convergence is well approximated by the bounds given in the paper.     

How do threshold firms sustain corporate entrepreneurship? The role of boards and absorptive capacity

As companies move from one stage of their cycle to the next, they often have to revamp their skills and build innovative capabilities to survive, achieve profitability, and stimulate growth. Corporate entrepreneurship (CE) activities give these firms a foundation for building and exploiting these capabilities. In turn, stimulating and sustaining CE requires the infusion of resources and new knowledge into the firm's operations, using multiple external sources. In this paper, we highlight the importance of boards of directors and absorptive capacity for gaining access to varied and current knowledge that enriches CE. We suggest that boards and absorptive capacity complement each other in fueling CE activities. Further, boards can sometimes substitute for poor absorptive capacity and vice versa, influencing the intensity of CE activities. Managing these complementarities (or substitutions) is crucial for sustaining CE initiatives and creating value from them.     

Risking public health by approving some health claims? – The case of phosphorus

There is a well-established consensus on the many biological functions of essential nutrients, and related general function health claims will be soon authorised in the European Union. Such claims about the role of nutrients in the body’s growth, development and functioning could provide a powerful marketing tool and significant increase in the consumption of specific food products. Even though these claims are scientifically substantiated, there are both health and ethical concerns about whether such claims should be allowed where the intake of these nutrients easily exceeds the recommendations and a bigger intake might have adverse affects. The case of phosphorus and its role in the maintenance of normal bone is discussed.     

Characteristics of learning computer-controlled mechanisms by teachers and students in a common laboratory environment

Growing popularity of robotics education motivates developing its didactics and studying it in teacher training programs. This paper presents a study conducted in the Department of Education in Technology and Science, Technion, in which university students and school pupils cope with robotics challenges of designing, building and operating computer-controlled mechanisms. The university students were involved in developing robot prototypes and related instructional materials, and assisted in teaching robotics and guiding projects to middle school and high school pupils. The study focused on behaviors of the two groups of learners and aimed to elicit and analyze typical characteristics of learning in the developed robotics environment. We collected qualitative data on learning through robot design and experimentation activities and, by means of the ground theory method, elicited and analyzed typical behavioral characteristics of students’ and pupils’ learning: self-confidence, help, collaboration, interest, seriousness, self-dependence, learning effort, responsibility, coping with learning pressure, learning through observation, and perseverance. As found, the behavior characteristics evolve in the course of robotics studies and their evolution can give indication on the development of the desired competences.     

Absorptive capacity, its determinants, and influence on innovation output: Cross-cultural validation of the structural model

The main purpose of this study is to provide stronger quantitative evidence in the field of organizational absorptive capacity research by using a more direct measure of absorptive capacity and a wide range of variables in a cross-nationally tested structural model. The results show that there exist two kinds of absorptive capacity: demand-pull and science-push. Their most important determinants proved to be internal R&D, training of personnel, innovation co-operation and attitude toward change. Both kinds of absorptive capacity are positively related to product and process innovation output. Therefore, absorptive capacity is to be given more attention in the future research and innovation policy considerations.     

When Kamay Met Hill: Organisational Ethics in Practice

The Kamay and Hill insider trading conviction in Australia highlights many of the issues and problems involved in the prevention, detection and prosecution of insider trading. The case uniquely highlights how ethical behaviour is instilled at home, in school and in society, and the need for ethical responsibility at the personal and organisational level to complement legal rules and enforcement. We use the Kamay and Hill case to explore the reasons behind the failure of the traditional top-down approach to insider trading prevention, where institutional ethical codes of conduct largely reflect and rely upon national rules, norms, and regulation. We propose a bottom-up approach to ensure that individual and organisational behaviour is ethical, where emphasis is not on compliance but on a set of core ethical values that allow individual and corporate expression. It is our strong belief that compliance cannot replace ethics.     

The effects of public expenditures on labour productivity in Europe

Empirica - In this paper, we analyse the effects of public expenditures and their structure on productivity growth in industry and services in the European Union (EU) countries (1996–2017)....     

Oil and ethnic inequality in Nigeria

Although it is known that ethnic biases exist in Africa, less is known about how these respond to natural resource prices. Many ethnically fragmented African countries depend on a small number commodities for their export base. Oil prices experienced in early life predict differential adult outcomes across Nigerian ethnic groups. Our difference-in-difference approach compares members of southern ethnicities to other Nigerians from the same birth cohort. This North-South distinction mirrors several economic, political, and religious cleavages in the country. Greater prices in a southern individual’s birth year predict several relative outcomes, including reduced fertility, delayed marriage, higher probabilities of working and having a skilled occupation, greater schooling, lower height, and greater BMI. These microeconomic impacts are explained by macroeconomic responses to oil prices; relatively, urban incomes increase, food production declines, and maternal labor intensifies in the South.