Payoff-Improving Competition: Games with Negative Externalities

We demonstrate that more intense competition in games with production and negative externalities may be payoff-improving, and therefore welcomed by incumbents. In games that feature equilibria with strategic complements, increased competition may give rise to a new equilibrium where aggregate effort is lower, and the resulting reduced levels of externalities ultimately leaves all players better off. This setting applies to models of Cournot oligopoly, of common pool resources, and contests with endogenous prizes.

     

Interview with Professor Adrian FM Smith

Adrian Smith joined The Alan Turing Institute as Institute Director and Chief Executive in September 2018. In May 2020, he was confirmed as President Elect of the Royal Society. He is also a member of the government's AI Council, which helps boost AI growth in the UK and promote its adoption and ethical use in businesses and organisations across the country. Professor Smith's previous role was Vice-Chancellor of the University of London where he was in post from 2012. He is a past President of the Royal Statistical Society and was elected a Fellow of the Royal Society in 2001 in recognition of his contribution to statistics. In 2003-04 Professor Smith undertook an inquiry into Post-14 Mathematics Education for the UK Secretary of State for Education and Skills and in 2017, on behalf of Her Majesty's Treasury and the Department for Education, published a 16-18 Maths Review. In 2006 he completed a report for the UK Home Secretary on the issue of public trust in Crime Statistics. He received a knighthood in the 2011 New Year Honours list. The following conversation took place at the Alan Turing Institute in London, on July 19 2019.     

Followership in Leadership Studies: A Case of Leader–Follower Trade Approach

The current article acknowledges the absence of followership from the leadership literature for many years. Major theories of leadership are reviewed to assert that (1) modern leadership studies have been developed strictly from the leader's perspective with little or no attention on followership, (2) leadership studies have primarily been based on the static understanding of leadership (leaders always remain leaders),¹ and (3) there seems to be a need for a new paradigm for leader–follower relationships, which may result in organic relationships between leaders and followers through exchange of leadership and followership functions and roles. Thus, it is argued that the mutuality of relationships and influence between the follower and the leader exists. To address the need for a new paradigm for leadership, the leader–follower trade (LFT) approach is introduced, which may result in the nonstatic and organic approach to leadership–followership as two valuable human behavioral functions. In this case, leadership and followership functions and roles may be traded or exchanged by the positional leaders and followers in different situations or organizational settings toward mutual respect, empowerment, and effectiveness.     

Politics and Insurgencies

The article provides an analytical approach to capturing the population‐centric view of insurgency and allows for the inclusion of politics in describing its earliest stages. The outcome of the politico‐military contest over population support now becomes not only a function of the proposed governing policies of the two contestants, the government and insurgents, but also a function of such factors as the sensitivity of the population to the proposed policies and efforts of the two parties, the effectiveness of their mobilization efforts, and the strategic value of the region to insurgents. We also look at two different scenarios in which the government can and cannot mobilize against the insurgency and establish conditions in which a government may actually choose not to mobilize against a possible domestic threat. We also determine conditions under which insurgents may engage in less rent extraction than the government in order to increase their chances of gaining population support.     

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Adapting Strategic Niche Management for evaluating radical transport policies--the case of the Durham Road Access Charging Scheme

Transport systems in the UK are facing severe problems of congestion, rising energy use and pollution. One response to this is the move from local authorities to gradually introduce Travel Demand Management (TDM)¹ strategies, but these measures involve a complicated set of institutions, processes, people and procedures.The old road-building transport policy regime involved a relatively simple system of actors and processes around which expertise, knowledge, and skills had built up over many decades. The result of this is particularly evident for more radical demand management measures (such as congestion charging, workplace parking fees and high occupancy vehicle lanes), which often get held up or discarded due to controversy, disagreements, unanticipated problems, and a whole host of delaying factors. If they ever get implemented, they tend to be watered-down and consequently less effective.One potential way to analyse these problems and identify possible solutions is the use of Strategic Niche Management (SNM). SNM is rooted in organisational innovation diffusion theory and provides a structure to evaluate and manage the introduction of new and innovative transport technologies. This paper introduces Strategic Niche Management and explores transferring this technique for evaluating TDM policy measures. The resulting technique is applied retrospectively to the case of the Durham Road Charging scheme, selected as an example for this paper.     

Regime switches between dividend and bond yields

The relation between bond and equity returns serves as a proxy for estimating the premia investors' demand on their equity portfolio holdings and assessing the substitution effects between the two markets. With this in mind, we examine empirically the co-movements and the underlying information between equities and bonds. Our approach relies on the comparison between bond and dividend yields — a relation better known as the gilt-equity yield ratio–GEYR — by examining the characteristics of the cointegration relation between the bond and equity yields. In this context, this paper's contribution is that it lifts the restrictions of linearity both in the long-run cointegration relations and in the underlying short-run relations presented in the VECM. Specifically, we apply the regime-switching framework of Gregory and Hansen (Gregory, A. W. & Hansen, B. E. (1996). Residual-based tests for cointegration in models with regime shifts. Journal of Econometrics 70, 99–126) for the long-run equilibriums and the Markov Switching VECM, established by Krolzig (Krolzig, H.M., 1997. Markov switching vector autoregressions. Modelling statistical inference and application to business cycle analysis. Springer, Verlag) for the short run ones. Our aim is to examine the allocation of capital among the UK bond (or else, gilt) and stock markets for the period of 01-1987 to 01-2007, in a fashion that better reflects the structural breaks and regime shifts of the underlying market conditions. Our findings confirm the substitution effects among stocks and bonds in the long run and highlight the importance of market conditions for the allocation of capital among stocks and bonds.     

Developing a Country‐wide Tourist Loyalty Scheme: A Barren Landscape

Loyalty programs, popular in today's competitive business environment, have been capturing the attention of the tourism industry since the mid 80's. While many segments of the industry have successfully utilized loyalty programs, the development of a country‐wide loyalty scheme still poses major challenges. Reflecting the findings of an extensive mixed methods research, the paper set out to empirically investigate tourists' willingness to participate in a country‐wide loyalty scheme, define the incentives they expect from such a scheme, and, explore the perceptions of hospitality stakeholders towards this potential development. Findings are of interest to both academic scholars and industry stakeholders. Copyright © 2016 John Wiley & Sons, Ltd.     

Adoption and welfare impacts of multiple agricultural technologies: evidence from eastern Zambia

Using plot level panel data and multinomial endogenous switching regression, this article analyzes the adoption and welfare impacts of multiple agricultural technologies in eastern Zambia. We adapt a multinomial endogenous switching/treatment effect regression framework to correct for selection bias and endogeneity originating from both observed and unobserved heterogeneity. Results indicate that joint adoption of multiple agricultural technologies had greater impacts on crop yields, household incomes, and poverty than the adoption of individual components of the technology package. Our findings suggest that efforts aimed at raising household incomes and reducing poverty should focus on promoting the adoption of multiple agricultural technologies through provision of improved support services such as extension and input supply.