The discrete Kalman filter applied to linear regression models: statistical considerations and an application

In this paper we show how the Kalman filter, which is a recursive estimation procedure, can be applied to the standard linear regression model. The resulting "Kalman estimator" is compared with the classical least-squares estimator.
The applicability and (dis)advantages of the filter are illustrated by means of a case study which consists of two parts. In the first part we apply the filter to a regression model with constant parameters and in the second part the filter is applied to a regression model with time-varying stochastic parameters. The prediction-powers of various "Kalman predictors" are compared with "least-squares predictors" by using T heil 's prediction-error coefficient U.     

Constraints on the conversion to sustainable production: the case of the Dutch potato chain

The question of how to make agriculture more sustainable is a timely topic. This paper examines the Dutch potato supply chain in the context of its surrounding network. Based on the chain network approach it identifies constraints on conversion to organic potato production from a business administration and a public administration perspective. Two obvious constraints are the demand for ecologically produced products and the problem of cultivating potatoes. However, the potential for conversion is also affected by the way the market and the supply chain are structured, by the coordination of activities, efficiency‐driven actors, relations and interdependencies between actors and by the asymmetrical distribution of power. Furthermore, conversion is constrained by the limited influence of network parties such as NGOs and current government policies. Based on the analysis, the paper questions whether the ecological approach (organic farming) will be more effective than strengthening a more generic approach stimulating the sustainability of the sector. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Selection in a field experiment with voluntary participation

The external validity of experiments in economics can be ensured only if participants reflect the relevant market population. We study data from a promotional campaign of NH‐Hoteles to study sample selection problems in a gift exchange field experiment. The promotion allowed guests to pay any non‐negative amount for a stay in one of 36 hotels in Belgium and the Netherlands. We distinguish between involuntary participants, who booked prior to the announcement of the promotional campaign, and voluntary participants, who booked after the campaign was announced. The involuntary participants pay, on average, substantially more. This different behavior cannot be explained by differences in satisfaction or observed compositional differences between both groups. During the promotion we varied the posted price of a room that was communicated to the guests. Only the involuntary participants respond to this exogenous variation in the posted price. We argue that the promotional campaign mainly attracted individuals with relatively few prosocial reputational concerns, because they benefit most from a name‐your‐own‐price scheme. Copyright © 2010 John Wiley & Sons, Ltd.     

A framework for risk criteria for critical infrastructures: fundamentals and case studies in the Netherlands

Critical infrastructures are complex societal systems. For that reason, risk criteria for critical infrastructures are also ‘part’ of the risk criteria for complex societal systems. The questions to be resolved are: (1) are the societal risk criteria of complex systems defined and quantifiable; and (2) is it known how the risk criteria of critical infrastructures relate to the risk criteria of the complex system as a whole. In other words, what certainty is there that the risk criteria of critical infrastructures meet the risk criteria of complex systems as a whole. A complex system in this respect may be a society as a whole, e.g. a nation.     

ICT platforms and regulatory concerns in Europe

The rise of platforms in ICT markets invites a reappraisal of regulatory frameworks and practices. As platforms originating in entirely different sectors increasingly compete directly against each other, regulators ought to address platform competition issues regardless of their sector of origin, and taking into account the specificities of two-sided or multi-sided market business models. This paper identifies different types of such business models in ICT markets. It offers an exploration of a number of specific concerns that may arise related to specific platform types, and points at a number of instruments available to regulators to address these concerns.     

Services Markets and the Economics of Social Interaction

There is symbolically transmitted personal and cultural meaning involved in interpersonal service transactions, for which economic explanation has to account. Eanguage, symbols and in terpretations are an important context for many ‘rational’ services. The market-dynamics of many advanced services in the post-industrial economy result from rational use of these symbols and interpretations in the course of strategic economic interaction. ‘Strategic services ‘expand into the social sphere of informal, ‘communicative’ action (the process of rationalisation). In order to account for these aspects, a platform for interdisciplinary services-research has to be created. We can draw in this respect upon ideas of Habermas.     

Simultaneous search with heterogeneous firms and ex post competition

In this paper we study the allocation of workers over high and low productivity firms in a labor market with coordination frictions. Specifically, we consider a search model where workers can apply to high and or low productivity firms. Firms that compete for the same candidate can increase their wage offers as often as they like. We show that if workers apply to two jobs, there is a unique symmetric equilibrium where workers mix between sending both applications to the high and sending both to the low productivity sector. But, efficiency requires that they apply to both sectors because a higher matching rate in the high-productivity sector can then be realized with fewer applications (and consequently fewer coordination frictions) if workers always accept the offer of the most productive firm. However, in the market the worker's payoff is determined by how much the firm with the second highest productivity is willing to bid. This is what prevents them from applying to both sectors. For many configurations, the equilibrium outcomes are the same under directed and random search so our results are not driven by random search. We discuss the effects of increasing the number of applications and show that our results can easily be generalized to N-firms.     

How do dimensions of proximity relate to the outcomes of collaboration? A survey of knowledge-intensive networks in the Dutch water sector

There is a growing body of literature on the importance of proximity for innovation and other knowledge-related outcomes. We examine the impact of geographical, social, organisational, and cognitive proximity for a heterogeneous population, including people from academia, knowledge institutes, industry, and government. We analyse data on 1020 ego–alter relationships, derived from a survey among water professionals in the Netherlands. The use of survey data allows for more refined indicators of proximity and more diverse collaboration outcomes than those common in the literature. Social and cognitive proximity have a positive effect for all outcomes examined. Geographical and organisational proximity have a negative effect on hard (tangible) outcomes yet a weak positive (if any) effect on soft (intangible) outcomes. We do not find evidence for the suggestions in the conceptual literature that proximity follows an inverted U-curve where most outcomes are achieved in relations with some but not too much proximity.     

An Open Source Web-Mapping System for Tourism Planning and Marketing

Core retail management functions include defining market areas and profiling customers. For tourism enterprises, market areas are geographically dispersed with many customers residing beyond the immediate area surrounding the attraction. Visualization and analysis of these distributed market areas are significantly enhanced by the capabilities of Geographic Information System (GIS) technology and help to support management objectives. Unfortunately, many businesses are unable to utilize GIS due to its complexity and expense. This study develops a decision support tool for tourism planning and marketing that is customized and easy to use, employs open source software to reduce expense, and allows for broad accessibility via web delivery. Users can easily visualize and examine the spatial distribution of their own United States (US) client origins and visitation patterns along with relevant tourism-specific and general demographic information. This functionality can be beneficial in developing or augmenting business plans or marketing strategies, and for informing tourism theory.     

Does advertising spending really work? The intermediate role of analysts in the impact of advertising on firm value

Both managers and investors are increasingly concerned with the impact of advertising spending on shareholder returns. This study investigates the analyst-based processes by which advertising may create firm value. Using a large longitudinal dataset with 1,052 firms over 20 years, we find that firms decreasing from the top 20% to the bottom 20% of advertising spending group when compared to all industry competitors would experience a drop of abnormal return by 4.08% in 1 year and a cumulative total of 81.6% in 20 years. Also, analyst activities partially mediate the impact of advertising on firm return and risk. These findings indicate that analysts may act to externally validate the business logic underlying the advertising expense. The more analysts factor in firm advertising spending and reflect it in their earnings forecasts, the more likely the benefits of advertising are channeled into firm value. The results bridge research interests across marketing, accounting, and finance disciplines and help managers understand how product and financial markets are united. Main Street could better align with Wall Street via corporate disclosure of advertising spending to equity analysts.