Local search and the evolution of technological capabilities

The assumption that ‘local search’ constrains the direction of corporate R&D is central in evolutionary perspectives on technological change and competition. In this paper, we propose a network-analytic approach for identifying the evolution of firms' technological positions. The approach (1) permits graphical and quantitative assessments of the extent to which firms' search behavior is locally bounded, and (2) enables firms to be positioned and grouped according to the similarities in their innovative capabilities. The utility of the proposed framework is demonstrated by an analysis of strategic partnering and the evolution of the technological positions of the 10 largest Japanese semiconductor producers from 1982 to 1992.     

Scheduling and resource allocation in a food service system

The scheduling of food production is often accomplished informally based upon approximate time requirements stated in recipes and the judgment and experience of a food production manager, administrative dietician, or cook. Such schedules are seldom optimized to least overall duration and consequently contain periods of non-productive time on the part of personnel and resources. In addition, these schedules often attempt to avoid resource conflicts through the early scheduled completion of work activity; this leads to many of the menu items being completed sufficiently in advance of serving time that undesirable changes in the nutritional, organoleptic and microbiological properties of the food can take place.In this paper, a branch and bound algorithm is presented as a solution procedure for the foodservice scheduling problem. The advantage of branch and bound in comparison to a heuristic based scheduling procedure is that it can produce schedules which are optimized to least overall duration from start to finish. The added computational cost of the branch and bound procedure is justified, because most foodservice systems cycle their menus. Consequently, each of a finite number of schedules is reused numerous times over an extended period resulting in long-term productivity gains.Another advantage of the algorithm is that right-shifted or late start schedules may be produced. This is in keeping with our objective of minimizing the delay time between the completion of the food and its being served to the consumer.The paper describes a method by which the process time for each of the various steps in a recipe may be computed as a function of the number of servings being prepared. Although these are normally considered to be linear relationships, the algorithm can easily be modified to accept other types of relationships as well.Perhaps the most important aspect of the this research is that the branch and bound algorithm has been implemented to perform branching operations over two classes of decisions. The first class of decisions involves the selection of which recipe steps or activities are to be scheduled at a certain time, and the second class of decisions involves the choice of which resource class to assign to the activities in those cases where alternative resources are allowed. This dual branching philosophy provides a great deal of flexibility to the decision maker for handling the type of scheduling problems commonly found in practice. The expense of this added flexibility, however, is a substantial increase in the size of the decision tree which must be developed and explored.In order to demonstrate the performance of the algorithm for practical purposes, the lunch menus of a short term, acute case, 300 bed hospital in Syracuse, New York were used to develop production schedules. These menus included a total of 89 different hot food items whose recipes were placed into a menu file in the computer along with the coefficients needed to develop process time estimates as a function of numbers of servings to be prepared. In total, fourteen lunch menus are cycled at the hospital; the number of items appearing on the menus ranges from 8 to 14 hot food items.In the first series of tests, resources were assumed not to be interchangeable. The branch and bound procedure was successful in producing optimal solutions for eleven of the fourteen schedules. The three menus which were not optimally solved were aborted, because the size of the solutions tree grew beyond that which could be stored in 500K bytes of common memory. In spite of this, however, the upper bound solutions given by the aborted problems were found to be very close to lower bound values and therefore may be considered as very good solutions.In the second series of tests, certain resources were allowed to be interchangeable for some of the activities. Specifically, we assumed two labor classes. The first of these are called special cooks who are more experienced personnel. Normally special cooks prepare entree items, but they may be called upon in some cases to perform any activity normally performed by the second labor class- the less experienced cooks—who normally prepare soups, sauces and vegetables. The cooks, on the other hand, are never allowed to prepare menu items which call for special cooks. These groundrules are identical to those currently in practice at the hospital from which the test problems were obtained. Ten of the fourteen menus were selected for this series of tests. In all of the ten cases, the algorithm successfully developed optimal solutions without exceeding the 500K byte common memory limitation. And, in spite of the vastly increased tree size resulting from the dual decision branches, the computation times for these tests were only modestly greater than those of the first set of tests where alternative resources were not considered. The success of the algorithm in solving the dual decision problems resulted in large part from its ability to develop strong upper bounds very early in solution process. In addition, the characteristics of food production scheduling problems are such that the lower bound pruning is very effective especially in the early stages of tree development.It is important to note that the use of an algorithm such as this in a practical setting affords a very friendly user interface. Once the foodservice system's menu items have been placed into a file, the user may easily select any set of these items to include in a given schedule. Only three lines of data input are required. The first line specifies the number of items as well as the zero-hour or serving time. The second line identifies the item numbers of the hot-food items to be scheduled. And the third line specifies the number of servings for each of those items which must be prepared. Kitchen personnel with limited experience can be trained to input the data in less than 15 minutes of instruction time.     

Estimating compensating and equivalent income variations from hedonic price models

Estimates of welfare changes obtained from hedonic price models usually consist of changes in Marshallian consumer's surplus. This note shows how compensating and equivalent income variations can be computed from the information available in hedonicprice models.     

Application of game theoretic analysis to a problem in demography

"Governments in certain countries have tried over the last two decades to draw most industry to the largest cities. The effect has generally been a large increase in both the population and land area of the cities, as the nearby rural areas are taken out of agricultural production and urbanized. Where the land is especially fertile, this can represent a definite loss to the country's agricultural capabilities. By studying the Nash equilibria we show that, given political pressures, there is a very real danger that this process will continue until all, or practically all of the land has been urbanized." The geographical focus is on Colombia.     

Evidence of the invisible: toward a credibility revolution in the empirical analysis of tax evasion and the informal economy

Empirical research about tax evasion and the informal economy has exploded in the past few decades, seeking to shed light on the magnitude and (especially policy) determinants of these phenomena. Quantitative information informs the analysis of policy choices, enables the testing of hypotheses about determinants of this phenomenon, and can help with the accurate construction of national income accounts. Even as empirical analysis has burgeoned, some have expressed doubts about the quality and usefulness of some prominent measures. The fact that high-quality data is elusive is neither surprising nor a coincidence. The defining characteristic of tax evasion and informal economic activity—that they are generally illegal—often renders unreliable standard data collection methods such as surveys. Unlike invisible phenomena in the natural sciences, these invisible social science phenomena are hard to measure because of choices made by individuals. Analysis of tax evasion and the informal economy must proceed even in the absence of the direct observability of key variables, and theory should guide the construction and interpretation of evidence of the “invisible.” In this paper, we address what can be learned using micro or macro data regarding tax evasion and the informal economy under given conditions and assumptions, and critically review some of the most common empirical methods in light of our conclusions. We conclude with an entreaty for researchers in this field to enlist in the “credibility revolution” (Angrist and Pischke in J. Econ. Perspect. 4(2):3–30, 2010) in applied econometrics.     

It's so hard to be fair

When employees believe they are being treated fairly-when they feel heard, when they understand how and why important decisions are made, and when they believe they are respected-their companies will benefit. Research shows that practicing process fairness reduces legal costs from wrongful-termination suits, lowers employee turnover, helps generate support for new strategic initiatives, and fosters a culture that promotes innovation. What's more, it costs little financially to implement Yet few companies practice it consistently. Joel Brockner examines this paradox, exploring psychological and other reasons that cause managers to resist embracing process fairness. The fact that it's relatively inexpensive to implement, for instance, may be why some numbers-oriented executives undervalue it. Many managers believe that they practice process fairness, but 360-degree feedback tells another story. Some corporate policies actually undermine it--such as when the legal department won't let managers fully explain decisions for fear that disclosure could expose the firm to lawsuits. And, frequently, managers simply follow the all-too-human tendency to avoid uncomfortable situations. But the good news is that organizations can take concrete steps to promote greater process fairness. Many studies have shown that training programs make a big difference, and the author describes the most effective format. In addition, warning your managers that they may experience negative emotions when practicing fair process will help prepare them to cope with those feelings. Finally, role modeling fair process on the executive level will help spread the practice throughout the organization. The fact is, process fairness is the responsibility of all executives, at all levels and in all functions; it cannot be delegated to HR. The sooner managers realize that and work to make it a company norm, the better off the organization will be.     

Bootstrapping the Box–Pierce Q test: A robust test of uncorrelatedness

This paper describes a test of the null hypothesis that the first K autocorrelations of a covariance stationary time series are zero in the presence of statistical dependence. The test is based on the Box–Pierce Q statistic with bootstrap-based P-values. The bootstrap is implemented using a double blocks-of-blocks procedure with prewhitening. The finite sample performance of the bootstrap Q   test is investigated by simulation. In our experiments, the performance is satisfactory for samples of n=500$n=500$. At this sample size, the differences between the empirical and nominal rejection probabilities are essentially eliminated.     

The Revenue Consequences of Using Formula Apportionment to Calculate U.S. and Foreign-Source Income: A Firm-Level Analysis

This paper examines the 1989–1993 publicly available financial reports of 46 U.S.-based multinationals to estimate the revenue implications of implementing a U.S. federal formula apportionment system. Ignoring behavioral responses, we estimate shifting to an equal-weighted, three-factor formula would have increased their U.S. tax liabilities by 38 percent, with an 81 percent increase for oil and gas firms. We find the firms report a lower percentage of their worldwide profits as American profits than their American share of assets, sales, or payroll. The results may be attributed to more profitable foreign operations, tax-motivated income shifting, or measurement error.