Idiot's Bayes—Not So Stupid After All?

Folklore has it that a very simple supervised classification rule, based on the typically false assumption that the predictor variables are independent, can be highly effective, and often more effective than sophisticated rules. We examine the evidence for this, both empirical, as observed in real data applications, and theoretical, summarising explanations for why this simple rule might be effective.     

Formal Rehabilitation Procedures and Insolvent Firms: Empirical Evidence on the British Company Voluntary Arrangement Procedure

The British Company Voluntary Arrangement (CVA) is a relatively new debtor rehabilitation process intended to help financially troubled companies, particularly SMEs, resolve their difficulties without being forced into liquidation by secured creditors anxious to recover their funds. This paper is based on a survey conducted by Milman and Chittenden for the Association of Chartered Certified Accountants that is the largest and most comprehensive on the subject of British CVAs. It has three principal objectives: (i) to outline the defining characteristics of CVAs; (ii) to analyse the relationships between CVA performance and contextual factors; (iii) to provide policy recommendations based on those findings. Among other things we find that CVA success is most closely associated with sound fundamental prospects for recovery and supportive creditors. Our principal recommendation is that ways should be found of lowering the fixed costs of CVAs to make the procedure feasible for a larger number of small firms.     

Real Wages in Australia and Canada, 1870–1913: Globalization versus Productivity

Australia's and Canada's real wage experiences between 1870 and 1913 were distinctive. Faster productivity growth underpinned Canada's overtaking of Australia's wage levels. The globalization forces of migration and trade also shaped their comparative wages, principally by reducing wage growth in Canada. Immigration increased slightly Australia's real wages, but reduced wage levels in Canada, and tempered there the beneficial effects of rising productivity and improving terms of trade. In contrast, wage earners' share of national income rose after 1890 in Australia, with the productivity slowdown hitting chiefly rents and profits. Distributional shifts favouring wage earners in Australia, and the depressing effects of mass immigration on wages in Canada, limited Canada's wage lead before 1914, despite her faster productivity growth.     

Stackelberg thresholds in network routing games or the value of altruism

It is well known that the Nash equilibrium in network routing games can have strictly higher cost than the optimum cost. In Stackelberg routing games, where a fraction of flow is centrally-controlled, a natural problem is to route the centrally-controlled flow such that the overall cost of the resulting equilibrium is minimized.We consider the scenario where the network administrator wants to know the minimum amount of centrally-controlled flow such that the cost of the resulting equilibrium solution is strictly less than the cost of the Nash equilibrium. We call this threshold the Stackelberg threshold and prove that for networks of parallel links with linear latency functions, it is equal to the minimum of the Nash flows on links carrying more optimum flow than Nash flow.Our approach also provides a simpler proof of characterization of the minimum fraction that must be centrally controlled to induce the optimum solution.     

Water meters: an incentive to conserve and a signal to the market

The paper discusses Anglian Water's approach to charging for water services, drawing on its experience of implementing a metering programme for its domestic customers. It highlights the challenges faced, how they were overcome, and summarises the benefits delivered by metering.     

Too Much Monitoring, Not Enough Performance Pay

This paper endogenises the internal organisation of competitive firms in a simple general equilibrium framework. The options are monitored teams, unmonitored teams motivated by collective performance pay, and self-employment. The choice of incentive scheme depends on market price and also affects price through its influence on output. As more people opt for self employment, pecuniary externalities increase the pressure on the rest to follow suit and Pareto rankable multiple equilibria arise. The conditions for a competitive equilibrium to be constrained efficient are restrictive and everyone may gain from policies limiting monitoring and self employment and from the imposition of entry taxes.     

Developing a framework for network and cluster identification for use in economic development policy-making

Drawing on extensive academic research concerning clusters and networks, this paper seeks to create a framework capable of reviewing and monitoring different aspects of clusters and networks on an ongoing basis. The nine-element framework allows evaluation of the structures and processes for the eight basic cluster types identified from the literature. The use of this framework as a complimentary tool to the Multi-sectoral Qualitative Analysis (MSQA) methodology is then demonstrated using three examples (the construction, hardwood timber and higher education sectors). The data was gathered from three sets of key stakeholders (government, institutions and industry) provided from a recent study funded by the Welsh Assembly Government's Small Grants Research Programme. These cases illustrate the use of the framework in helping to generate the initial information necessary for subsequent cluster development policy (within overall regional economic development) by government to occur. The framework provides tools for reviewing and monitoring individual sectors. Information captured within the framework can also help in ameliorating problems in sectors likely to decline further. The need for further development research is also identified. Specifically at the level of the firm and network, there is a need to generate a more detailed framework of analysis of factors that contribute to successful processes of network management, learning and innovation, from which more detailed policy could be enacted in future.