From spending to understanding: Analyzing customers by their spending behavior

In customer segmentation, a common strategy is to use individual differences as a predictor of future behavior. Recent advances in data management in large financial institutions give an unprecedented and potentially powerful source of data for identifying such differences. We show that spending data can substantially help target the direct marketing of financial products, and constitutes new information, not captured by demographics. In particular, a systematic combination of this independent source and more traditional measures can enhance the predictive power of marketing research and improve the relationship with customers as illustrated in a direct mailing selection method which substantially raises response rates.     

Comparative Computer Approaches to Multi-Outlet Retail Site Location Decisions

This article explores alternative changes that could take place in the technology, methodology, and most importantly, the practice of locational decision-making, and is part of a larger scale project aimed at investigating the practical value of artificial intelligence (AI) techniques for strategic decision-making. The research involves comparing the effectiveness of a number of AI paradigms and modelling devices, both with each other and with more conventional computer models.     

Ethics in regulation

This paper was given as the opening address at the 13th Annual European Business Ethics Network Conference' held in Cambridge 12–14 September 2000. The Chairman of the Financial Services Authority, Howard Davies, first outlined the background to the present approach to financial regulation in the UK. He described the principle‐based regulatory regime which is now in the process of being implemented, and the role of rules, regulations and guidelines in making this effective. However, compliance is not sufficient; for the system to work there needs to be an ethical culture at the level of the organisation, and a commitment to integrity on the part of those who work in the sector. The Financial Services Authority aims to work with the industry to build individual and corporate responsibility.     

Regulators as ‘agents’: power and personality in risk regulation and a role for agent‐based simulation

We critically examine how evidence and knowledge are brokered between the various actors (agents) in regulatory decisions on risk. Following a précis of context and regulatory process, we explore the role power and personality might play as evidence is synthesised and used to inform risk decisions, providing a review of the relevant literature from applied psychology, agent‐based simulation and regulatory science. We make a case for the adoption of agent‐based tools for addressing the sufficiency of evidence and resolving uncertainty in regulatory decisions. Referring to other environmental applications of agent‐based decision‐making, we propose how an agent model might represent power structures and personality characteristics with the attending implications for the brokering of regulatory science. This critical review has implications for the structuring of evidence that informs environmental decisions and the personal traits required of modern regulators operating in facilitative regulatory settings.     

A Review of the Review

In 1997 a process started to review the 1988 Basel I Accord, which ultimately led to the Basel II Accord of June 2004. In this paper Sir Howard Davies, Director of the London School of Economics and Former Chairman of the Financial Services Authority, provides an analysis of this review process. Several issues related to the complexity and implementability of the Accord are discussed. Although the author thinks that Basel II has many appealing aspects (such as the three‐pillar framework), he argues that the outcome is very complicated, it took a very long time, and needs to be adapted in ways not originally envisaged. He calls for a "Review of the Review" to see what lessons can be learnt from the review process which might be helpful for the future.     

The Fall and Rise of Evidence in Criminal Justice

Practitioners within the criminal justice system have been cautious about claiming that their work with offenders directly impacts on the level of subsequent re-offending. This article provides an overview of the generation and use of evidence on effectiveness within the criminal justice system, particularly focusing on the supervision of offenders by the probation service. The article outlines the continuing debates about appropriate methodologies for evaluating effectiveness. It also describes some of the problems encountered in trying to get research evidence to have an impact on offender supervision practice. Finally, the strengths and weaknesses of the present move towards evidence-based criminal justice services are explored in order to provide learning opportunities for other public services.     

Forecasting in a large macroeconomic system

This paper examines the efficiency gains yielded from estimating multiple equation cointegrated systems as compared to their single equation counterparts. In particular, this paper is concerned with the ability of utilizing the cointegrating information to improve forecasting performance. Recently an inability to improve forecasts of real income once money demand error correction terms were introduced has been used to argue that the M2 relationship had broken down during the early 1990s. However, the results suggest that once the underlying responses of variables are more closely investigated, the behaviour of M2 has remained stable.     

Porter’s Competitive Advantage Of Nations: Time For The Final Judgement?

Porter's (1990) Competitive Advantage of Nations ( CAN ) was heralded on publication as a book which could build a bridge between the theoretical literatures in strategic management and international economics, and provide the basis for improved national policies on 'competitiveness'. This review of CAN draws on papers written since its publication to show that while it was enormously rich in its range and scope it fell far short of the claims made for it. That failure arose from a number of sources. Most fundamentally, there were elisions with respect to the object of the analysis which meant that explanations for productivity at national level became confused with explanations for industry level success in gaining market share. Second, there were fundamental misunderstandings of the factors which determine trade, particularly with respect to the principle of comparative advantage. Third, there were flaws in the methodology and mode of reasoning. Finally, the assertions which form the heart of CAN have been refuted. Sustained prosperity may be achieved without a nation becoming 'innovation-driven', strong 'diamonds' are not in place in the home bases of many internationally successful industries and inward foreign direct investment does not indicate a lack of 'competitiveness' or low national productivity. Policy-makers are left with a 'laundry list' on which to base simple SWOT-type analyses of their economies, but there is no reliable guide to policy. Developing countries in particular are inadvertently encouraged to pursue policies which might be harmful. Porter generalized inappropriately from the American experience, while confusing competition at industry level with trade at national level. CAN 's failure suggests that academicians of international business would be well advised to revisit the elementary economics of trade and growth before venturing too boldly into the field of policy.     

Labour markets, welfare, and the personal scope of employment law

The issues which confront those concerned with employment law,about the types of workers to whom employment laws apply, arehighly relevant to the subject of labour markets and welfare.The formulation and application of the personal categories ofemployment law is or involves a welfare allocation, often seenas a trade-off between welfare and efficiency. This articledescribe the basic legal framework for determining the personalscope of employment law in the UK, considers some recent adaptationsto that framework, engages in comparison with some continentalEuropean legal systems, examines empirical evidence about theworking of the personal categories of employment law, describesthe debate within the ILO about employment status and 'contractlabour', canvasses some ideas about the growth of complex workrelationships, and concludes by assessing a remaining task offurther refinement of theory in this area.