The integration of human resource and operation management practices and its link with performance: A longitudinal latent class study

This paper reviews the literature on the association between lean production and performance. From this, propositions on the integration and evolution of operation and human resource management practices associated with the lean production concept are developed. Using 24 years of data on the use of seven core OM and HRM practices in British manufacturing firms, the potential link between integration in the use of practices and productivity is tested. In each year, three latent clusters are identified via ordered restricted latent class models; the cluster that consistently makes a more integrated use of practices outperforms the others. Furthermore, the longitudinal nature of the data permits modeling the growth curves of each practice in the sample, recognizing any similarity in growth and investigating whether or not an early integration in adoption of practices is associated with higher final productivity. The results show that pioneers are more productive, thus suggesting that the head start in integrating core OM and HRM practices associated with the lean production concept has paid off.     

Strategic merger waves: A theory of musical chairs

This paper proposes an explanation of merger waves based on the interaction between competitive pressure and irreversibility of mergers in an uncertain environment. A set of acquirers compete over time for scarce targets. At each point in time, an acquirer can either postpone a takeover attempt or raid immediately. By postponing the takeover attempt, an acquirer may gain from more favorable future market conditions, but runs the risk of being preempted by rivals. First, a complete information model is considered and it is shown that the above tradeoff leads to a continuum of subgame perfect equilibria in monotone strategies that are strictly Pareto ranked. All these equilibria share the feature that all acquirers rush simultaneously in merger waves. The model is then extended to a dynamic global game by introducing slightly noisy private information about merger profitability. This game is shown to have a unique Markov perfect Bayesian equilibrium in monotone strategies and the timing of the merger wave can thus be predicted. Last, the comparative dynamics predictions of the model are related to stylized facts.     

Sulla rigidita ‘della volatilita’ dell'ottimo portafoglio aleatorio al variare delle aspettative di mercato

Con riferimento al ben noto modello diagonale di Sharpe per le scelte di portafoglio, il presente lavoro si propone di fomire supporto teorico alla congettura (confermata da indagini sul mercato finanziario domestico) di una sostanziale rigidità della volatilità dell'ottimo portafoglio aleatorio al variare delle aspettative di mercato.

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Summary It is well known that one of the key theoretical supports to modern portfolio management derives from the so called diagonal model proposed by W. Sharpe.Precisely managers should build risky portfolios with high beta if the market is expected to rise and conversely with low betas if the market is expected to fall.Here on the contrary we discuss the theoretical bases of what seems to be a law of rigidity of the volatility of the optimal risky portfolio to variations ceteris paribus of the market expectations, quite likely prevailing on financial markets.Indeed this fact seems to be supported by empirical data regarding domestic stock market collected and discussed elsewhere (Stucchi 1988).This seems to suggest that the right response to change in market expectation is to change the bond-stock composition of the protfolio, rather then to act on the volatility of the stock (risky) portfolio.

     

Time of the essence

In most industries, ranging from information systems development to construction, an overwhelming proportion of projects are delayed beyond estimated completion time. This fact constitutes somewhat of a puzzle for existing theory. The present paper studies project delays and optimal contracts under moral hazard in a setting with time to build. Within this setup, project delays are found to be most likely to happen at early stages of development and intimately connected to the degree of commitment of the procurer and the class of contracts that can be enforced. The first-best, optimal spot contracting and optimal long-term contract scenarios are analyzed, as well as commonly encountered additional constraints on the long-term contract.     

Simultaneous Pooled Auctions

Suppose a seller wants to sell k similar or identical objects and there are n > k potential buyers. Suppose that each buyer wants only one object. In this case, we suggest the use of a simultaneous auction that would work as follows. Players are asked to submit sealed bids for one object. The individual with the highest bid chooses an object first; the individual with the second-highest bid chooses the next object; and this process continues until the individual with the kth highest bid receives the last object. Each individual pays the equivalent to his or her bid. When objects are identical, we show that the proposed auction generates the same revenue as a first-price sealed-bid sequential auction. When objects are perfectly correlated, there is no known solution for sequential auctions, whereas we can characterize bidding strategies in the proposed auction. Moreover, the proposed auction is optimal (given an appropriately chosen reserve price), and it may be easier and cheaper to run than a sequential auction.     

Notes and Comments: An approximation of caplet implied volatilities in Gaussian models

Abstract It is market practice to quote interest rate derivatives traded “over the counter” in terms of their implied volatility. For this reason, the term structure of at-the-money cap volatilities as well as the volatility surface of at-the-money swaptions are directly observed. This paper analyzes the case of caps. Any analysis of these markets would most likely report two main facts. The first is that the level of the volatility is inversely related to the level of the interest rates. The second is that the term structure is either a decreasing or a humped function of maturity. For a reference, see Rebonato (2003) and Brigo and Mercurio (2001). Rebonato (2003) suggests that the structure of implied volatility is humped in periods of normal market conditions and decreasing when markets are “excited”. Interpreting and explaining such phenomena is indeed an interesting and important issue. Mathematics Subject Classification (2000): 91B70 Journal of Economic Literature Classification: E43, C13     

A network-based analysis of the impact of structural damage on urban accessibility following a disaster: the case of the seismically damaged Port Au Prince and Carrefour urban road networks

The magnitude 7.0 earthquake that struck Haiti in January 2010 led to an unprecedented effort in collecting and providing geographical information in support of humanitarian aid. Although most of the compiled datasets and generated maps were able to provide specific and detailed information regarding the location of damaged buildings and road interruptions, none or little information was available to describe the accessibility—or otherwise—of the urban space. Here we try to offer an alternative method to define the urban accessibility landscape in the aftermath of earthquake damage, by combining simple graph theory concepts and GIS-based spatial analysis to assess how the urban space accessibility decreases when the road network is damaged.     

Funding natural monopoly infrastructure expansion: auctions versus regulated uniform access prices

Journal of Regulatory Economics - This paper characterizes equilibrium behavior in an auction where firms bid a unit price in order to fund and gain access to a new piece of infrastructure. Firms...