Market efficiency and cointegration: Some evidence in Pacific-Basin black exchange markets

This paper investigates the efficiency of the black exchange markets in Indonesia, Malaysia, the Philippines, South Korea, Taiwan, and Thailand. The study applies unit root and cointegration tests to examine black exchange market efficiency of Pacific-Basin countries. The generating process of black exchange rates appears to be a random walk. This is consistent with Gupta (1981) and other foreign exchange rate unit root test studies. Johansen cointegration tests are performed for these black exchange markets together with Japan and Singapore. The results suggest that there is at least one unit root among the black market exchange rates. Hence, black exchange markets are not collectively efficient.     

Regulating B2B online reverse auctions through voluntary codes of conduct

In response to real and perceived abuse by market makers, buyers, and sellers, some industry trade groups representing suppliers have developed voluntary codes of conduct, white papers, and other forms of guidance for online reverse auction participants. The intent of these guidelines is to improve both the reverse auction process and relationships between buyers and sellers. This paper examines the rationale for creating guidelines and codes of conduct, and examines their efficacy in regulating reverse auctions to achieve improved outcomes for market makers, buyers, and sellers. Data from primary and related secondary sources indicate that industry-specific codes of conduct and guidelines have not had a favorable impact.     

Group decision-making: Head-count versus intensity of preference

This paper puts forth a framework for reshaping the group decision-making process. The proposed framework extends from the usual one-issue-at-a-time decision-making to one that involves several related issues simultaneously. Weaknesses of the traditional majority voting mechanism are first identified, and then a different voting method that takes each individual voter's sentiment into account is discussed. Specifically, a decision-maker is asked to express his/her intensity of preference for the issues encountered. Three hierarchical structures—benefits, costs, and risks—are developed to evaluate the alternatives. Due to the nature of pairwise comparisons and synthesis, the proposed method is amenable to consensus building and has higher reliability and consistency. It can be used for candidate selection, e.g. governmental election, when a large population is involved. It is also effective for resource allocation and prioritization when a small group or business is concerned. We believe the proposed approach has potential for resolving deficiencies of the conventional voting mechanism, and can be applied to many real-world problems. Its implementation on the Internet is also discussed.     

Implications of variant efficiency measures for policy evaluations in UK higher education

Policy goals in UK higher education encourage the publicly funded universities to become more-specialised and larger in size without compromising output quality. Efficiency gains are expected to flow from this increased specialisation in accordance with universities’ comparative research and teaching strengths. Mergers to reap further gains from economies of scale are also being actively encouraged. Given this scenario, the paper investigates whether best-practice efficiency measurement based on data envelopment analysis (DEA) provides empirical support for the current policy goals. It also assesses whether such support is dependent on the specific type of efficiency measure used in the DEA modelling. This assessment finds that a selection of (nine) commonly used, variant efficiency measures generally support the current policy goals. The paper also uses the principal-agent framework to explore the issues involved in using computed DEA-based efficiency scores for policy evaluations and possible funding guidance in UK higher education. This highlights empirically how policy-makers and universities can have very different preferences about which efficiency measure is to be used for policy evaluations and possible funding guidance.     

Trust,terrorism, and technology

The development of civilization implies an evolution of complex trust mechanisms which integrate the social system and form bonds which allow individuals to interact, even if they are strangers. Key elements of trust are predictability of consequences and an evaluation of consequences in terms of self-interest or values. Values, ethics, and norms enhance predictability. The terrorist introduces an unpredictable event which has negative consequences, thus destroying trust. However, terrorist-like situations occur in day-to-day activities. Technology itself makes the world more interdependent and less predictable. Furthermore, technological accidents and disasters, which are also unpredictable and negative, may prompt individuals to perceive technology as if it were a terrorist. Louis H. Bluhm is Associate Professor of Sociology at the Mississippi State University. He has written several articles which have been published in Rural Sociology, and with P. M. Shingi he has written a chapter in a book.     

Terrorism and its impact on economic growth and technological innovation

Recent terrorist acts, in particular the 9-11 attacks in 2001, have created disruptions in the global economy. The short-term impact had been felt in the global tourism, airline industries, as well as the financial markets. While the global economy has recovered and is adjusting to the new global realities, the longer-term impact of heightened security risk across the world can be felt in the form of higher risk premiums in asset markets, as well as a shift of resources towards dealing with terrorism. Just as World War II had accelerated the development of nuclear energy as well as a major contributing factor in the genesis of Silicon Valley, the current war against terrorism will affect both the pace and trajectory of technology trends, as efforts are focused on developing technologies to combat terrorism. In this paper, we review the effects of the current war on terrorism in terms of its impact on the economy, the allocation of resources to R&D, and the trajectory of future R&D.     

The hidden value of air transportation infrastructure

Air transportation is a key strategic asset in that it provides access to markets and thereby enables the economic development of nations. Thus, in order to maintain their competitiveness in a global economy, countries must invest in air transportation infrastructure to ensure their ability to meet current and future demand for aviation services. The objective of this paper is to develop and illustrate a methodology for evaluating the strategic value of air transportation infrastructure, in particular the benefits associated with the ability to react quickly to changes in the market. The hypothesis is that by recognizing and taking advantage of this strategic value, it may be possible to design better policies for aviation infrastructure delivery.The methodology developed here uses system dynamics to model different strategies for infrastructure delivery. These strategies are defined by three variables: the amount of capacity increase, the time to deliver the capacity and the congestion threshold that triggers the need for capacity delivery. Monte Carlo simulation is used to take into account multiple sources of uncertainty. The model shows that a strategy of capacity delivery based on small increments and short response times can yield more benefits than strategies that consider large capacity increases and long response times. Furthermore, in the specific airport example considered here, it was found that a congestion threshold of 75% should be the trigger for capacity enlargements if strategies based on small capacity increments and 1 or 5 years to increase capacity are considered. The lesson for decision-makers is that congestion delays must be addressed with foresight.     

Hitting the Jackpot or Hitting the Skids: Entertainment, Poverty, and the Demand for State Lotteries

A bstract .   State-sponsored lotteries are a lucrative source of revenue. Despite their low payout rates, lotteries are extremely popular, particularly among low-income citizens. State officials laud the benefits of lottery proceeds and promote the fun and excitement of participation. This entertainment value is one explanation for lottery demand by the poor: individuals with lower incomes substitute lottery play for other entertainment. Alternatively, low-income consumers may view lotteries as a convenient and otherwise rare opportunity for radically improving their standard of living. Bad times may cause desperation, and the desperate may turn to lotteries in an effort to escape hardship. This study tests these competing explanations. We examine lottery sales data from 39 states over 10 years and find a strong and positive relationship between sales and poverty rates. In contrast, we find no relationship between movie ticket sales, another inexpensive form of entertainment, and poverty rates.     

A substitution orbit model of competitive innovations

Successful innovation and diffusion of technology can be attributed to the identification of the orbit of emerging new technologies that complement or substitute for existing technologies. This dynamism resembles the co-evolution process in an ecosystem. In an ecosystem, in order to maintain sustainable development, the complex interplay between competition and cooperation, typically observed in predator-prey systems, create a sophisticated balance. Given that an ecosystem can be used as a masterpiece system, this sophisticated balance can provide suggestive ideas for identifying an optimal orbit of competitive innovations with complement or substitution dynamism.Prompted by such a sophisticated balance in an ecosystem, this paper analyzes the optimal orbit of competitive innovations and, on the basis of an application of Lotka-Volterra equations, it reviews substitution orbits of Japan's monochrome to color TV system, fixed telephones to cellular telephones, cellular telephones to mobile Internet access service, and analog to digital TV broadcasting. On the basis of substitution orbits analyses, it attempts to extract suggestions supportive to identifying an optimal policy option in a complex orbit leading to expected orbit.Key findings include policy options that are effective in controlling parameters for Lotka-Volterra equations leading to expected orbit.     

Managing academic innovation in Taiwan: Towards a ‘scientific-economic’ framework

Since the passage of the Science and Technology Basic Law in 1999, Taiwanese universities have taken a more “scientific-economic” approach to protect and commercialize their research. This research mainly examines innovation activities such as patenting, licensing, and incubated startups in the context of Taiwanese higher education institutions (HEIs). The “scientific-economic” framework used to analyze the strategic aspects influencing these academic innovations includes (1) intellectual property managerial capabilities, (2) the strength of external industrial partnerships, (3) the university entrepreneurial orientation, and (4) government research policy. Four hypotheses were developed. Data were collected via a questionnaire with all 122 HEIs in Taiwan surveyed.The research reveals that the aspects of intellectual property managerial capability, HEI-industry partnerships, and academic entrepreneurial orientation are useful to distinguish the university's innovation performance on patent grants, licensing incomes, and firm incubation. Also, government support on research plays a moderating role in academic innovation. Managerial and policy implications for managing innovation effectively in universities were drawn.