A set optimization approach to utility maximization under transaction costs

A set optimization approach to multi-utility maximization is presented, and duality results are obtained for discrete market models with proportional transaction costs. The novel approach allows us to obtain results for non-complete preferences, where the formulas derived closely resemble but generalize the scalar case.     

Forecasting electricity spot prices using time-series models with a double temporal segmentation

The French wholesale market is set to expand in the next few years under European pressure and national decisions. In this article, we assess the forecasting ability of several classes of time-series models for electricity wholesale spot prices at a day-ahead horizon in France. Electricity spot prices display a strong seasonal pattern, particularly in France, given the high share of electric heating in housing during winter time. To deal with this pattern, we implement a double temporal segmentation of the data. For each trading period and season, we use a large number of specifications based on market fundamentals: linear regressions, Markov-switching (MS) models and threshold models with a smooth transition. An extensive evaluation on French data shows that modelling each season independently leads to better results. Among nonlinear models, MS models designed to capture the sudden and fast-reverting spikes in the price dynamics yield more accurate forecasts. Finally, pooling forecasts give more reliable results.     

Shared Value Through Inner Knowledge Creation

The notion of shared value presents business with a challenge: to generate social benefit and profit simultaneously. This challenge involves resolving tensions/paradoxes inherent when integrating the apparent contradictory elements of social and economic values. Unfortunately, resolving such tensions is difficult due to the habitual, automatic nature of sensemaking. This paper offers a mechanism whereby individuals can, over time, begin to overcome habitual sensemaking and potentially resolve tensions inherent in shared value. The mechanism is labeled inner knowledge creation (IKC). IKC is described and its role in creating shared value for businesses is illustrated through a conceptual model. The model shows how IKC develops metacognitive capabilities, builds capacities to resolve tensions/paradoxes, and cultivates openness to others’ perspectives.     

Hierarchies and Groups in DEA

Conventional applications of data envelopment analysis (DEA) presume the existence of a set of similar decision making units, wherein each unit is evaluated relative to other members of the set. Often, however, the DMUs fall naturally into groupings, giving rise first to the problem of how to view the groups themselves as DMUs, and second to the issue of how to deal with several different ratings for any given DMU when groupings can be formed in different ways. In the present paper we introduce the concept of hierarchical DEA, where efficiency can be viewed at various levels. We provide a means for adjusting the ratings of DMUs at one level to account for the ratings received by the groups (into which these DMUs fall) at a higher level. We also develop models for aggregating different ratings for a DMU arising from different possible groupings. An application of these models to a set of power plants is given.     

Electoral competition with uncertainty averse parties

John Nash's work laid the foundations for evolutionary game theory as well as the theory of games with rational agents. The Nash bargaining solution emerges as a natural solution concept in both of these settings.     

The dollar in the turmoil

We study the impact of the global financial crisis on the equilibrium exchange rate of the US dollar. We first simulate the impact of the crisis on the US net foreign asset position. Then, we calculate the equilibrium value of the dollar according both to a BEER and to a FEER approach. We find the case for a strong, although temporary, depreciation of the dollar even more acute than before the crisis. This suggests that the strength of the dollar in late 2008 and early 2009 may be short-lived.     

The role of domestic and cross-border venture capital investors in the growth of portfolio companies

This paper studies how the presence of cross-border as opposed to domestic venture capital investors is associated with the growth of portfolio companies. For this purpose, we use a longitudinal research design and track sales, total assets and payroll expenses in 761 European technology companies from the year of initial venture capital investment up to seven years thereafter. Findings demonstrate how companies initially backed by domestic venture capital investors exhibit higher growth in the short term compared to companies backed by cross-border investors. In the medium term, companies initially backed by cross-border venture capital investors exhibit higher growth compared to companies backed by domestic investors. Finally, companies that are initially funded by a syndicate comprising both domestic and cross-border venture capital investors exhibit the highest growth. Overall, this study provides a more fine-grained understanding of the role that domestic and cross-border venture capital investors can play as their portfolio companies grow and thereby require different resources or capabilities over time.     

HR practices and affective organisational commitment: (when) does HR differentiation pay off?

We argue that differentiating HR practices across employees leads employees to compare their situation with colleagues to assess the favourability of HR practice outcomes (e.g. money). These perceptions can be negative (i.e. feeling set back), neutral (i.e. feeling treated the same) or positive (i.e. feeling advantaged). Data from 13,639 Belgian employees showed that perceived favourability of HR practice outcomes is positively associated with affective organisational commitment, but the relationship is attenuated at positive levels. Thus, differentiation may be a double‐edged sword as the losses among employees feeling set back may temper, neutralise or even outweigh the benefits among those feeling advantaged. The relationships found were especially salient for work practices (e.g. autonomy) compared with economic practices (e.g. bonuses). Developmental practices were found to be least suited for differentiation across employees. No evidence of a moderating role of employees’ preference for equality (vs. differentiation) was found.