Choosing an optimal investment strategy: The role of robust pair-copulas based portfolios

This paper is concerned with the efficient allocation of a set of financial assets and its successful management. Efficient diversification of investments is achieved by inputing robust pair-copulas based estimates of the expected return and covariances in the mean-variance analysis of Markowitz. Although the whole point of diversifying a portfolio is to avoid rebalancing, very often one needs to rebalance to restore the portfolio to its original balance or target. But when and why to rebalance is a critical issue, and this paper investigates several managers' strategies to keep the allocations optimal. Findings for an emerging market target return and minimum risk investments are highly significant and convincing. Although the best strategy depends on the investor risk profile, it is empirically shown that the proposed robust portfolios always outperform the classical versions based on the sample estimates, yielding higher gains in the long run and requiring a smaller number of updates. We found that the pair-copulas based robust minimum risk portfolio monitored by a manager which checks its composition twice a year provides the best long run investment.     

Profit rate in the US, 1949–2007: a Markov switching assessment

The article investigates the growth in the general profit rate in the US during the 1949–2007 period with a Markov switching model. The evidence is consistent with a long swing with means displaying opposite signs under the two regimes (increasing or declining) and high degree of persistence within each regime. The results for this nonlinear approach reinforce previous empirical evidence that does not provide support for a systematic and declining tendency in profit rate as advanced in the Marxian literature.     

The development of Portuguese consumer law with special regard to conflict resolution

The paper reports about the considerable progress in Portuguese consumer law since the adoption of the Constitution of 1976. Portugal has adopted a frame-work legislation aiming at guaranteeing certain consumer rights as well as specific acts implementing EC consumer protection directives. Most important has been the institution of a system of consumer arbitration, based on an agreement negotiated between the Lisbon's townhall, Portuguese government, Portuguese business, and consumer associations. It is supported by the EC Portuguese government and Lisbon's townhall. Information, mediation, conciliation, and arbitration in the City of Lisbon are in the hands of a special arbitration centre (CACC) of which the author is the chairperson. The paper presents the first practical experiences of the centre.

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Die Entwicklung des portugiesischen Verbraucherrechts unter besonderer Berücksichtigung der Konfliktlösung

Zusammenfassung Der Beitrag berichtet über die rasante Entwicklung des portugiesischen Verbraucherrechts seit der neuen Verfassung von 1976. Ein Rahmengesetz und zahlreiche Sondergesetze garantieren einen umfassenden Rechtsschutz des Verbrauchers. Von besonderer Bedeutung ist die Entwicklung vereinfachter Konfliktlösungverfahren. Die Verfasserin berichtet ausführlich über die Erfahrungen des von ihr geleiteten Schiedszentrums für Verbraucherstreitigkeiten in Lissabon, das sie für ein gelungenes, verbreitungsfähiges Experiment hält. In letzter Zeit nimmt es sich auch grenzüberschreitenden Streitigkeiten an, insbesondere durch Abschlu\ einer Gegenseitigkeitsvereinbarung mit einer entsprechenden Einrichtung in Madrid.

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Isabel Mendes CabeÇadas has been Director of the Centro de Arbitragem de Conflitos de Consumo (CACC) since its founding in 1989.     

From hub to tourist destination – An explorative study of Singapore and Dubai's aviation-based transformation

The growth of air transport networks and deregulation have allowed small, low-populated places like Singapore and Dubai to become major international tourism destinations. Both have used tightly combined airline, airport and tourism strategies to help achieve this. Here we analyse developments in Singapore and Dubai by examining interactions between their airlines, airports, governments and tourism authorities, and how integrated management strategies leveraged their aviation traffic hubs to develop tourism destinations.     

An existence result for discontinuous games

We introduce a notion of upper semicontinuity, weak upper semicontinuity, and show that it, together with a weak form of payoff security, is enough to guarantee the existence of Nash equilibria in compact, quasiconcave normal form games. We show that our result generalizes the pure strategy existence theorem of Dasgupta and Maskin [P. Dasgupta, E. Maskin, The existence of equilibrium in discontinuous economic games, I: Theory, Rev. Econ. Stud. 53 (1986) 1-26] and that it is neither implied nor does it imply the existence theorems of Baye, Tian, and Zhou [M. Baye, G. Tian, J. Zhou, Characterizations of the existence of equilibria in games with discontinuous and non-quasiconcave payoffs, Rev. Econ. Stud. 60 (1993) 935-948] and Reny [P. Reny, On the existence of pure and mixed strategy equilibria in discontinuous games, Econometrica 67 (1999) 1029-1056]. Furthermore, we show that an equilibrium may fail to exist when, while maintaining weak payoff security, weak upper semicontinuity is weakened to reciprocal upper semicontinuity.