Do Venture Capitalists Add Value to Small Manufacturing Firms? An Empirical Analysis of Venture and Nonventure Capital‐Backed Initial Public Offerings

We examine a set of small, venture capital (VC)-backed manufacturing firms and compare it to a control sample of nonVC-backed manufacturing firms going public between 1990 and 1996. We use the degree of underpricing, three-year sales growth, three-year cumulative stock return, and three-year survivability as measures of success. First, we test if the presence of VC backing results in significant differences in success between the two samples. Next, we test if certain VC and deal characteristics are discriminators within the VC-backed sample of firms. Despite previous literature, which argues for either inferior or superior VC post-initial public offering (IPO) performance, these tests indicate no significant differences between VC- and nonVC-backed firms. Additionally, it is found that VC and deal characteristics are not discriminating factors within the VC sample.     

Optimal Consumption-Portfolio Policies With Habit Formation1

This is a companion paper to the authors ‘Asset Prices in an Exchange Economy with Habit Formation” in Econometrica which focuses on consumption demand and asset pricing when preferences are habit forming. Here we prove existence of optimal consumption-portfolio policies for (i) utility functions for which the marginal cost of consumption (MCC) interacts with the habit formation process and satisfies a recursive integral equation with forward functional Lipschitz integrand and (ii) utilities for which the MCC is independent of the standard of living and satisfies a recursive integral equation with locally Lipschitz integrand. Result (i) is demonstrated here for the first time. Result (ii) is novel and enables us to consider Cobb-Douglas utilities without placing lower bounds on the system of Arrow-Debreu prices. We also review and extend our earlier results in the linear case; in particular, we provide new insights about the structure of optimal portfolios. Additional new features of the model include the possibility of finite marginal utility of consumption at zero and habit formation mechanisms with stochastic coefficients. an extension to a financial market model with general processes is outlined. A byproduct of the analysis is a set of fixed-point theorems for recursive integral equations with forward functional Lipschitz or locally Lipschitz integrands.     

A multi-agent-based negotiation support system for distributed transmission cost allocation

We have developed a multi-agent system (MAS), based on the network flow model and KQML, called MASCAN, to support negotiations in the cost allocation of network transmission. This is very important to industries that have different entities connected with lines or pipes, such as the Internet and telecommunications. Such an approach is especially useful to the utility industries, such as electricity and gas, and the transportation industry. In the system, each agent represents a node in a network, for example supplier or consumer. Agents do not receive any centralized controls or information from centralized sources to guarantee autonomy–a key requirement for the agent. In this all decisions are made locally based on the rules or knowledge that each agent has or captured to communicate or coordinate with other agents for the cheapest path under fair-play requirements. We also assume that each agent is rational, that is, one of the goals or objectives of agent decisions or movements is to minimize costs or increase profits. The solution to cost allocation is to search for the equilibrium point of a non-cooperative game subject to the given constraints, for example network capacity. We applied MASCAN to model and support the negotiation of cost allocation in power transmission, and the results and how this approach supported the process of negotiation are perceived to be closer to the real-world negotiation and the outcomes were accepted more easily by the participants. Copyright © 2001 John Wiley & Sons, Ltd.     

Endogenous change and the economic theory of regulation

This paper extends the economic theory of regulation to include endogenous regulatory change. It outlines conditions under which endogenously rising deadweight costs of regulation can alter the policy equilibrium, even if those rising costs are fully anticipated. Within this framework, alternative wealth redistribution mechanisms can alter the equilibrium path if they bias interest groups' organization costs asymmetrically. The history of natural gas regulation is broadly consistent with this theory.     

Industrial publicity: One of the best promotional tools

One of the most frequently forgotten and misunderstood promotional tools in industrial marketing is publicity. Yet most surveys rank editorial material in trade journals as one of the most important sources of information used by industrial customers in making buying decisions and evaluating products. This article discusses how industrial marketers can use publicity as an effective promotional tool, with emphasis on its major advantages, namely, high credibility and low cost per contact.     

Frontiers of futures research: What's next?

This paper describes some important frontiers of futures research with the aim of identifying new opportunities for improving the value and utility of the field. These frontiers include the exploration and/or the reexamination of

(a) Potential for integrating new technology with futures research methods,

(b) Ways to reduce the domain of the unknowable,

(c) Ways to account for uncertainty in decision making,

(d) Strategies for planning and management of nonlinear systems operating in the chaotic regime,

(e) Ways to improve understanding of psychological factors that lead to irrational decisions

(f) Appropriate levels of aggregation in investigation of forecasting problems.

(g) The potential offered by new sources of social data.

Future issues of science and technology

The Millennium Project involved 237 scientists, futurists, and policymakers around the world in a two-round Delphi on the future issues of science and technology (S&T) over the next 25 years. This is the first of a 3-year study. The study began by asking science attaches to Washington, DC, what questions were worth asking to their leading scientists and issues that were important to explore on an international basis. A series of questions were identified and rated. Actions to address the questions were also suggested and rated. The results are presented in this paper with some regional differences discussed. The next year of the study interviewed S&T policymakers for the management and policy implications of these findings, and the third year developed scenarios based on these implications.     

Providers’ affiliation,insurance and collusion

This paper provides a theoretical analysis of the benefits for an insurance company to develop its own network of service providers when insurance fraud is characterized by collusion between policyholders and providers. In a static framework without collusion, exclusive affiliation of providers allows insurance companies to recover some market power and to lessen competition on the insurance market. This entails a decrease in the insured’s welfare. However, exclusive affiliation of providers may entail a positive effect on customers’ surplus when insurers and providers are engaged in a repeated relationship. In particular, while insurers must cooperate to retaliate against a fraudulent provider under non-exclusive affiliation, no cooperation is needed under exclusive affiliation. In that case, an insurer is indeed able to reduce the profit of a malevolent provider by moving to collusion-proof contracts when collusion is detected, and this threat may act as a deterrent for fraudulent activities. This possibility may supplement an inefficient judicial system: it is thus a second-best optimal anti-fraud policy.