Linear programming,busing and educational administration

Linear programming and other operations research techniques have been used to assist school administrators and planners in assigning students to schools to achieve racial balances. A linear programming approach to the school busing problem is analyzed in some detail. Six different linear programming models allow examination of the effects of changes in the parameters of the models upon assignment of students. Various ways in which school officials may use the solutions to the models and the postoptimality analysis of the models for educational planning are discussed.     

Amnesties and Co-operation

One of the costs of anticipated amnesties is current and future non-compliance with the law. Relatively to a no-amnesty situation, efficient enforcement policies may therefore differ when an amnesty is offered. To study this question, a model is built in which individuals impose a cost on society when they commit a crime. When a criminal participates in an amnesty, or (to a lesser extent) when he is caught, some fraction of the social cost is recovered, reflecting co-operation with the authorities. The analysis characterizes efficient anticipated amnesties. It is shown that the efficient level of enforcement may be smaller in the case of an anticipated amnesty than in a no-amnesty situation. The reason is that despite the increase in the initial number of criminals generated by the amnesty, many criminals eventually participate in it. If participants in the amnesty are very co-operative, then a large proportion of the social cost is recovered making the initial increase in the number of criminals less costly. The optimal level of the reduced sanction imposed on those who participate in the amnesty is also characterized.     

Time,trading and algorithms in financial sector security

This article examines the financial security issues raised by the rapid development of high-frequency trading (HFT). HFT involves automated algorithmic trading of financial instruments where the objective is to reduce the time scale between the initiation and execution of trades to microseconds (or even nanoseconds) so as to reap competitive advantage. After outlining the contours of a HFT world, the presentation goes on to discuss some of its important consequences and implications. Several matters are discussed in this context: market manipulation, hacking, index construction and violence. Of particular significance for the notion of financial security is the issue of time as embodied in algorithmic trading. In turn this raises concerns over the regulation and management of this new field of financial innovation and trading activity.     

Product-based cultural change: Is the village global?

We provide a model of product-based cultural change where trade integration leads to cultural convergence. A standard trade model of Dixit–Stiglitz monopolistic competition is coupled with a micro-founded model of cultural dynamics. We show that access to varieties that are attached to a global cultural type changes the incentives of parents to socialize their children and transmit their type. The resulting increase in agents of the global cultural type leads to a magnification of the initial shock. A striking feature of the model is that even temporary shocks to openness may have permanent effects through the changing distribution of preferences in the economy.