Strategic job analysis

The application of job analysis techniques makes the implicit assumption that information about a job as it presently exists may be used to develop programs to recruit, select, train, and appraise people for the job as it will exist in the future. Given a rapidly changing internal and external world it is likely that many jobs will change in the future. This article reviews some new techniques that, when added to traditional job analysis procedures, may facilitate strategic planning for the development of personnel procedures such as selection and training. Examples of the new technique are presented, followed by a discussion of some topics requiring future thought and research.     

Is the performance of the dollar a random process?

It is still frequently argued that a random process would be the best way of predicting the DM/dollar exchange rate. In the following empirical analysis, however, Dr. Rolf Schneider comes to the conclusion that the behaviour of the dollar can be explained largely in terms of basic economic variables.     

Optimal portfolios when volatility can jump

We consider an asset allocation problem in a continuous-time model with stochastic volatility and jumps in both the asset price and its volatility. First, we derive the optimal portfolio for an investor with constant relative risk aversion. The demand for jump risk includes a hedging component, which is not present in models without volatility jumps. We further show that the introduction of derivative contracts can have substantial economic value. We also analyze the distribution of terminal wealth for an investor who uses the wrong model, either by ignoring volatility jumps or by falsely including such jumps, or who is subject to estimation risk. Whenever a model different from the true one is used, the terminal wealth distribution exhibits fatter tails and (in some cases) significant default risk.     

A tale of two Ginis in the US, 1921–2012

Following a methodology by Jantzen and Volpert (2012), we use IRS Adjusted Gross Income data for the US (1921–2012) to estimate two Gini indices representing inequality at the bottom and the top of the income distribution, and to calculate the overall Gini as a function of the parameters underlying the two indices. A steady increase in the overall Gini since the Second World War actually hides two different periods of distributional changes. First, the increase in inequality from the mid 1940s to the late 1970s is driven by rising inequality at the bottom of the income distribution that more than offsets a decrease in inequality at the top. The implication is that middle-income earners gained relative to high-incomes, and especially relative to low-income earners. Second, the rise in the Gini after 1981 is driven by rising inequality at the top. Third, top-driven inequality follows a U-shaped trajectory consistent with Piketty and Saez (2003, 2006). Fourth, the welfare effects of the different distributional changes behind increasing inequality can be evaluated in light of the Lorenz-dominance criterion by Atkinson (1970): we argue that the rise in inequality since 1981 is much more likely to be associated with a social welfare loss net of compensating growth.     

Die Rolle der Individual- und Massenmedien im Integrationsprozess von Jugendlichen mit Migrationshintergrund

Migrant’s media use is a growing research field in communication. This article offers an integrated view on the relationship of media use, adolescents’ identity development and social integration. Based on Hurrelmann’s conceptualization of (media) socialization, Esser’s integration theory and Keupp’s concept of identity development, this study deduces a theoretical framework for analyzing the importance of individual and mass media in the process of adolescent immigrant’s social integration. Empirically, an exploratory-qualitative survey consisting of eight group discussions and ten face-to-face interviews highlights the importance of the hybrid character of socialisatio in multi-cultural entities (community of origin and admission). The media’s role in this process is limited.     

Maximum entropy distributions inferred from option portfolios on an asset

We obtain the maximum entropy distribution for an asset from call and digital option prices. A rigorous mathematical proof of its existence and exponential form is given, which can also be applied to legitimise a formal derivation by Buchen and Kelly (J. Financ. Quant. Anal. 31:143–159, 1996). We give a simple and robust algorithm for our method and compare our results to theirs. We present numerical results which show that our approach implies very realistic volatility surfaces even when calibrating only to at-the-money options. Finally, we apply our approach to options on the S&P 500 index.     

Catch me if I fall: Cross-national differences in willingness to take financial risks as a function of social and state ‘cushioning’

Knowledge about the existence and source of national differences in willingness to take risks plays a vital role in ensuring successful communication, collaboration, and understanding across countries, from the personal to the organizational and political/social domain. The current study investigates differences in financial risk-taking willingness between countries as a function of social and state ‘cushioning’, i.e. the extent of a person’s social support network and the state’s social-safety support network. The study compares large-scale household data and self-reports on willingness to take financial risks across three countries differing in their state support networks: Austria, Italy and the United States. Results show that personal social support network size influences risk-taking willingness (social cushioning). Furthermore, and most notably, we find evidence of an interactive relationship between social and state cushioning. High state cushioning renders the influence of social cushioning on financial risk-taking willingness less important. Contributions to management and business practice as well as theory on the influence of personal distance to financial support on risk-taking willingness are discussed.     

Introduction to general equilibrium

This introduces the symposium on general equilibrium.     

Global models applied to agricultural and trade policies: a review and assessment

The continuing process of global integration bears implications for farmers and related supplying and processing industries in all parts of the world, but also for the rest of the world economy. An assessment of agricultural and trade policy impacts is bound to be complex and is often supported by quantitative modeling analysis. This article provides an assessment of the present state of applied modelling in the area of trade and agricultural policies. We provide in this paper a comparative assessment of alternative modelling approaches, considering a total of 16 partial equilibrium and general equilibrium models. The assessment includes theoretical modelling foundations, datasets employed and institutional aspects, such as model maintenance and dissemination of results. A typology of models is provided by structuring the assessment along a clear set of evaluation criteria.