Introduction: methodologies of bounded rationality

The modelling of bounded rationality is currently pursued by approaches that exhibit a wide diversity of methodologies. This special issue collects five contributions that discuss different methodological aspects of these approaches. In our introduction, we map the variety of methodological positions with respect to three questions. First, what kinds of evidence do the respective approaches consider relevant for modelling bounded rationality? Second, what kind of modelling desiderata do the respective approaches focus on? And third, how do the respective approaches justify the normative validity of bounded rationality? To broaden the picture, we not only discusss the five contributions of this issue, but also include relevant positions from the extant literature.     

EL inference for partially identified models: Large deviations optimality and bootstrap validity

This paper addresses the issue of optimal inference for parameters that are partially identified in models with moment inequalities. There currently exists a variety of inferential methods for use in this setting. However, the question of choosing optimally among contending procedures is unresolved. In this paper, I first consider a canonical large deviations criterion for optimality and show that inference based on the empirical likelihood ratio statistic is optimal. Second, I introduce a new empirical likelihood bootstrap that provides a valid resampling method for moment inequality models and overcomes the implementation challenges that arise as a result of non-pivotal limit distributions. Lastly, I analyze the finite sample properties of the proposed framework using Monte Carlo simulations. The simulation results are encouraging.     

Roles of actors in combining resources into complex solutions

Combining resources to develop complex solutions (e.g., products or services) involves a varied set of business actors. Research tends to assume that actors are more or less autonomous in combining the resources they use. Presenting findings from a study of the construction of the first two pre-discharge homes for patients with cognitive and motor disabilities, we show that the autonomy of the single actor in combining resources is limited and that resource combinations are collectively enacted. Consequently, the features of the emergent resource combinations depend on the set of actors involved. We also argue that each actor takes part in resource combination both as provider and as user of resources; the two roles imply different perspectives that lead to different focal points which, in turn, impact how resources interface. The two roles orient the conduct of parties and, as confronted in business relationships, they shape the development of business relationships and resource combinations.     

Measuring customer attractiveness

Various beneficial consequences can accrue when a customer is perceived to be an attractive customer, particularly in a business-to-business context. Opinions differ as to what makes for customer attractiveness and a number of different features have been suggested as contributing to it. Currently there exists no comprehensive view of what factors constitute customer attractiveness and how this may be valued, measured and evaluated. Drawing on various facets of customer attractiveness suggested in the literature, this paper seeks to delineate the customer attractiveness construct and develop an instrument to measure it. The paper concludes by discussing how the scale developed can be used as a tool to address some critical issues in assessing customer attractiveness.     

Political crises and the stock market integration of emerging markets

This paper investigates the role of political crises in explaining the degree of stock market integration in emerging markets over the period 1991-2006. Using the International Crisis Behavior database, which contains detailed information on political crises around the world, and employing data on more than 15,500 firms, we assess whether political crises affect stock market integration in 19 emerging markets in South and East Asia, Latin America, and Central and Eastern Europe. We conclude that crises with certain characteristics generally reduce the level of stock market integration in these regions. In particular, the beginning of a political crisis, its severity, the involvement of the US in the conflict, and the number of parties involved in a crisis all have impacts on the level of stock market integration in these markets.     

Europe's slums

This article is a personal view of current East European evolutions. The author proposes a vision of a split Europe and depicts the historical processes tracing out new frontiers across the continent. The features of the future European slums represent the extrapolation of some characteristics of the Romanian situation and of its difficulties of reintegrating into Western civilization. To the extent that this same situation is specific to the other ex-socialist states in the Balkan peninsula, they will share the common destiny of a separate development counter to Central and Western Europe, being pushed to the periphery of European civilization. The author's intention is to trigger the world through presenting a dystopia of a community doomed to live in the servants' quarters of the future European house.