Multi-agent technologies in economics

This paper summarizes some of the trends in the use of multi-agent technologies in economics. Multiple agent systems, fuzzy sets and neural networks are critical tools used to investigate the emerging economics research agenda related to data mining, dynamic markets stock selection and bank stress testing. This paper reviews the contributions of four such examples.     

The role of the enhanced carry to risk on currency policy: the Mexican Peso

One of the most common measures of carry trade attractiveness is the carry-to-risk ratio. On analysing the speculative activity, this ratio presents two issues: First, emerging market currencies could merit a legitimate risk premium in a carry trade strategy due to the sovereign risks involved. In order to correct the measure, we include the credit risk in the measure using credit default swaps. Second, we gather more information about potential volatility asymmetries including a directional speculation indicator known as the risk reversal. We prove that the enhanced measure for the Mexican peso (MXN) is well represented by an ARIMA model with appropriate features since 2009. Due to the output of the analysis, we deduce that the Bank of Mexico might use this measure or a similar indicator, not only to understand the attractiveness of the carry trade strategy but to curb destabilizing carry trade activities. The case is compelling for the Mexican peso due to its dual role as emerging market currency and full convertible currency. We conclude that this institution may effectively manage the enhanced carry-to-risk measures in order to achieve financial stability and proper exchange credibility, and recognize its potential utility for other central banks.     

The digital transformation of work: A relational view

Conversation about the current and potential effects of digital technologies on the nature of work is raging within scholarly and practitioner communities. Artificial intelligence, robotics, data analytics, digital platforms, and automation, among other technologies, are prompting a swift and profound transformation of work. Building on Pierpaolo Donati's relational sociology, we examine the changes these technologies are likely to bring about in work as a human relation. Despite the very real threats of unemployment, job insecurity, precariousness, and surveillance, technology may also encourage the emergence of a work culture that shifts the scales toward a relational realm rather than a transactional one. To this end, we argue that work should be understood as a social relation with four dimensions: exchange value, intrinsic extra‐economic purpose, communication for reciprocal services, and correspondence with primary human needs according to use values. Understanding the digital transformation of work from this point of view requires comprehending the differentiation and integration of these four dimensions.     

DOES CULTURE AFFECT ELECTORAL OUTCOMES? EVIDENCE FROM TRANSITION COUNTRIES

Why do some societies fail to adopt “good” economic institutions? Recent literature points to the role of complementarities between social norms and proposed formal rules in advancing institutional change. To shed light on one potential mechanism, we track election performance of executive parties in up to 18 post‐communist democracies over 1991–2015 to test whether cultural attitudes influenced voters' response to market reform. We show that in more individualistic cultures, reform is associated with greater reward for the incumbent in the next election. The implication is that in democracies, voters select policies and institutions that are in line with prevailing culture. (JEL O17, P35, Z1)     

The opportunity to improve psychological competences of project managers in international businesses

Many projects are currently conducted in international businesses in which cultural issues play an important role. In‐depth analysis of the risks associated with the unknown of this type of issues offers companies a better understanding of how to focus their marketing tools to be more effective, and provides project managers with strategies to improve customer relationships. Hofstede's Cultural Dimensions and Meyer's Culture Map have demonstrated that every society possesses distinguishing features. These cultural theories serve as foundation for including the category of culture in a proposed Cultural Risk Breakdown Structure. Through a literature review, risks associated with cultural differences are identified in projects executed in Africa, China, and the Middle East. By linking these risks to cultural dimensions, it is possible to identify the psychological competences framework in international businesses. Therefore, the aim of this paper is to create not only a comprehensive record of these risks but also a list of the new skills and competences that project managers must possess to improve client satisfaction and make decisions in a cross‐cultural environment. By considering the association between psychological aspects and cultural issues, this analysis will be of considerable benefit for improving relationships in international contexts.     

Taking Bourdieu to the Shantytown

This essay extends Bourdieu's work on habitat–habitus and symbolic domination to the study of urban marginality. A full account of urban relegation should pay systematic attention to the environmental hazards to which the dispossessed are routinely exposed. Social science accounts of how domination works at the urban margins should place poor people's experience of time (and, particularly, of waiting) at their front and center.     

New perspective on customer orientation of service employees: a conceptual framework

Customer orientation of service employees (COSE) refers to the capacity and skills of employees to (1) identify, understand and satisfy their clients’ needs, and (2) act to that end. The COSE model has been used extensively to assess customer orientation of service employees within different settings. However, minimal modifications from the original have been presented so far, and the proposed settings were unrelated to highly relational services such as private banking (PB). PB is defined as the services specifically designed to satisfy the financial needs of high net worth individuals (HNWI); they are usually delivered by only one contact person – the private banker. Thus, PB is based on a personal and long-lasting relationship between the private banker and the client. Drawing on the literature regarding customer orientation and PB, trust, loyalty and word of mouth are identified as the potential consequences of COSE, improving on previous models. These new propositions are accompanied by a conceptual framework of COSE that is able to address the PB particularities by considering some moderating variables that are inherent to the PB service (customer segment and type of banking firm). Further avenues for research are then charted in light of the new conceptual framework developed.     

Location of public and private firms under endogenous timing of choices

This paper studies the choices of locations in a mixed duopoly when production costs are endogenously determined and the public firm maximizes a weighted sum of social surplus and its profits. We find that the locations of the two firms are decided simultaneously when the weight of the public firm’s profits in its objective function is high enough. When this is not the case we find that one firm (not always the public firm but sometimes also the private one) behaves as a leader in the choice of location and location decisions are made sequentially. Moreover, in equilibrium, the production cost of the public firm is never higher than that of the private firm.