Using qualitative types of risk assessments in conjunction with FRAM to strengthen the resilience of systems

Abstract

In this paper, we look into how some qualitative types of risk assessments can be used in conjunction with functional resonance analysis method (FRAM) to strengthen the resilience of systems. In FRAM, variation in relation to meeting specified functions is central, but risk and uncertainty considerations are not an integral part. We suggest to add to FRAM an assessment of the modelling choices and judgements using strength of knowledge considerations and a qualitative sensitivity analysis. In this way, an improved basis for assessing and strengthening system resilience with FRAM is established. We illustrate the idea with a simple example from the oil and gas industry.     

Teaching children and youths about risk and risk analysis: what are the goals and the risk analytical foundation?

Abstract

Work has recently been initiated to teach children and youths about risk and risk analysis, highlighting conceptual issues, risk assessment, risk communication, as well as risk management (decision-making). Using this work as a point of departure, this article provides a discussion of the foundation of this type of teaching: what do we wish to obtain, in short- and long-term perspectives, and what is the scientific risk analysis basis? Key pillars for the development of a scientific platform for such teaching is presented and discussed.     

Labor force participation and the discouraged worker effect

This article analyzes labor force participation with particular reference to the discouraged worker effect. Discouraged workers are those who will search for work when the labor market is tight but do not search for work when the labor market is slack because they consider their chances of finding a suitable job too low. The theoretical point of departure is a search model where the worker evaluates the expected utility of searching for work and decides to participate in the labor market if the expected utility of search exceeds the utility of not working. From this framework, we derive an empirical model for the probability that the worker will be out of the labor force, unemployed, or employed. The model is estimated on a sample of married and cohabitating women in Norway covering the period from 1988 to 2008. The results show that the discouraged worker effect is substantial. On average, about one-third of those who are out of the labor force are discouraged, according to our analysis.     

A METHOD FOR IMPROVED CAPITAL MEASUREMENT BY COMBINING ACCOUNTS AND FIRM INVESTMENT DATA

We propose a new method for estimating capital stocks at the firm level by combining business accounts information and investment data. The method also produces capital estimates at the sector or industry level by summing individual firms' capital stocks and appropriately inflating this sum to account for firms not included in the data set. Our approach has two major advantages compared with the much used Perpetual Inventory Method (PIM). First, long investment series are not necessary. Second, sector capital estimates are automatically adjusted for changes in the capital stock because of entry and exit of firms. While capital growth rates in Norwegian manufacturing were only 1 percent on average during 1993–2004 according to national accounts figures, our method yields much higher growth rates of 5.5 percent on average.     

Strategic and Cultural Misalignment: Knowledge Sharing Barriers in Project Networks

This article draws on theories from knowledge and project management to develop an understanding of how knowledge sharing is encouraged and hindered in the context of a multifirm network assembled to execute an innovative shipbuilding project. The empirical data are based on a qualitative case study, collected from in‐depth face‐to‐face interviews in China and Norway, with the key people from a ship owner, shipbuilder, and ship technology supplier. The research indicates three interesting findings: First, differences in organizational culture (not national culture) hamper knowledge sharing. Second, a strategic misalignment made knowledge sharing difficult. Third, protecting knowledge by patenting and secrecy barely influenced the knowledge sharing processes. Based on previous research and lessons learned from case study experience, we suggest a framework to analyze challenges and links in project networks.     

On the Evolution of Investment Strategies and the Kelly Rule--A Darwinian Approach

This paper complements theoretical studies on the Kelly rulein evolutionary finance by studying a Darwinian model of selectionand reproduction in which the diversity of investment strategiesis maintained through genetic programming. We find that investmentstrategies which optimize long-term performance can emerge inmarkets populated by unsophisticated investors. Regardless whetherthe market is complete or incomplete and whether states arei.i.d. or Markov, the Kelly rule is obtained as the asymptoticoutcome. With price-dependent rather than just state-dependentinvestment strategies, the market portfolio plays an importantrole as a protection against severe losses in volatile markets.