Complexity and the limits to learning

In this paper we look at the manner in which ideas coming from complexity science change our understanding of the cognitive powers of agents that is really necessary to explain the evolution of markets and of firms. The general ideas behind complex systems dynamics and evolution are presented and then two examples are treated in detail. The first in an evolutionary model of a market in which some new product is developed by competing firms and their “task” is to find a strategy in terms of quality and price that will be sustainable. This essentially requires agents/firms to discover mutually compatible strategies, and to create thereby sustainable market niches. The second example considers the internal structure of firms, in terms of their constituent working practices and skills. It demonstrates that it is precisely their ignorance of the consequences of adopting any particular practice that generates diversity in the emergent capabilities of firms, exploring the dimension of potential demand and therefore leading to a successful and sustainable business sector. The work supports the notion that the cognitive abilities that are involved are not about deduction and logic, as a traditional view of rationality might suggest, but are about the development and contraction of interpretive frameworks, which will be different for each player. The paper links these examples to a general recognition of the idea that complex, multi-agent systems evolve through successive “structural attractors”—multi-dimensional dynamical systems—with temporary structural stability. Because real systems contain both the structure and deviations from it, then there is a constant probing of structural stability and the possibility of qualitative change to a new structural attractor. This resembles the ideas in biological evolution related to “punctuated equilibria,” but it also links this to the idea of emergent and evolving networks of interaction, never of course near thermodynamic equilibrium.      

Assessing the Impact of the ‘Decoupling’ Reform of the Common Agricultural Policy on Irish Farmers’ Off‐farm Labour Market Participation Decisions

This paper assesses the impact of the ‘decoupling’ reform of the Common Agricultural Policy on the labour allocation decisions of Irish farmers. The agricultural household decision‐making model provides the conceptual and theoretical framework to examine the interaction between government subsidies and farmers’ time allocation decisions. The relationship postulated is that ‘decoupling’ of agricultural support from production would probably result in a decline in the return to farm labour but it would also lead to an increase in household wealth. The effect of these factors on how farmers allocate their time is tested empirically using labour participation and labour supply models. The models developed are sufficiently general for application elsewhere. The main findings for the Irish situation are that the decoupling of direct payments is likely to increase the probability of farmers participating in the off‐farm employment market and that the amount of time allocated to off‐farm work will increase.     

The effect of external supply knowledge acquisition,development activities and organizational status on the supply performance of SMEs

Given the increasingly strategic role of external resources, acquiring knowledge about current suppliers and the broader supply market is an important and demanding task for the purchasing and supply management (PSM) function of a firm. Performance-improvement-oriented application of external supply knowledge present further challenges for the function. To examine this, we draw on the knowledge-based view and develop a hypothesized model in which supply knowledge acquisition drives PSM exploration and exploitation orientations which in turn mediate the organizational status of PSM function in terms of supply performance. We test the model on an SME-focused and survey-based dataset, using structural equation modelling. Our results indicate that an exploitative orientation is associated with knowledge gained from the supply base, whereas an explorative orientation is predominantly associated with supply market knowledge and less with supply base knowledge, suggesting natural pairings. The findings also show how an exploitative development orientation mediates the positive association of the PSM function's organizational status with supply performance. Driven by supply base knowledge, a status-empowered exploitative PSM orientation may suppress supply market based explorative orientation in resource-scarce SMEs, thus appearing to serve as the sole path to supply performance. Our research contributes by pointing out the significance of the knowledge-resource, and the knowledge-based view, in understanding performance in PSM.     

The problem of employees' network centrality and supervisors' error in performance appraisal: A multilevel theory

This article reveals an unexplored paradox for HR managers: the centrality of an employee in the social network benefits performance but hampers performance appraisal because it affects supervisors' rating errors. Central employees can be erroneously rated high on performance even when they are not high performers because supervisors tend to overappraise their performance. A distinction is made between rating precision, which depends on supervisors' uncertainty regarding employees' performance, and rating accuracy, which depends on supervisors' bias in favor of employees. Employee centrality is posited to be beneficial to precision but deleterious to accuracy because it regulates the diffusion of positive information, status, and power, all of which distort supervisors' capacity and motivation to accurately appraise performance. It is then argued that rating errors caused by network centrality affect aggregate perceptions of justice in organizations. When employees are highly connected to each other in a dense network, organizations have a strong and positive justice climate. Yet when some employees are more central than others in a centralized network, organizations have a negative and weak justice climate. The article contributes to the literature because it identifies an unexplored dark side of network centrality and offers recommendations for HR managers to cope with its deleterious consequences and for scholars to study them.     

Career mentoring in context: A multilevel study on differentiated career mentoring and career mentoring climate

This study explores how supervisor career mentoring contributes to contemporary organizational career development, which strives to foster employees' promotability while strengthening their intention to stay. Specifically, we focus on the implications of career mentoring in team contexts. Applying a multilevel framework, we distinguish between individual‐level differentiated mentoring (i.e., an employee's mentoring perceptions as compared to those of other team members) and group‐level career mentoring climate (i.e., the average perception across all group members). In a workplace setting, we collected data from vocational job starters (N ranged from 230 to 290) and their company supervisors (N ranged from 56 to 68). We find that career mentoring climate positively relates to promotability, more so than differentiated career mentoring. Both career mentoring climate and differentiated career mentoring are positively related to the intention to stay. At the individual level, this relationship is mediated by job satisfaction. We discuss theoretical and practical implications of differentiated and group‐level mentoring.     

Key impact factors of visitors’ environmentally responsible behaviour: personality traits or interpretive services? A case study of Beijing’s Yuyuantan Urban Park,China

The environmentally responsible behaviour (ERB) facilitates the sustainability of tourism destinations. This study aims to identify the key impact factors to promote visitors’ ERB in urban park and examine the impact mechanism. A total of 567 visitors were surveyed in Beijing’s Yuyuantan Urban Park. Structural equation modelling results indicate that personality traits are the most important factors that affect visitors’ ERB, while the effect of how satisfaction with interpretive services plays upon visitors’ ERB using place attachment as a mediator. Openness traits positively affect satisfaction with experiential services and general behaviour. Additionally, implications in urban park management are provided.     

Establishing the validity of cycle path capacity assumptions in the Highway Capacity Manual

Cycle mode share increase is widely desired, but highway design practitioners lack the numerical tools to deliver infrastructure, instead relying on design standards and intuition, with little literature basis. As a case in point, the US Highway Capacity Manual (which is well used internationally) has developed levels of service for cycle infrastructure that are, at their core, based on an assumption of noninteraction between multiple cyclists. This paper uses a modified implementation of the Social Force Model to test the validity of this assumption. Necessary changes such as the consideration of acceleration characteristics and minimum maintainable speed are included. The resulting model produces valid outcomes in keeping with established traffic flow properties, reflecting three-phase traffic flow theory and the ability for the stochastic elements in traffic flow to cause flow breakdown. The developed simulation indicates that there is a fundamental difference in outcome if cyclists are assumed to have a fixed speed versus one they can change given their surroundings. This difference in outcomes is found to exist within the range of literature design flow capacities for bicycle infrastructure and also yields emergent outcomes that align closely with those known behaviors of highway vehicles, which intuitively transfer to cyclists. These findings reinforce the standing need for large-scale empirical studies to determine the basic numerical and behavioral parameters for cyclists, upon which all design ultimately rests.     

The influence of attitudes towards healthy eating on food consumption when travelling

This study explores tourists' attitude towards healthy eating and its influence on their travel eating behaviour. Based on focus group interviews and literature review, two instruments were developed to measure healthy eating attitude and travel eating behaviour. Factor analysis results revealed two healthy eating attitude factors (‘food content and nutrients’ and ‘balanced diet and eating habit’), and five travel eating behaviour factors (‘novelty’, ‘risk avoidance’, ‘health steadfastness’, ‘familiarity’, and ‘food supplement and medicine’). The relationships among the factors were examined using structural equation modelling. The findings revealed that respondents who had a stronger attitude towards ‘balanced diet and eating habit’ tended to be more motivated by the ‘novelty’ factor; whereas ‘risk avoidance’, ‘health steadfastness’ and ‘familiarity’ were found to be associated with a stronger attitude towards ‘food content and nutrient’. The findings suggest that the healthy eating attitude construct is multidimensional and healthy eating conscious tourists should not be treated as a homogeneous group.     

Proximity and animal welfare in the context of tourist interactions with habituated dolphins

The long-term sustainability of wildlife tourism depends on integrating visitor demands with resource management, requiring an understanding of tourist motivation. Managing the conflict between access to the animals and welfare, however, may diminish the experience for tourists. This paper identifies trade-offs tourists are willing to make between access and animal welfare, associated with feeding habituated bottlenose dolphins (Tursiops sp.) in Monkey Mia, Western Australia. Using a choice modelling technique, we were able to determine monetary values of visitor experiences. Compared to the current guaranteed interaction with dolphins (and a daily resort entrance fee), respondents were willing to pay significantly higher hypothetical entrance fees to avoid a decrease in proximity to, or probability of, the dolphin interaction. However, negative impacts on dolphin welfare had a negative impact on visitor utility. Over 80% of visitors (n = 244) accepted management regulations resulting in decreased time with and proximity to dolphins, if those addressed welfare concerns and were communicated clearly. Thus, while visitors placed the greatest value on the proximity and predictability, they were willing to trade off these aspects if they improved dolphin welfare. We provide management suggestions based on these results.     

Pricing equity options everywhere

Finite difference methods are a popular technique for pricing American options. Since their introduction to finance by Brennan and Schwartz their use has spread from vanilla calls and puts on one stock to path-dependent and exotic options on multiple assets. Despite the breadth of the problems they have been applied to, and the increased sophistication of some of the newer techniques, most approaches to pricing equity options have not adequately addressed the issues of unbounded computational domains and divergent diffusion coefficients. In this article it is shown that these two problems are related and can be overcome using multiple grids. This new technique allows options to be priced for all values of the underlying, and is illustrated using standard put options and the call on the maximum of two stocks. For the latter contract, I also derive a characterization of the asymptotic continuation region in terms of a one-dimensional option pricing problem, and give analytic formulae for the perpetual case.