Controlling Corruption in Hierarchies

We re-examine alternative hierarchical designs for controlling corruption as studied by Bac (J. Comp. Econom.22,2:99–118), since his formulation of the principal's problem was incomplete. In a basic hierarchy, while collusion between a supervisor and his subordinate agent may prevent implementation of high corruption outcomes, the principal would be able to induce relatively low corruption outcomes. In a two-level decentralized supervision chain, internal collusion in the upper part always induces collusion at the bottom but not vice-versa. For nonincreasing returns-to-scale monitoring technologies, the principal prefers a decentralized hierarchy to a centralized hierarchy.J. Comp. Econom.,December 1997,25(3), pp. 322–344. Department of Economics and Accounting, University of Liverpool, Liverpool, L69 3BX, United Kingdom.     

Family planning availability and contraceptive use in rural Bangladesh: An examination of the distance decay effect

Using empirical data collected from a rural area of Bangladesh, this paper examines the effect of family planning availability on contraceptive use. The hypothesis is that the likelihood of contraceptive adoption is a function of accessibility to two different types of family planning service outlets (i.e. distance from these outlets has an impact on the use of contraception by married women of reproductive age, 15–49 yr). But the field data do not show a distance decay effect between availability and use of both clinical and non-clinical contraceptive methods. The observed effect is explained in terms of the presence of paved roads in the study area. The policy implications of this finding are discussed.     

Match‐Fixing in a Monopoly Betting Market

A monopolist bookmaker may set betting odds on a fairly even contest to induce match‐fixing by an influential corrupt punter. His loss to the corrupt punter is more than made up for by enticing enough ordinary punters to bet on the losing team. This result is in sharp contrast to competitive bookmaking, where even contests have been shown to be immune to fixing. The analysis also reveals a surprising result that the incidence of match‐fixing can dramatically fall when match‐fixing opportunities rise. This is shown by comparing two scenarios—when only one team is corruptible and when both are corruptible. For both teams corruptible, the bookmaker is uncertain about to which team the influential punter will have access, so carefully maneuvering the odds to induce match‐fixing is too costly.     

Biogeography based optimization for mining rules to assess credit risk

Financial institutions, by and large, rely on the use of machine learning techniques to improve the classic credit risk assessment model for reduction of costs, delivery of faster decisions, guaranteed credit collections, and risk mitigations. As such, several data mining and machine learning approaches have been developed for computation of credit scores over the last few decades. Moreover, the existing rule-based classification algorithms tend to generate a number of rules with a large number of conditions in the antecedent part. However, these algorithms fail to demonstrate high predictive accuracy while balancing coverage and simplicity. Thus, it becomes quite a challenging task for the researchers to generate an optimal rule set with high predictive accuracy. In this paper, we present an effective rule based classification technique for the prediction of credit risk using a novel Biogeography Based Optimization (BBO) method. The novel BBO in the context of rule mining is named as locally and globally tuned biogeography based rule-miner (LGBBO-RuleMiner). This is applied for discovering optimal rule set with high predictive accuracy from the dataset containing both the categorical and continuous attributes. The performance of the proposed algorithm is compared against a variety of rule-miners such as OneR (1R), PART, JRip, Decision Table, Conjunctive Rule, J48, and Random Tree, along with some meta-heuristic based rule mining techniques by considering two credit risk datasets obtained from University of California, Irvine (UCI) repository. It is found from the comparative study that the proposed rule miner in ten independent runs of ten-fold cross validation outperforms all of the aforesaid algorithms in terms of predictive accuracy, coverage, and simplicity.     

Antecedents of Taiwan Chinese Consumers’ Purchase Intentions Toward U.S.- and Japanese-Made Household Appliances

ABSTRACT

The purpose of this article is to understand the factors influencing Taiwan's Chinese consumers’ purchase intentions toward U.S. and Japanese household appliances. The authors attempt to develop and test a comprehensive model linking such purchase intentions to several constructs including Taiwan Chinese consumers’ openness to foreign cultures, consumer nationalism, product familiarity, traditional cultural values orientation, and product-country image. The result of analysis using structural equation modeling shows that consumer nationalism has a strong indirect effect on purchase intention via the product-country image construct. Taiwan Chinese consumers’ traditional cultural values orientation and openness to foreign cultures have direct effects on consumer nationalism and, hence, are important antecedents in explaining the purchase intentions toward foreign-made goods by Taiwan Chinese consumers. With the growing importance of the Chinese domestic market, this study provides international marketing managers with practical implications in important areas such as market segmentation, branding strategy, and market research and practices in the Chinese consumer market.     

On the performance of the ordinary least squares method under an error component model

Starting from the one-dimensional results by Wang et al (1994) we consider the performance of the ordinary least squares estimator in comparison to the best linear unbiased estimator under an error component model with random effects in units and time. Upper bounds are derived for the first-order approximation to the difference between both estimators and for the spectral norm of the difference between their dispersion matrices.     

More on phantom bidding

Summary. A phantom bidding model is analyzed for a sale auction. The following issues are addressed: the effects of phantom bidding on overall social welfare and buyers' profits. It is shown that social welfare may increase or decrease as the auctioneer switches from the fixed reserve price policy to phantom bidding. The buyers' profits will increase whenever social welfare increases. Received: November 4, 1998; revised version: February 8, 1999     

All-or-nothing verdict as a screening device

An adversarial model of criminal trial is considered with threeverdict choices—innocent, guilty of moderate crime, andguilty of serious crime. Depending on the parties' access toevidence and initial beliefs in the courtroom about the possiblecrimes, the judge may agree to the defendant's request to eliminatethe verdict of moderate crime from jury deliberation if theprosecution brings the charge of serious crime. Though thisall-or-nothing verdict choice confers the defendant some manipulativepower, it is shown that such verdict choice may also screenout an overstated charge of serious crime. Conditions are derivedunder which screening is effective and powerful enough to generate(ex-ante) efficiency gains.