A critical overview of privacy-preserving approaches for collaborative forecasting

Cooperation between different data owners may lead to an improvement in forecast quality—for instance, by benefiting from spatiotemporal dependencies in geographically distributed time series. Due to business competitive factors and personal data protection concerns, however, said data owners might be unwilling to share their data. Interest in collaborative privacy-preserving forecasting is thus increasing. This paper analyzes the state-of-the-art and unveils several shortcomings of existing methods in guaranteeing data privacy when employing vector autoregressive models. The methods are divided into three groups: data transformation, secure multi-party computations, and decomposition methods. The analysis shows that state-of-the-art techniques have limitations in preserving data privacy, such as (i) the necessary trade-off between privacy and forecasting accuracy, empirically evaluated through simulations and real-world experiments based on solar data; and (ii) iterative model fitting processes, which reveal data after a number of iterations.     

Adoption Subsidy Versus Technology Standards Under Asymmetric Information

Summary  Market-based instruments are believed to create more efficient incentives for firms to adopt new technologies than command-and-control policies. We compare the effects of a direct technology regulation and of an adoption subsidy under asymmetric information about the costs of technological advances in controlling the socially undesirable activities. We show that the policy maker may want to commit to her policy. The reason is that asymmetric information about adoption costs induces the policy maker to set subsidy levels that increase over time; firms, expecting higher subsidies in the future, postpone investment. Direct regulation offers a commitment possibility that allows to prevent firms from postponing investment. The research of the the first author was sponsored by the Netherlands Organization for Scientific Research NWO. We thank the participants of the First World Meeting of the Public Choice Society on March 29–April 1, 2007 in Amsterdam, and especially Frans van Winden, for comments.     

Examining the link between flexible working arrangement bundles and employee work effort

Empirical evidence regarding the link between flexible working arrangements (FWAs) and work effort is mixed, with the literature showing that some practices are linked to more while others to less work effort. In this study, we argue that this discrepancy may be due to the existence of different types of FWA bundles with potentially distinct effects on work effort. Using Understanding Society, a British national survey, and building on theories related to social exchange, the study examines the link between employee‐centered and employer‐centered FWA bundles, and work effort. This study further tests whether these relationships differ depending on employees' family responsibilities. Based on a sample of 13,834 employees, results show that both employee‐centered and employer‐centered FWA bundles are negatively associated with work effort, and findings for the latter bundle are more pronounced. These negative associations are somewhat stronger for employees with fewer family responsibilities. We infer that employees appear to use employee‐centered FWAs for their intended purpose, that is, to balance life and job demands, while they might perceive employer‐centered FWAs as unfair, resulting in less work effort in an attempt to restore fairness.     

Polarization,Political Instability and Active Learning*

In a multiperiod setting, decision‐makers can learn about the consequences of their decisions through experimentation. We examine how polarization and political instability affect learning through experimentation. We distinguish two cases: (i) the decision to be made is not salient and does not affect the outcome of subsequent elections (exogenous elections) and (ii) the decision is salient and the election outcome depends on it (endogenous elections). It is shown that while the possibility of learning increases activism, the existence of political instability distorts learning. Furthermore, we demonstrate that, when elections are exogenous, polarization between political parties does not always decrease active learning.     

Arbitrage violations and implied valuations: the option market

The ideas presented in this paper are those of the authors and not necessarily reflect the views of the National bank of Canada. Both authors thank the National Bank of Canada and the SSHRC of Canada for their help. Thanks are also due to Professor Y. Tian for his comments, and for participating, together with students of the Financial Engineering program at York University, in the data preparation and the execution of the Matlab programs. In this paper, we propose a necessary and sufficient condition for bid and ask prices of European options to be free of arbitrage, and derive from it an efficient numerical methodology to determine its satisfaction by a given set of prices. If the bid and ask prices satisfy the no-arbitrage (NA) condition, our methodology produces a vector of NA prices that lie between the bid and ask prices. Otherwise, our methodology generates a vector of arbitrage-free prices that is as close as possible, in some sense, to the bid–ask strip. The arbitrage-free prices detected by our methodology render the commonly used practice of using mid-points and then ‘cleaning’ arbitrage from them as unnecessary. Moreover, a vector of ‘cleaned’ prices obtained from mid-point prices may be outside the bid–ask spread even in an arbitrage-free market and, hence, in this case will not be representative of the current market. A new procedure of estimating implied valuation operators is also suggested here. This procedure is rooted in the economic properties of put and call prices and is based on Phillips and Taylor's approximation of a convex function. This approach is superior to common estimation techniques in that it produces an analytical expression for the implied valuation operator and is not data intensive as some other studies. Empirical findings for the new methods are documented and their economic implications are discussed.     

Pets at ecotourism destinations: cute mascot or trojan horse?

Alien species are threatening native fauna worldwide and cats and dogs have well-documented deleterious impacts on wildlife. Ecotourism operators often live and raise their pets in natural reserves. Here we discuss how pets add to the list of potential negative impacts of ecotourism and provide recommendations to control or attenuate such impacts.