Communicating production outcomes as gains or losses,operator skill and their effects on safety-related violations in a simulated production context

In this study, violation-producing conditions from an organizational and individual point of view are investigated. In concrete terms, framing effects of production outcome displays in relation to production goals, the risk of a technical accident, as well as person-related variables and their impact on violations are investigated based on the theoretical assumptions of prospect theory and risk-taking. It is assumed that violations are more likely when performance is below the aspiration level associated with an anticipated loss. A 2?×?3 factorial experimental design (n?=?118) was selected in accordance with the ‘Asian Disease’ decision scenario in the form of a computer-simulated task environment Simulation Waste Water Treatment. Participants acted out the role of a production supervisor running a plant. Experimental conditions were (1) the framing of individual performance outcomes in relation to the production goals in terms of losses or gains, and (2) the risk (20, 35, and 5%) with which an accident (a deflagration) might occur through using a corner-cutting procedure. A significant main effect of the framing conditions and no effect of risk conditions or interaction effect emerged. An additional path analysis shows the influence of risky decision-making and acquired skills in terms of knowledge of the safety-related procedure on a violation. In summary, violations are strongly affected by (a) framing effects of production outcomes when the performance is below the aspiration level and (b) person-related variables, in particular risky decision-making and skill. Results strongly emphasize that we found violation-producing conditions over and above what has so far been proposed and give rise to our claim that communicating production outcomes as gains and the increase of skill increases the likelihood of compliance with safety-related procedures.     

Modelling spikes and pricing swing options in electricity markets

Most electricity markets exhibit high volatilities and occasional distinctive price spikes, which result in demand for derivative products which protect the holder against high prices. In this paper we examine a simple spot price model that is the exponential of the sum of an Ornstein–Uhlenbeck and an independent mean-reverting pure jump process. We derive the moment generating function as well as various approximations to the probability density function of the logarithm of the spot price process at maturity T. Hence we are able to calibrate the model to the observed forward curve and present semi-analytic formulae for premia of path-independent options as well as approximations to call and put options on forward contracts with and without a delivery period. In order to price path-dependent options with multiple exercise rights like swing contracts a grid method is utilized which in turn uses approximations to the conditional density of the spot process.     

Foreign direct investment,political risk and the limited access order

The common explanations for political risk in foreign investment focus on the opportunism of host-country governments. However, when governments are too weak to regulate and effectively control them, domestic business elites may also cause political risk. In the literature on political risk, the host state is mostly modelled as a single, cohesive actor and elites outside of the government are not taken into account. By contrast, this paper conceptualises political risk as a lack of government assertiveness vis-à-vis domestic business elites, drawing on the limited access order (LAO) concept developed by Douglass North and his co-authors. It presents the case of Swedish Tele2’s investment in Russia. The mobile telecommunications provider was highly successful in Russia until it became a threat to the business interests of three Russian oligarchs. Regulatory agencies in Russia lacked the necessary authority to provide a level playing field in the telecommunications industry. They did not intervene when Tele2’s access to vital licenses was blocked by competitors, effectively squeezing the Swedes out of the Russian market. This paper concludes that in LAOs foreign investors are initially welcome, but political risk is high when the market competition with domestic elites becomes intense.     

Wirtschaftlicher Erfolg durch Informationsvorsprung — Unternehmensplanung mittels SAP/R3

Unter Verwendung der Standard-Software SAP R/3 l?sst sich eine integriert ablaufende Unternehmensplanung für ein Unternehmen mit Serienfertigung realisieren.     

A Comparison of Option Prices Under Different Pricing Measures in a Stochastic Volatility Model with Correlation

This paper investigates option prices in an incomplete stochastic volatility model with correlation. In a general setting, we prove an ordering result which says that prices for European options with convex payoffs are decreasing in the market price of volatility risk.As an example, and as our main motivation, we investigate option pricing under the class of q-optimal pricing measures. The q-optimal pricing measure is related to the marginal utility indifference price of an agent with constant relative risk aversion. Using the ordering result, we prove comparison theorems between option prices under the minimal martingale, minimal entropy and variance-optimal pricing measures. If the Sharpe ratio is deterministic, the comparison collapses to the well known result that option prices computed under these three pricing measures are the same.As a concrete example, we specialize to a variant of the Hull-White or Heston model for which the Sharpe ratio is increasing in volatility. For this example we are able to deduce option prices are decreasing in the parameter q. Numerical solution of the pricing pde corroborates the theory and shows the magnitude of the differences in option price due to varying q.JEL Classification: D52, G13     

VALUATION OF FLOATING RANGE NOTES IN LÉVY TERM-STRUCTURE MODELS

Turnbull (1995) as well as Navatte and Quittard-Pinon (1999) derived explicit pricing formulae for digital options and range notes in a one-factor Gaussian Heath–Jarrow–Morton (henceforth HJM) model. Nunes (2004) extended their results to a multifactor Gaussian HJM framework. In this paper, we generalize these results by providing explicit pricing solutions for digital options and range notes in the multivariate Lévy term-structure model of Eberlein and Raible (1999) , that is, an HJM-type model driven by a d -dimensional (possibly nonhomogeneous) Lévy process. As a byproduct, we obtain a pricing formula for floating range notes in the special case of a multifactor Gaussian HJM model that is simpler than the one provided by Nunes (2004) .     

Decomposing the German East–West wage gap

Wages in East Germany are persistently lower than in West Germany. We study the micro‐level determinants of this spatial wage gap, using an Oaxaca–Blinder decomposition and rich linked employer–employee data. In total, up to one half of the aggregate wage differential can be attributed to structural differences in worker, establishment and regional characteristics. Regional price and establishment size differentials alone account for one quarter of the wage gap at the median. Price level differentials are even more relevant towards the top of the wage distribution. Towards the bottom, differences in union coverage become more important. Our findings are quite stable over the period from 1996 to 2010.     

On the valuation of compositions in Lévy term structure models

We derive explicit valuation formulae for an exotic path-dependent interest rate derivative, namely an option on the composition of LIBOR rates. The formulae are based on Fourier transform methods for option pricing. We consider two models for the evolution of interest rates: an HJM-type forward rate model and a LIBOR-type forward price model. Both models are driven by a time-inhomogeneous Lévy process.     

The economic effects of health care systems on national economies: an input-output analysis of Slovenia

This paper estimates the size of the economic impact generated by the Slovenian health care sector on the national economy in the 2009–2014 period. The study separately calculates output, income, employment, value-added and import multipliers for the Slovenian health care sector based on input-output analysis covering 49 sectors. Initially, values of simple output multipliers for all years are estimated. When the re-circulation of final demand through households is added to the direct and indirect economic effects, the values of total output multipliers considerably exceeds 2. The results suggest that an additional million EUR of final demand in the health care sector will, based on different scenarios, increase the total employment by 20 to 30 units. Moreover, the type II employment multipliers imply that under the best-case scenario one employee in the health care sector creates an additional 0.7 unit of employment in remaining structures of the observed economy. Stability evaluation of the derived multipliers suggests that the domestic health care sector may reduce volatilities in production, income and employment and consequently act as an important shock absorber in the economy.