baseline value specification and sensitivity analysis in multiattribute project portfolio selection abstract a key issue in applying multi attribute project portfolio models is specifying the baseline value a parameter which defines how valuable not implementing a project is relative to the range of possible project values in this paper we present novel baseline value specification techniques which admit incomplete preference statements and unlike existing techniques make it possible to model problems where the decision maker would prefer to implement a project with the least preferred performance level in each attribute furthermore we develop computational methods for identifying the optimal portfolios and the value to cost based project rankings for all baseline values we also show how these results can be used to i analyze how sensitive project and portfolio decision recommendations are to variations in the baseline value and ii provide project decision recommendations in a situation where only incomplete information about the baseline value is available

cost reduction competition and industry performance in many markets firms compete over time by expending resources with the purpose of reducing their costs sometimes the cost reducing investments operate directly on costs in many instances they take the form of developing new products that deliver what customers need more cheaply therefore product development can have the same ultimate effect as direct cost reduction in fact if one thinks of the product as the services it delivers to the customer in the way that lancaster pioneered then product development often is just cost reduction

section 337 and the protection of intellectual property in the united states the complainants and the impact under section 337 of the tariff act of 1930 a firm can challenge imports that infringe its u s intellectual property rights such as patents copyrights and trademarks based on publicly available information this paper examines the characteristics of firms that file complaints under section 337 and also evaluates how firms are affected by the outcomes we find a complaining firm compared with peer firms in the same industry is typically larger produces a more diverse range of products has invested more in intangibles and is no less profitable a finding of no violation significantly depresses the filing firm s profits compared to peers section 337 appears to protect innovators but its effectiveness in promoting more innovation cannot be demonstrated so clearly copyright 1996 by mit press

industrial policy and firm heterogeneity our concern in this paper is with firm specific industrial policy when r d subsidies or taxes are differentiated among firms the question arises as to which firms in an industry should receive such support we analyze a situation where firms differ in their r d technologies in two distinct ways in the costs of performing r d activities and in the output obtained from such activities we find that the optimal firm specific industrial policy is affected differently by the two sources of firm heterogeneity furthermore a change in a firm s r d productivity has an ambiguous effect on the optimal policy towards the firm jel classification o31 l52 f13

recent developments in consumer credit risk assessment consumer credit risk assessment involves the use of risk assessment tools to manage a borrower s account from the time of pre screening a potential application through to the management of the account during its life and possible write off the riskiness of lending to a credit applicant is usually estimated using a logistic regression model though researchers have considered many other types of classifier and whilst preliminary evidence suggest support vector machines seem to be the most accurate data quality issues may prevent these laboratory based results from being achieved in practice the training of a classifier on a sample of accepted applicants rather than on a sample representative of the applicant population seems not to result in bias though it does result in difficulties in setting the cut off profit scoring is a promising line of research and the basel 2 accord has had profound implications for the way in which credit applicants are assessed and bank policies adopted

the effects of human resource management practices on productivity a study of steel finishing lines the authors investigate the productivity effects of innovative employment practices using data from a sample of thirty six homogeneous steel production lines owned by seventeen companies the productivity regressions demonstrate that lines using a set of innovative work practices which include incentive pay teams flexible job assignments employment security and training achieve substantially higher levels of productivity than do lines with the more traditional approach which includes narrow job definitions strict work rules and hourly pay with close supervision their results are consistent with recent theoretical models which stress the importance of complementarities among work practices

international portfolio choice and political instability risk a multi objective approach abstract the benefits derived from international portfolio diversification into foreign nations including the less developed countries are well documented yet this practice is discouraged due to market imperfections such as political instability in practice nations may be differentiated further by many aspects such as border controls or political and social trends which constrain private transactions and financial decisions this paper attempts to examine 1 whether the home asset bias in a portfolio holding is associated with higher political instability risk and 2 to what extent international diversification among stocks in the presence of such risk outperforms domestic stock portfolios using alternative instability risk proxies in the context of a discrete time version of mean variance framework we corroborate the impact of this type of risk on international portfolio investment decisions

portfolio optimization with stochastic dominance constraints abstract we consider the problem of constructing a portfolio of finitely many assets whose return rates are described by a discrete joint distribution we propose a new portfolio optimization model involving stochastic dominance constraints on the portfolio return rate we develop optimality and duality theory for these models we construct equivalent optimization models with utility functions numerical illustration is provided

management of bureaucrats and public service delivery evidence from the nigerian civil service we study how the management practices bureaucrats operate under relate to the quantity and quality of public services delivered we do so exploiting data from the nigerian civil service for 4700 public sector projects we have hand coded independent engineering assessments of project completion rates and delivered quality we supplement this with a survey eliciting management practices for bureaucrats in the 63 civil service organizations responsible for these projects building on bloom and van reenen 2007 management practices matter a one standard deviation increase in bureaucrat s autonomy signi cantly increases project completion rates by 18 a one standard deviation increase in practices related to incentives monitoring of bureaucrats signi cantly lowers project completion rates by 14 we show the negative impacts of incentive provision monitoring arise because bureaucrats multi task and incentives are poorly targeted and because these management practices capture elements of subjective performance evaluation that leave scope for dysfunctional responses from bureaucrats to support a causal interpretation of our ndings we document the determinants of management practices and examine channels through which organizations might endogenously adjust management practices our results provide novel insights into how changes in how bureaucrats are managed can have potentially large impacts on public service delivery in a developing country context jel classi cation j33 j38 o20

managerial practices and student performance we study the effects of managerial practices in schools on student outcomes we measure managerial practices using the world management survey a methodology that enables us to construct robust measures of management quality comparable across countries we find substantial heterogeneity in managerial practices across six industrialized countries with more centralized systems italy and germany lagging behind the more autonomous systems canada sweden united kingdom and united states for italy we are able to match organizational practices at the school level with student outcomes in a math standardized test we find that managerial practices are positively related to student outcomes the estimates imply that if italy had the same managerial practices as the united kingdom the best performer it would close the gap in the math oecd pisa test with respect to the oecd average we argue that our results are robust to selection issues and show that they are confirmed by a set of iv estimates and by a large number of robustness checks overall our results suggest that policies directed at improving student cognitive achievements should take into account principals selection and training in terms of managerial capabilities

credit scoring for profitability objectives in consumer credit markets lending decisions are usually represented as a set of classification problems the objective is to predict the likelihood of customers ending up in one of a finite number of states such as good bad payer responder non responder and transactor non transactor decision rules are then applied on the basis of the resulting model estimates however this represents a misspecification of the true objectives of commercial lenders which are better described in terms of continuous financial measures such as bad debt revenue and profit contribution in this paper an empirical study is undertaken to compare predictive models of continuous financial behaviour with binary models of customer default the results show models of continuous financial behaviour to outperform classification approaches they also demonstrate that scoring functions developed to specifically optimize profit contribution using genetic algorithms outperform scoring functions derived from optimizing more general functions such as sum of squared error

firm size and the nature of innovation within industries the case of process and product r d the effect of firm size on the allocation of r d effort between process and product innovation is examined it is hypothesized that relative to product innovations process innovations are less saleable in disembodied form and spawn less growth this implies that the returns to process r d will depend more on the firm s output at the time it conducts its r d than the returns to product r d incorporating this distinction in a simple model the authors derive and test predictions about how the fraction of r d devoted to process innovation varies with firm size within industries

time to profit scorecards for revolving credit abstract this paper defines and models time to profit for the first time for credit acceptance decisions within the context of revolving credit this requires the definition of a time related event a customer is profitable when monthly cumulative return is at least one i e cumulative profits cover the outstanding balance time to profit scorecards were produced for a data set of revolving credit from a colombian lending institution which included socio demographic and first purchase individual characteristics results show that it is possible to obtain good classification accuracy and improve portfolio returns which are continuous by definition through the use of survival models for binary events i e either being profitable or not it is also shown how predicting time to profit can be used for investment planning purposes of credit programmes it is possible to identify the earliest point in time in which a customer is profitable and hence generates internal organic funds for a credit programme to continue growing and become sustainable for survival models the effect of segmentation on loan duration was explored results were similar in terms of classification accuracy and identifying organic growth opportunities in particular loan duration and credit limit usage have a significant economic impact on time to profit this paper confirms that high risk credit programmes can be profitable at different points in time depending on loan duration furthermore existing customers may provide internal funds for the credit programme to continue growing

research and development with asymmetric firm sizes this article presents a theoretical model of research and development r d competition among firms the goal of the model is to simultaneously explain two empirical observations pertaining to the persistence of dominantfirms small firms make a disproportionate share of major innovations while largefirms tend to spend more in absolute terms on r d than smallfirms do in the model here firms choose investment levels and r d project riskiness in equilibrium a large firm invests more than a smaller firm but by choosing safer r d projects makes fewer major innovations

on the equilibrium proportion of innovation and imitation abstract a game theoretic model is developed that analyses firms decisions concerning innovation and imitation it is shown that in a game of identical players an equilibrium between innovation and imitation exists this non cooperative equilibrium is globally stable if a sequential time structure is supposed however the equilibrium is not pareto efficient

the size distribution of innovating firms in the uk 1945 1983 a survey of 4 378 significant innovations shows that firms with fewer than 1 000 employees commercialized a much larger share than is indicated by their share of r and d expenditures innovations per employee have been consistently above average in firms with more than 10 000 employees and have become so in firms with fewer than 1 000 intersectoral variation in the size distribution of innovating firms can be explained as a function of r and d based technological opportunities and of technological ease of entry by user firms with principal activities outside the sector copyright 1987 by blackwell publishing ltd

a portfolio model for siting offshore wind farms with economic and environmental objectives abstract siting offshore wind farms is a complex problem due to the wake interactions between wind farms we develop a profit maximizing portfolio model based on underlying network models to track the wake effects through a series of wind farms our portfolio model optimizes the siting of wind farms considering multiple wind directions and wind speeds and performs better than simple decision heuristics excluding sites from the portfolio has nonlinear impacts on the profitability of the portfolio of sites in that areas excluded from consideration have greater impacts on profit if they are grouped together or aligned parallel to the prevailing wind direction the model can be readily adapted to include additional cost factors

innovation and industry evolution the theoretical literature on innovation has been concerned with a single innovation produced by a number of identical agents by contrast we consider a market in which one firm is the current incumbent while the remaining firms are challengers moreover we consider a sequence of innovations so that success does not imply that the successful firm reaps monopoly profits forever after but only until the next better innovation is developed we begin with a fully optimizing behavioral model and derive the equivalent of the schumpeterian process of creative destruction that is a firm enjoys temporary monopoly power but is soon overthrown by a more inventive challenger the essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary process the fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers goods the new methods of production or transportation the new markets the new forms of industrial organization that capitalist enterprise creates schumpeter 1942 pp 82 83

foreign ownership and technology adoption evidence from indian firms abstract firms in developing countries rely on foreign technology purchases to improve their technology we use a theoretical framework developed by katz and shapiro to examine the ongoing technology adoption behavior of foreign owned and domestic firms using firm level data on indian firms from 1989 to 1993 we test this theoretical model we find that foreign ownership firm size and market structure are among the variables that impact a firm s probability of adopting new technology we also find that the 1991 liberalization of technology transfer policies in india appears to have had a larger impact on foreign owned firms than domestic firms

choosing the competition and patent licensing this article examines licensing as a means of choosing the competitors which a patentee monopolist will face in the period after the patent expires the queue of entrants consists of two firms which differ in their relative strengths as competitors for example by size or level of marginal cost by structuring the industry to be composed of weak competitors the incumbent is able to prolong its dominant position in the industry after the patent expires examples are presented in which the evidence suggests that choosing the competition was an important motivation of the licensor s behavior

bayesian estimation of the global minimum variance portfolio in this paper we consider the estimation of the weights of optimal portfolios from the bayesian point of view under the assumption that the conditional distribution of the logarithmic returns is normal using the standard priors for the mean vector and the covariance matrix we derive the posterior distributions for the weights of the global minimum variance portfolio moreover we reparameterize the model to allow informative andnon informative priors directly for the weights of the global minimum variance portfolio the posterior distributions of the portfolio weights are derived in explicit form for almost all models the models are compared by using the coverage probabilities of credible intervals in an empirical study we analyze the posterior densities of the weights of an international portfolio

does competition among public schools benefit students and taxpayers tiebout choice among districts is the most powerful market force in american public education naive estimates of its effects are biased by endogenous district formation i derive instruments from the natural boundaries in a metropolitan area my results suggest that metropolitan areas with greater tiebout choice have more productive public schools and less private schooling little of the effect of tiebout choice works through its effect on household sorting this finding may be explained by another finding students are equally segregated by school in metropolitan areas with greater and lesser degrees of tiebout choice among districts

the performance and competitive effects of school autonomy this paper studies a recent british reform that allowed public high schools to opt out of local authority control and become autonomous schools funded directly by the central government schools seeking autonomy had only to propose and win a majority vote among current parents almost one in three high schools voted on autonomy between 1988 and 1997 and using a version of the regression discontinuity design i find large achievement gains at schools in which the vote barely won compared to schools in which it barely lost despite other reforms that ensured that the british education system was by international standards highly competitive a comparison of schools in the geographic neighborhoods of narrow vote winners and narrow vote losers suggests that these gains did not spill over

innovation and the persistence of monopoly abstract the auction framework enables us to highlight a crucial feature of many r d races the losing firm can recoup part but not the entirety of its r d investments this feature is shown to account for the marked differences in results obtained by gilbert and newbery and by reinganum when the firm investing the largest amount wins with certainty we establish the existence of a unique equilibrium neither firm employs a pure strategy and the incumbent wins more often than the challenger

the acquisition and commercialization of invention in american manufacturing incidence and impact abstract recent accounts suggest the development and commercialization of invention has become more open greater division of labor between inventors and innovators can enhance social welfare through gains from trade and economies of specialization moreover this extensive reliance upon outside sources for invention also suggests that understanding the factors that condition the extramural supply of inventions to innovators is crucial to understanding the determinants of the rate and direction of innovative activity this paper reports on a recent survey of over 5000 american manufacturing sector firms on the extent to which innovators rely upon external sources of invention our results indicate that between 2007 and 2009 16 of manufacturing firms had innovated meaning had introduced a product that was new to the industry of these 49 report that their most important new product had originated from an outside source notably customers suppliers and technology specialists i e universities independent inventors and r d contractors we also compare the contribution of each source to innovation in the us economy although customers are the most common outside source inventions acquired from technology specialists tend to be the more economically significant in term of their gross commercial value as a group external sources of invention make a significant contribution to the overall rate of innovation in the economy innovation policies both public and private should pay careful attention to the external supply of invention and the efficiency of the mechanisms affecting the relationships between inventors and innovators

an intelligent agent based fuzzy group decision making model for financial multicriteria decision support the case of credit scoring credit risk analysis is an active research area in financial risk management and credit scoring is one of the key analytical techniques in credit risk evaluation in this study a novel intelligent agent based fuzzy group decision making gdm model is proposed as an effective multicriteria decision analysis mcda tool for credit risk evaluation in this proposed model some artificial intelligent techniques which are used as intelligent agents are first used to analyze and evaluate the risk levels of credit applicants over a set of pre defined criteria then these evaluation results generated by different intelligent agents are fuzzified into some fuzzy opinions on credit risk level of applicants finally these fuzzification opinions are aggregated into a group consensus and meantime the fuzzy aggregated consensus is defuzzified into a crisp aggregated value to support final decision for decision makers of credit granting institutions for illustration and verification purposes a simple numerical example and three real world credit application approval datasets are presented

licensing in the theory of innovation this article analyzes licensing in a noncooperative r d game we ask two questions what are the incentives for licensing a production technology and what is the impact of licensing on the pattern of innovation and the consequent evolution of industry costs and market structure the gainsfrom trading information through licensing contracts are achieved through the replacement of inefficient production techniques the ex post incentive and the elimination of inefficient research expenditures the ex ante incentive in a duopoly the availability of licensing encourages research when the firms initial production technologies are close in costs and discourages research when initial costs are asymmetric

an analysis of cooperative research and development i analyze the effects of cooperative research whereby member firms agree to share the costs andfruits of a research project before they undertake it in this model industrywide agreements tend to have socially beneficial effects when the degree ofproduct market competition is low when there are r d spillovers in the absence of cooperation when a high degree of sharing is technologically feasible and when the agreement concerns basic research rather than development activities i show that a royalty free cross licensing agreement among any number offirms lowers the equilibrium level of innovation even though it increases the efficiency of r d through sharing

modelling profitability using survival combination scores abstract the paper presents the first empirical investigation of the relationship between present value of net revenue from a revolving credit account and times to default and to second purchase the analysis is based on the data for a store card which is used to buy white durable goods in germany it is demonstrated that there exists a relationship between the above given measures it appears that there is a scope for improving profit if an application for a store card is assessed by using a model which estimates the revenue and includes the survival probability of default and the survival probability of second purchase a survival combination model rather than merely a static probability of default predicted by a logistic regression

preference programming for robust portfolio modeling and project selection in decision analysis difficulties of obtaining complete information about model parameters make it advisable to seek robust solutions that perform reasonably well across the full range of feasible parameter values in this paper we develop the robust portfolio modeling rpm methodology which extends preference programming methods into portfolio problems where a subset of project proposals are funded in view of multiple evaluation criteria we also develop an algorithm for computing all non dominated portfolios subject to incomplete information about criterion weights and project specific performance levels based on these portfolios we propose a project level index to convey i which projects are robust choices in the sense that they would be recommended even if further information were to be obtained and ii how continued activities in preference elicitation should be focused the rpm methodology is illustrated with an application using real data on road pavement projects

scenario based portfolio selection of investment projects with incomplete probability and utility information abstract in the selection of investment projects it is important to account for exogenous uncertainties such as macroeconomic developments which may impact the performance of projects these uncertainties can be addressed by examining how the projects perform across several scenarios but it may be difficult to assign well founded probabilities to such scenarios or to characterize the decision makers risk preferences through a uniquely defined utility function motivated by these considerations we develop a portfolio selection framework which i uses set inclusion to capture incomplete information about scenario probabilities and utility functions ii identifies all the non dominated project portfolios in view of this information and iii offers decision support for rejection and selection of projects the proposed framework enables interactive decision support processes where the implications of additional probability and utility information or further risk constraints are shown in terms of corresponding decision recommendations

herding cats management and university performance using a tried and tested measure of management practices that has been shown to predict firm performance we survey nearly 250 departments across 100 uk universities we find large differences in management scores across universities and that departments in older research intensive universities score higher than departments in newer more teaching oriented universities we also find that management matters in universities the scores particularly with respect to provision of incentives for staff recruitment retention and promotion are correlated with both teaching and research performance conditional on resources and past performance moreover this relationship holds for all universities not just research intensive ones

deterrence by market sharing a strategic incentive for licensing the potential of an incumbent firm to retain its dominant position in a market is a focal point of the modem theory of industrial organization a recent literature examines this issue for markets in which challengers threaten an incumbent s position by engaging in research for a new technology richard gilbert and david newbery 1982 show that an incumbent firm with a firstmover advantage will preempt potential entrants by inventing a new technology slightly earlier than would its rivals in a stochastic r d therefore its introduction does not alter the decision to research when the pre innovation market is characterized by an incumbent and potential entrants stephen salant 1984 shows that licensing ex post to innovation can alter the research decision as anticipation of the returns from future licensing encourages research by the entrant as a counterpoint to the salant result i find that licensing ex ante to research may discourage further research by the entrant indeed this strategic incentive for licensing may be so strong as to persuade the incumbent as well as the entrant to terminate research activity to isolate this incentive for licensing from the one discussed by salant a simple model is constructed in which licensing of future technologies is not desirable anecdotal evidence suggests that the strategic incentive does lead innovators in some markets to license their technologies examples of this information sharing are prevalent in markets where technological change is rapid in the 1940 s standard oil of new jersey discovered a process for synthetic rubber it traded patent rights on this process for a synthetic oil production process discovered by farben a german rubber company in both the synthetic oil and synthetic rubber markets rival companies were department of economics scarsborough college university of toronto toronto ontario canada m5s lal i thank jon cohen and ron saunders for discussions that inspired this paper i am also grateful to yehuda kotowitz andy mclennan jennifer reinganum ralph winter myma wooders two anonymous referees and seminar participants at the university of toronto for helpful comments on earlier drafts

optimal strategies for selecting project portfolios using uncertain value estimates abstract practically all organizations seek to create value by selecting and executing portfolios of actions that consume resources typically the resulting value is uncertain and thus organizations must take decisions based on ex ante estimates about what this future value will be in this paper we show that the bayesian modeling of uncertainties in this selection problem serves to i increase the expected future value of the selected portfolio ii raise the expected number of selected actions that belong to the optimal portfolio ex post and iii eliminate the expected gap between the realized ex post portfolio value and the estimated ex ante portfolio value we also propose a new project performance measure defined as the probability that a given action belongs to the optimal portfolio finally we provide analytic results to determine which actions should be re evaluated to obtain more accurate value estimates before portfolio selection in particular we show that the optimal targeting of such re evaluations can yield a much higher portfolio value in return for the total resources that are spent on the execution of actions and the acquisition of value estimates

choice competition and pupil achievement choice and competition in education have recently found growing support from both policy makers and academics yet evidence on the actual benefits of market orientated reforms is at best mixed moreover although the economic rationale for choice and competition is clear in existing work there is rarely an attempt to distinguish between the two concepts in this paper we study whether pupils in primary schools in england with a wider range of school choices achieve better academic outcomes than those whose choice is more limited and whether primary schools facing more competition perform better than those in a more monopolistic situation in simple least squares regression models we find little evidence of a link between choice and achievement but uncover a small positive association between competition and school performance yet this could be related to endogenous school location or pupil sorting in fact an instrumental variable strategy based on discontinuities generated by admissions district boundaries suggests that the performance gains from greater school competition are limited only when we restrict our attention to voluntary aided schools which have more freedom in managing their governance and admission practices do we find some evidence of a positive causal link between competition and pupil achievement jel i20 h70 r5

on vertical relations and the timing of technology adoption we study the timing of new technology adoption in markets with input outsourcing and thus with vertical relations we find that technology adoption can take place earlier when firms engage in input outsourcing than when they produce the input in house hence the presence of vertical relations can accelerate the adoption of a new technology we also find that particular features of a vertically related market such as the distribution of bargaining power and the contract type through which trading is conducted can crucially affect the speed of technology adoption

incentives work getting teachers to come to school we use a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning in india in treatment schools teachers attendance was monitored daily using cameras and their salaries were made a nonlinear function of attendance teacher absenteeism in the treatment group fell by 21 percentage points relative to the control group and the children s test scores increased by 0 17 standard deviations we estimate a structural dynamic labor supply model and find that teachers respond strongly to financial incentives our model is used to compute cost minimizing compensation policies jel i21 j31 j45 o15

multiple criteria decision aiding for finance an updated bibliographic survey finance is a popular field for applied and methodological research involving multiple criteria decision aiding mcda techniques in this study we present an up to date bibliographic survey of the contributions of mcda in financial decision making focusing on the developments during the past decade the survey covers all main areas of financial modeling as well as the different methodological approaches in mcda and its connections with other analytical fields on the basis of the survey results we discuss the contributions of mcda in different areas of financial decision making and identify established and emerging research topics as well as future opportunities and challenges

does management matter in schools we collect data on management practices in over 1 800 high schools in eight countries we show that higher management quality is strongly associated with better educational outcomes the uk sweden canada and the us obtain the highest management scores followed by germany with a gap before italy brazil and india we also show that autonomous government schools government funded but with substantial independence like uk academies and us charters have higher management scores than regular government or private schools almost half of the difference between the management scores of autonomous and regular government schools is accounted for principal leadership and governance there are major disparities in the quality of education within and between countries oecd 2012 school managerial practices may be an important reason for such differences unfortunately understanding the role of management in schools within and across countries has been held back by a lack of robust and comparable instruments to systematically measure management practices and thus a lack of good data the key purpose of this article is to develop an international management index for schools and present descriptive evidence on management quality and education outcomes across schools of different types within and across countries we used double blind telephone interviews with school principals to collect information on management practices for over 1 800 schools across eight countries to construct our management index we average across 20 basic management practice measures in four areas of management operations monitoring target setting and people each question is evaluated against a scoring grid that ranges from one worst practice to five best practice our management index for each school represents the average of these scores we also constructed measures of school level pupil outcomes for these schools when data were available from examination results across regions and countries creating a matched management pupil outcome international data set at the school level these data allow us to document some stylised facts first we show that the adoption of basic managerial practices varies significantly across and within countries the uk sweden canada and the us obtain the highest average scores followed by germany italy and brazil while india has the lowest scores about half of the variance in school management is at the country level this share is larger in education than we have

is firm size conducive to r d choice a strategic analysis of product and process innovations abstract using a duopoly model of multiproduct firms we show that different innovation incentives cause the larger firm to invest more in process cost reducing innovations and the small one to allocate more resources to search for new products because of this heterogeneity of r d behavior the large firm remains dominant for the original product in the post innovation market but the small firm is more likely to be a leader in the new product market these theoretical results are consistent with recent empirical findings

the effects of generalized school choice on achievement and stratification evidence from chile s voucher program in 1981 chile introduced nationwide school choice by providing vouchers to any student wishing to attend private school as a result more than 1000 private schools entered the market and the private enrollment rate increased by 20 percentage points with greater impacts in larger more urban and wealthier communities we use this differential impact to measure the effects of unrestricted choice on educational outcomes using panel data for about 150 municipalities we find no evidence that choice improved average educational outcomes as measured by test scores repetition rates and years of schooling however we find evidence that the voucher program led to increased sorting as the bbestq public school students left for the private sector d 2005 elsevier b v all rights reserved

injecting charter school best practices into traditional public schools evidence from field experiments this study examines the impact on student achievement of implementing a bundle of best practices from high performing charter schools into low performing traditional public schools in houston texas using a school level randomized field experiment and quasi experimental comparisons the five practices in the bundle are increased instructional time more effective teachers and administrators high dosage tutoring data driven instruction and a culture of high expectations the findings show that injecting best practices from charter schools into traditional houston public schools significantly increases student math achievement in treated elementary and secondary schools by 0 15 to 0 18 standard deviations a year and has little effect on reading achievement similar bundles of practices are found to significantly raise math achievement in analyses for public schools in a field experiment in denver and program in chicago jel codes i21 i24 i28 j24

the impact of competition on management quality evidence from public hospitals in this paper we examine the causal impact of competition on management quality we analyze the hospital sector where geographic proximity is a key determinant of competition and english public hospitals where political competition can be used to construct instrumental variables for market structure since almost all major english hospitals are government run closing hospitals in areas where the governing party has a small majority is rare due to fear of electoral punishment we find that management quality measured using a new survey tool is strongly correlated with financial and clinical outcomes such as survival rates from emergency heart attack admissions ami more importantly we find that higher competition as indicated by a greater number of neighboring hospitals is positively correlated with increased management quality and this relationship strengthens when we instrument the number of local hospitals with local political competition adding another rival hospital increases the index of management quality by one third of a standard deviation and leads to a 10 7 reduction in heart attack mortality rates

stochastic dominance and expected utility survey and analysis while stochastic dominance has been employed in various forms as early as 1932 it has only been since 1969 1970 that the notion has been developed and extensively employed in the area of economics finance agriculture statistics marketing and operations research in this survey the first second and third order stochastic dominance rules are discussed with an emphasis on the development in the area since the 1980s

outsourcing education experimental evidence from liberia in 2016 the liberian government delegated management of 93 randomly selected public schools to private providers providers received us 50 per pupil on top of us 50 per pupil annual expenditure in control schools after one academic year students in outsourced schools scored 0 18 higher in english and mathematics we do not find heterogeneity in learning gains or enrollment by student characteristics but there is significant heterogeneity across providers while outsourcing appears to be a cost effective way to use new resources to improve test scores some providers engaged in unforeseen and potentially harmful behavior complicating any assessment of welfare gains

analyzing the evidence of an ipr take off in china and india abstract both china and india have been experiencing a historical take off in the use of intellectual property rights ipr in terms of trademark applications filed with domestic ip offices in 2009 the evidence demonstrates that china now ranks 1st worldwide and india 5th while for patent filings china ranks 3rd worldwide and india ranks 9th this performance is remarkable as both china and india experienced negligible demand for ipr protection as recently as two decades ago the ipr take up trends in these two countries are analyzed in detail highlighting the structure of patent and trademark demand since 1990 specifically the available series are broken down and analyzed according to i national versus foreign origin of patents and trademarks ii technological ipc and trademark nice classes and iii the major individual patent users in each country the data used refers to applications in the chinese and indian ip offices although the demand from residents of these two countries in both the international and other national systems is also assessed beyond the existing momentum in ipr registrations by china and india and their capacity to maintain it into the near future the paper addresses practical questions about the strategies motives and benefits behind the current trends in particular we seek to evaluate the capacity of both china s and india s national innovation systems to internalize the potential returns of this increasing demand for ipr the insight reached finds that should both china and india sustain their current ipr growth rates they will be able to catch up with the most advanced economies within the time span of a few decades

r d rivalry with licensing or imitation the authors study the rivalry between two firms to develop an innovation in a dynamic setting that allows for post development dissemination of the innovation such as licensing or imitation this dissemination may cause the noninnovating firm to benefit from the discovery when this occurs conventional results in the economics of r d no longer need apply they find that industry leaders will tend to develop minor innovations but will develop major innovations only if imitation is difficult copyright 1987 by american economic association

preemptive patenting and the persistence of monopoly this article takes a different tack and inquires whether institutions such as the patent system create opportunities for firms with monopoly power to maintain their monopoly power the results apply to other situations such as brand identification spatial location and capacity expansion which share the characteristic that early or preemptive actions may lower the returns to potential competitors

selecting a portfolio of solar energy projects using multiattribute preference theory this article reports a procedure developed to assist the u s department of energy in selecting a portfolio of solar energy applications experiments the procedure has also been used in other government procurements and appears to be applicable in a variety of project funding processes the technical quality of each proposed applications experiment was summarized through the use of multiple evaluation measures or attributes these were combined into a single index of the overall technical quality of an experiment through the use of a multiattribute utility function recently derived results in measurable value theory were applied to derive an index of the overall technical quality of a portfolio of experiments budgetary and programmatic issues were handled through the use of constraints this approach allowed the portfolio selection problem to be formulated as an integer linear program details of the application are presented including a discussion of the data requirements and assessment procedure used the portfolio selection procedure was successfully applied and variations of it have been successfully used in four other solar energy procurements

product innovation incentives by an incumbent firm a dynamic analysis we employ a dynamic framework to study how product innovation activities of a firm are influenced by its investments in production capacity of an established product and vice versa the firm initially has capacity to sell an established product additionally it also has the option to undertake an r d project which upon completion allows the firm to introduce a new vertically and horizontally differentiated product to the market thereby extending its current product range the breakthrough probability of detecting the new product depends on both the value of the firm s r d stock and its current r d investment it is shown that the initial production capacity for the established product influences the intensity of r d activities of the firm in particular there are constellations such that for large initial production capacity for the established product the firm never invests in r d and the new product is never introduced for small initial capacity the firm keeps investing in r d implying that eventually the new product is always introduced finally for an intermediate range of initial capacity levels the firm initially invests in product r d but then reduces these investments to zero in this scenario the new product is introduced with a positive probability which is however substantially smaller than 1 from a technical perspective this analysis gives the example of a new type of skiba threshold phenomenon in the framework of a multi mode optimization model

inputs incentives and complementarities in education experimental evidence from tanzania we present results from a large scale randomized experiment across 350 schools in tanzania that studied the impact of providing schools with i unconditional grants ii teacher incentives based on student performance and iii both of the above after two years we find i no impact on student test scores from providing school grants ii some evidence of positive effects from teacher incentives and iii significant positive effects from providing both programs most important we find strong evidence of complementarities between the programs with the effect of joint provision being significantly greater than the sum of the individual effects our results suggest that combining spending on school inputs the default policy with improved teacher incentives could substantially increase the cost effectiveness of public spending on education

accountability and flexibility in public schools evidence from boston s charters and pilots charter schools are publicly funded but operate outside the regulatory framework and collective bargaining agreements characteristic of traditional public schools in return for this freedom charter schools are subject to heightened accountability this paper estimates the impact of charter school attendance on student achievement using data from boston where charter schools enroll a growing share of students we also evaluate an alternative to the charter model boston s pilot schools these schools have some of the independence of charter schools but operate within the school district face little risk of closure and are covered by many of same collective bargaining provisions as traditional public schools estimates using student assignment lotteries show large and significant test score gains for charter lottery winners in middle and high school in contrast lottery based estimates for pilot schools are small and mostly insignificant the large positive lottery based estimates for charter schools are similar to estimates constructed using statistical controls in the same sample but larger than those using statistical controls in a wider sample of schools the latter are still substantial however the estimates for pilot schools are smaller and more variable than those for charters with some significant negative effects

second mover advantages in the strategic adoption of new technology under uncertainty abstract this paper introduces technological uncertainty into a timing game of new technology adoption it is shown that the timing neither necessarily involves first mover advantages in precommitment equilibria reinganum review of economic studies xlviii 1981 395 405 nor rent equalization due to the threat of preemption fudenberg and tirole review of economic studies lii 1985 383 401 rather there may be second mover advantages because of informational spillovers furthermore the model predicts that the equilibrium payoffs will typically be discontinuous and non monotonic in the probability that the new technology is profitable a welfare analysis reveals several market failures and suggests that policy intervention should adequately depend on the nature of uncertainty and the rate of technological progress

how to license intangible property we examine the optimal licensing strategy of a research lab selling to firms who are product market competitors we consider an independent lab as well as a research joint venture we show that 1 demands are interdependent and hence the standard price mechanism is not the profit maximizing licensing strategy 2 the seller s incentives to develop the innovation may be excessive 3 the seller s incentives to disseminate the innovation typically are too low 4 larger ventures are less likely to develop the innovation and more likely to restrict its dissemination in those cases where development occurs and 5 a downstream firm that is not a member of the research venture is worse off as a result of the innovation

multistage decision making fuzzy methodology for optimal investments based on experts evaluations abstract a new methodology of making a decision on an optimal investment in several projects is proposed the methodology is based on experts evaluations and consists of three stages in the first stage kaufmann s expertons method is used to reduce a possibly large number of applicants for credit using the combined expert data the credit risk level is determined for each project only the projects with low risks are selected in the second stage the model of refined decisions is constructed using the new modification of the previously proposed possibilistic discrimination analysis method sirbiladze khutsisvili dvalishvili 2010 this stage is based on expert knowledge and experience the projects selected in the first stage are compared in order to identify high quality ones among them the possibility levels of experts preferences are calculated and the projects are ranked finally the third stage deals with the bicriteria discrete optimization problem whose solution makes it possible to arrange the most advantageous investment in several projects simultaneously the decision on funding the selected projects is made and an optimal distribution of the allocated investment amount among them is provided the efficiency of the proposed methodology is illustrated by an example

incomplete adoption of a superior innovation we consider a model in which an innovating monopolist of a technologically superior intermediate input must sell this product to final output producers prior research shows that with complete information the monopolist s optimal strategy will lead to complete adoption of this technologically superior innovation in this article we show that when the price of some competitively supplied input used in the final product market is endogenous and is altered by adoption of the innovation then the optimal pricing strategy of the monopolist may lead to incomplete innovation thus the standard result of complete adoption of the superior technology is partly attributable to the partial equilibrium nature of prior models

preemption and rent equalization in the adoption of new technology we study the adoption of a new technology to illustrate the effects of preemption in games of timing we show that the threat of preemption equalizes rents in a duopoly but that this result does not extend to the general oligopoly game if the gain to preemption is sufficiently small then the optimal symmetric outcome which involves late adoption is an equilibrium this contrasts with reinganum s result that in precommitment equilibria there must be diffusion we develop a new and richer formalism for modeling games of timing which permits a continuoustime representation of the limit of discrete time mixed strategy equilibria

market research and innovation strategy in a duopoly we model a duopoly in which ex ante identical firms must decide where to direct their innovation efforts the firms face market uncertainty about consumers preferences for innovation on two product attributes and technology uncertainty about the success of their research and development r d investments firms can conduct costly market research before setting r d strategy we find that the value of market information to a firm depends on whether its rival is expected to obtain this information in equilibrium consequently one firm may forgo market research even though its rival conducts such research and learns the true state of demand we examine both vertical and horizontal demand structures with vertical preferences firms are a priori uncertain about which attribute all consumers will value more in this case a firm that conducts market research always attempts innovation on the attribute it discovers that consumers prefer and expends more on r d than a rival that has not conducted market research with horizontal preferences distinct segments exist each caring about innovation on only one attribute and firms are a priori uncertain how many consumers each segment contains in this case a firm that conducts market research may follow a niche strategy and attempt innovation to serve the smaller segment to avoid intense price competition for the larger segment a firm that conducts market research may therefore invest less in r d and earn lower postlaunch profits than a rival that has forgone such research

timing of technology adoption and product market competition abstract this paper examines how product market competition affects firms timing of adopting a new technology as well as whether the market provides sufficient adoption incentives it demonstrates that adoption dates differ not only among symmetric firms but also among markets with different market features more specifically technology adoption can occur earlier in a market with cournot competition than in a market with bertrand competition it can also occur earlier in a market in which goods are not too close substitutes therefore this paper shows that competition toughness does not always reinforce adoption incentives when goods are sufficiently differentiated adoption occurs later than is socially optimal

development and application of consumer credit scoring models using profit based classification measures abstract this paper presents a new approach for consumer credit scoring by tailoring a profit based classification performance measure to credit risk modeling this performance measure takes into account the expected profits and losses of credit granting and thereby better aligns the model developers objectives with those of the lending company it is based on the expected maximum profit emp measure and is used to find a trade off between the expected losses driven by the exposure of the loan and the loss given default and the operational income given by the loan additionally one of the major advantages of using the proposed measure is that it permits to calculate the optimal cutoff value which is necessary for model implementation to test the proposed approach we use a dataset of loans granted by a government institution and benchmarked the accuracy and monetary gain of using emp accuracy and the area under the roc curve as measures for selecting model parameters and for determining the respective cutoff values the results show that our proposed profit based classification measure outperforms the alternative approaches in terms of both accuracy and monetary value in the test set and that it facilitates model deployment

contingent portfolio programming for the management of risky projects methods for selecting a research and development r d project portfolio have attracted considerable interest among practitioners and academics this notwithstanding the industrial uptake of these methods has remained limited partly because of the difficulties of capturing relevant concerns in r d portfolio management motivated by these difficulties we develop contingent portfolio programming cpp which extends earlier approaches in that it i uses states of nature to capture exogenous uncertainties ii models resources through dynamic state variables and iii provides guidance for the selection of an optimal project portfolio that is compatible with the decision maker s risk attitude although cpp is presented here in the context of r d project portfolios it is applicable to a variety of investment problems where the dynamics and interactions of investment opportunities must be accounted for

the sale of unprotected inventions under alternative models of contracting behavior abstract when property rights are unavailable or unenforceable for a specific invention it has been shown am econ rev 84 1994 190 that it may still be possible for an independent inventor to enjoy some of the surplus generated by his invention in this paper i consider the case of an independent inventor with bargaining power who is free to choose the form of contracting when attempting to sell a valuable invention to firms in a duopoly industry i show that an inventor with small wealth can do no better than to disclose his invention to a randomly chosen firm and make a contract offer for moderate wealth i show that even though industry profit is maximized under a monopoly structure the inventor may be indifferent between selling the invention to both firms by signaling the value of his invention which is accomplished by offering contracts to both firms and selling the invention to one firm by offering a contract when wealth becomes sufficiently large i show that it is always more profitable for the inventor to signal the value of his invention by offering a contract to only one firm

cost reducing and demand creating r d with spillovers this article analyzes r d policies when the returns to cost reducing and demand creating r d are imperfectly appropriable and market structure is endogenous we generalize previous characterizations of appropriability to permit the possibility that own and rival r d are imperfect substitutes we also describe how equilibrium expenditures on process and product r d as well as equilibrium market structure depend on technological opportunities and spillovers in contrast to previous work diminished appropriability does not necessarily reduce r d expenditures for example under some conditions an increase in the extent of process product spillovers will lead to an increase in product process r d we estimate several variants of the model by using manufacturing line of business data and data from a survey of r d executives