Fuzzy real option analysis in patent related decision making and patent valuation

The shift towards a knowledge-based economy has inevitably prompted the evolution of patent exploitation. Nowadays, patent is more than just a prevention tool for a company to block its competitors from developing rival technologies, but lies at the very heart of its strategy for value creation and is therefore strategically exploited for economic pro t and competitive advantage. Along with the evolution of patent exploitation, the demand for reliable and systematic patent valuation has also reached an unprecedented level. However, most of the quantitative approaches in use to assess patent could arguably fall into four categories and they are based solely on the conventional discounted cash flow analysis, whose usability and reliability in the context of patent valuation are greatly limited by five practical issues: the market illiquidity, the poor data availability, discriminatory cash-flow estimations, and its incapability to account for changing risk and managerial flexibility. This dissertation attempts to overcome these impeding barriers by rationalizing the use of two techniques, namely fuzzy set theory (aiming at the first three issues) and real option analysis (aiming at the last two). It commences with an investigation into the nature of the uncertainties inherent in patent cash flow estimation and claims that two levels of uncertainties must be properly accounted for. Further investigation reveals that both levels of uncertainties fall under the categorization of subjective uncertainty, which differs from objective uncertainty originating from inherent randomness in that uncertainties labelled as subjective are highly related to the behavioural aspects of decision making and are usually witnessed whenever human judgement, evaluation or reasoning is crucial to the system under consideration and there exists a lack of complete knowledge on its variables. Having clarified their nature, the application of fuzzy set theory in modelling patent-related uncertain quantities is effortlessly justified. The application of real option analysis to patent valuation is prompted by the fact that both patent application process and the subsequent patent exploitation (or commercialization) are subject to a wide range of decisions at multiple successive stages. In other words, both patent applicants and patentees are faced with a large variety of courses of action as to how their patent applications and granted patents can be managed. Since they have the right to run their projects actively, this flexibility has value and thus must be properly accounted for. Accordingly, an explicit identification of the types of managerial flexibility inherent in patent-related decision making problems and in patent valuation, and a discussion on how they could be interpreted in terms of real options are provided in this dissertation. Additionally, the use of the proposed techniques in practical applications is demonstrated by three fuzzy real option analysis based models. In particular, the pay-of method and the extended fuzzy Black-Scholes model are employed to investigate the profitability of a patent application project for a new process for the preparation of a gypsum-fibre composite and to justify the subsequent patent commercialization decision, respectively; a fuzzy binomial model is designed to reveal the economic potential of a patent licensing opportunity.

The influence of high cable penetration in distribution networks on earth fault currents and the operation of relay protection.

Recent Storms in Nordic countries were a reason of long power outages in huge territories. After these disasters distribution networks' operators faced with a problem how to provide adequate quality of supply in such situation. The decision of utilization cable lines rather than overhead lines were made, which brings new features to distribution networks. The main idea of this work is a complex analysis of medium voltage distribution networks with long cable lines. High value of cable’s specific capacitance and length of lines determine such problems as: high values of earth fault currents, excessive amount of reactive power flow from distribution to transmission network, possibility of a high voltage level at the receiving end of cable feeders. However the core tasks was to estimate functional ability of the earth fault protection and the possibility to utilize simplified formulas for operating setting calculations in this network. In order to provide justify solution or evaluation of mentioned above problems corresponding calculations were made and in order to analyze behavior of relay protection principles PSCAD model of the examined network have been created. Evaluation of the voltage rise in the end of a cable line have educed absence of a dangerous increase in a voltage level, while excessive value of reactive power can be a reason of final penalty according to the Finish regulations. It was proved and calculated that for this networks compensation of earth fault currents should be implemented. In PSCAD models of the electrical grid with isolated neutral, central compensation and hybrid compensation were created. For the network with hybrid compensation methodology which allows to select number and rated power of distributed arc suppression coils have been offered. Based on the obtained results from experiments it was determined that in order to guarantee selective and reliable operation of the relay protection should be utilized hybrid compensation with connection of high-ohmic resistor. Directional and admittance based relay protection were tested under these conditions and advantageous of the novel protection were revealed. However, for electrical grids with extensive cabling necessity of a complex approach to the relay protection were explained and illustrated. Thus, in order to organize reliable earth fault protection is recommended to utilize both intermittent and conventional relay protection with operational settings calculated by the use of simplified formulas.

Creating Value for Corporate Sustainability: Stakeholder Engagement

The thesis aims to build a coherent view and understanding of stakeholder engagement’s contribution to corporate sustainability value creation. Theory suggests that corporate sustainability relies on sustainable relationships between the firm and its multiple stakeholders. This study is qualitative and evidence is derived from integrative analysis of literature, secondary data and case study analysis. The findings from the interviews analysis supplement the framework developed as the results of the literature review. The results obtained throughout the thesis research imply that stakeholder engagement helps develop more thorough understandings of issues and alternative perspectives, which in turn facilitates the decision-making processes improvement. The improvement is also achieved through ethical analysis, by weighing the impact of firm’s decisions on all relevant groups. Therefore, clear communication and exchange of information also improve the acceptance of sustainability initiatives amongst stakeholders both in terms of building trust and managing expectations. As practical implications, this thesis presents organizational practices that can be employed by companies to support effective engagement with stakeholders. The described practices could enhance processes such as partnership and co-creation resulting in greater sustainable development.

Public-private partnership investments in dry ports – Russian logistics markets and risks

The investments have always been considered as an essential backbone and so-called ‘locomotive’ for the competitive economies. However, in various countries, the state has been put under tight budget constraints for the investments in capital intensive projects. In response to this situation, the cooperation between public and private sector has grown based on public-private mechanism. The promotion of favorable arrangement for collaboration between public and private sectors for the provision of policies, services, and infrastructure in Russia can help to address the problems of dry ports development that neither municipalities nor the private sector can solve alone. Especially, the stimulation of public-private collaboration is significant under the exposure to externalities that affect the magnitude of the risks during all phases of project realization. In these circumstances, the risk in the projects also is becoming increasingly a part of joint research and risk management practice, which is viewed as a key approach, aiming to take active actions on existing global and specific factors of uncertainties. Meanwhile, a relatively little progress has been made on the inclusion of the resilience aspects into the planning process of a dry ports construction that would instruct the capacity planner, on how to mitigate the occurrence of disruptions that may lead to million dollars of losses due to the deviation of the future cash flows from the expected financial flows on the project. The current experience shows that the existing methodological base is developed fragmentary within separate steps of supply chain risk management (SCRM) processes: risk identification, risk evaluation, risk mitigation, risk monitoring and control phases. The lack of the systematic approach hinders the solution of the problem of risk management processes of dry port implementation. Therefore, management of various risks during the investments phases of dry port projects still presents a considerable challenge from the practical and theoretical points of view. In this regard, the given research became a logical continuation of fundamental research, existing in the financial models and theories (e.g., capital asset pricing model and real option theory), as well as provided a complementation for the portfolio theory. The goal of the current study is in the design of methods and models for the facilitation of dry port implementation through the mechanism of public-private partnership on the national market that implies the necessity to mitigate, first and foremost, the shortage of the investments and consequences of risks. The problem of the research was formulated on the ground of the identified contradictions. They rose as a continuation of the trade-off between the opportunities that the investors can gain from the development of terminal business in Russia (i.e. dry port implementation) and risks. As a rule, the higher the investment risk, the greater should be their expected return. However, investors have a different tolerance for the risks. That is why it would be advisable to find an optimum investment. In the given study, the optimum relates to the search for the efficient portfolio, which can provide satisfaction to the investor, depending on its degree of risk aversion. There are many theories and methods in finance, concerning investment choices. Nevertheless, the appropriateness and effectiveness of particular methods should be considered with the allowance of the specifics of the investment projects. For example, the investments in dry ports imply not only the lump sum of financial inflows, but also the long-term payback periods. As a result, capital intensity and longevity of their construction determine the necessity from investors to ensure the return on investment (profitability), along with the rapid return on investment (liquidity), without precluding the fact that the stochastic nature of the project environment is hardly described by the formula-based approach. The current theoretical base for the economic appraisals of the dry port projects more often perceives net present value (NPV) as a technique superior to other decision-making criteria. For example, the portfolio theory, which considers different risk preference of an investor and structures of utility, defines net present value as a better criterion of project appraisal than discounted payback period (DPP). Meanwhile, in business practice, the DPP is more popular. Knowing that the NPV is based on the assumptions of certainty of project life, it cannot be an accurate appraisal approach alone to determine whether or not the project should be accepted for the approval in the environment that is not without of uncertainties. In order to reflect the period or the project’s useful life that is exposed to risks due to changes in political, operational, and financial factors, the second capital budgeting criterion – discounted payback period is profoundly important, particularly for the Russian environment. Those statements represent contradictions that exist in the theory and practice of the applied science. Therefore, it would be desirable to relax the assumptions of portfolio theory and regard DPP as not fewer relevant appraisal approach for the assessment of the investment and risk measure. At the same time, the rationality of the use of both project performance criteria depends on the methods and models, with the help of which these appraisal approaches are calculated in feasibility studies. The deterministic methods cannot ensure the required precision of the results, while the stochastic models guarantee the sufficient level of the accuracy and reliability of the obtained results, providing that the risks are properly identified, evaluated, and mitigated. Otherwise, the project performance indicators may not be confirmed during the phase of project realization. For instance, the economic and political instability can result in the undoing of hard-earned gains, leading to the need for the attraction of the additional finances for the project. The sources of the alternative investments, as well as supportive mitigation strategies, can be studied during the initial phases of project development. During this period, the effectiveness of the investments undertakings can also be improved by the inclusion of the various investors, e.g. Russian Railways’ enterprises and other private companies in the dry port projects. However, the evaluation of the effectiveness of the participation of different investors in the project lack the methods and models that would permit doing the particular feasibility study, foreseeing the quantitative characteristics of risks and their mitigation strategies, which can meet the tolerance of the investors to the risks. For this reason, the research proposes a combination of Monte Carlo method, discounted cash flow technique, the theory of real options, and portfolio theory via a system dynamics simulation approach. The use of this methodology allows for comprehensive risk management process of dry port development to cover all aspects of risk identification, risk evaluation, risk mitigation, risk monitoring, and control phases. A designed system dynamics model can be recommended for the decision-makers on the dry port projects that are financed via a public-private partnership. It permits investors to make a decision appraisal based on random variables of net present value and discounted payback period, depending on different risks factors, e.g. revenue risks, land acquisition risks, traffic volume risks, construction hazards, and political risks. In this case, the statistical mean is used for the explication of the expected value of the DPP and NPV; the standard deviation is proposed as a characteristic of risks, while the elasticity coefficient is applied for rating of risks. Additionally, the risk of failure of project investments and guaranteed recoupment of capital investment can be considered with the help of the model. On the whole, the application of these modern methods of simulation creates preconditions for the controlling of the process of dry port development, i.e. making managerial changes and identifying the most stable parameters that contribute to the optimal alternative scenarios of the project realization in the uncertain environment. System dynamics model allows analyzing the interactions in the most complex mechanism of risk management process of the dry ports development and making proposals for the improvement of the effectiveness of the investments via an estimation of different risk management strategies. For the comparison and ranking of these alternatives in their order of preference to the investor, the proposed indicators of the efficiency of the investments, concerning the NPV, DPP, and coefficient of variation, can be used. Thus, rational investors, who averse to taking increased risks unless they are compensated by the commensurate increase in the expected utility of a risky prospect of dry port development, can be guided by the deduced marginal utility of investments. It is computed on the ground of the results from the system dynamics model. In conclusion, the outlined theoretical and practical implications for the management of risks, which are the key characteristics of public-private partnerships, can help analysts and planning managers in budget decision-making, substantially alleviating the effect from various risks and avoiding unnecessary cost overruns in dry port projects.

In Search for the European solidarity: The rule of law within the European Union in the framework of constitutional pluralism

The dissertation examines the rule of law within the European Union in the theoretical framework of constitutional pluralism. The leading lines of constitutional pluralism are examined with relation to the traditional and prevailing, monistic and hierarchical conceptions on how to perceive legal orders in Europe. The theoretical part offers also historical perspective by highlighting some of the turning points for the Union constitutional legal order in the framework of European integration. The concept of rule of law is examined in legal terms and its meaning to the Union constitutional constellation as a constitutional principle and a common value is observed. The realization of the rule of law at supranational and national level is explored with a view to discover that recent developments in some of the Member States give rise to concern about the viability of the rule of law within the European Union. It is recognized that the inobservance of the rule of law at national level causes a threat to the supranational constitutional legal order. The relationship between the supranational and national legal orders is significant in this respect and therefore particularly the interaction between the Court of Justice of the European Union (hereinafter the ECJ) and the Member States’ (constitutional/supreme) courts takes focus. It is observed that functioning dialogue between the supranational and national courts based on mutual respect and judicial deference is an important prerequisite for the realization of the rule of law within Europe. In order to afford a concrete example, a recent case C-62/14 Gauweiler v Deutscher Bundestag is introduced and analysed in relation to the notorious relationship between the Federal Constitutional Court of Germany and the ECJ. The implications of the ECJ’s decision in Gauweiler v Deutscher Bundestag is assessed with reference to some of the pressing issues of constitutionalism within Europe and some institutional aspects are also brought forward. Lastly, the feasibility of constitutional pluralism as a theoretical setting is measured against the legal reality of today’s Europe and its many constitutions. The hierarchical idea of one ultimate source of power, stemming from the traditional approaches to legal systems, is then assessed with relation to the requirement of the realization of the rule of law within the European Union from the supranational and national point of view.

The relationship between b2b branding and industrial buying in the digital era: evidence from Finnish gas industry

The aim of this study is to understand the importance of b2b brands in different phases of the industrial buying process in the digital era. The research problem is approached by examining a b2b supplier brand in the context of gas supplier selection. The data was collected by interviewing individuals from ten different companies. The findings contribute to previous theory by showing that as industrial buying behaviour is eventually individual behaviour, brands can influence decision making. The relevance of a brand depends on individual’s personality and preferences. Digital media cannot be ignored in managing brand image as buyers are present in the online environment. The results reveal that traditional personal selling is, nevertheless, in a key role in brand image building and is a source of added value. The salesperson influences buyers’ perceived associations of a brand and gives the brand a face.

An exploration of transformation theory and the western tradition: a critical evaluation of a graduate studies class

This qualitative study is an exploration of transformation theory, the Western tradition, and a critical evaluation of a graduate studies class at a university. It is an exploration of assumptions that are embedded in experience, that influence the experience and provide meaning about the experience. An attempt has been made to identify assumptions that are embedded in Western experience and connect them with assumptions that shape the graduate class experience. The focus is on assumptions that facilitate and impede large group discussions. Jungian psychology of personality type and archetype and developmental psychology is used to analyze the group experience. The pragmatic problem solving model, developed by Knoop, is used to guide thinking about the Western tradition. It is used to guide the analysis, synthesis and writing of the experience of the graduate studies class members. A search through Western history, philosophy. and science revealed assumptions about the nature of truth, reality, and the self. Assumptions embedded in Western thinking about the subject-object relationship, unity and diversity are made explicit. An attempt is made to identify Western tradition assumptions underlying transformation theory. The critical evaluation of the graduate studies class experience focuses upon issues associated with group process, self-directed learning, the educator-learner transaction and the definition of adult education. The advantages of making implicit assumptions explicit is explored.

Decision-making theory applied to India's explosion of a nuclear device in May, 1974

This essay reviews the decision-making process that led to India exploding a nuclear device in May, 1974. An examination of the Analytic, Cybernetic and Cognitive Theories of decision, will enable a greater understanding of the events that led up to the 1974 test. While each theory is seen to be only partially useful, it is only by synthesising the three theories that a comprehensive account of the 1974 test can be given. To achieve this analysis, literature on decision-making in national security issues is reviewed, as well as the domestic and international environment in which involved decisionmakers operated. Finally, the rationale for the test in 1974 is examined. The conclusion revealed is that the explosion of a nuclear device by India in 1974 was primarily related to improving Indian international prestige among Third World countries and uniting a rapidly disintegrating Indian societal consensus. In themselves, individual decision-making theories were found to be of little use, but a combination of the various elements allowed a greater comprehension of the events leading up to the test than might otherwise have been the case.

Search engine advertising in web retailing : an efficiency analysis

This study examines the efficiency of search engine advertising strategies employed by firms. The research setting is the online retailing industry, which is characterized by extensive use of Web technologies and high competition for market share and profitability. For Internet retailers, search engines are increasingly serving as an information gateway for many decision-making tasks. In particular, Search engine advertising (SEA) has opened a new marketing channel for retailers to attract new customers and improve their performance. In addition to natural (organic) search marketing strategies, search engine advertisers compete for top advertisement slots provided by search brokers such as Google and Yahoo! through keyword auctions. The rationale being that greater visibility on a search engine during a keyword search will capture customers' interest in a business and its product or service offerings. Search engines account for most online activities today. Compared with the slow growth of traditional marketing channels, online search volumes continue to grow at a steady rate. According to the Search Engine Marketing Professional Organization, spending on search engine marketing by North American firms in 2008 was estimated at $13.5 billion. Despite the significant role SEA plays in Web retailing, scholarly research on the topic is limited. Prior studies in SEA have focused on search engine auction mechanism design. In contrast, research on the business value of SEA has been limited by the lack of empirical data on search advertising practices. Recent advances in search and retail technologies have created datarich environments that enable new research opportunities at the interface of marketing and information technology. This research uses extensive data from Web retailing and Google-based search advertising and evaluates Web retailers' use of resources, search advertising techniques, and other relevant factors that contribute to business performance across different metrics. The methods used include Data Envelopment Analysis (DEA), data mining, and multivariate statistics. This research contributes to empirical research by analyzing several Web retail firms in different industry sectors and product categories. One of the key findings is that the dynamics of sponsored search advertising vary between multi-channel and Web-only retailers. While the key performance metrics for multi-channel retailers include measures such as online sales, conversion rate (CR), c1ick-through-rate (CTR), and impressions, the key performance metrics for Web-only retailers focus on organic and sponsored ad ranks. These results provide a useful contribution to our organizational level understanding of search engine advertising strategies, both for multi-channel and Web-only retailers. These results also contribute to current knowledge in technology-driven marketing strategies and provide managers with a better understanding of sponsored search advertising and its impact on various performance metrics in Web retailing.

The Influence of Arousal on Moral Decision-making for Individuals with and without Mild Head Injury

Recent research has shown that University students with a history of self-reported mild head injury (MHI) are more willing to endorse moral transgressions associated with personal, relative to impersonal, dilemmas (Chiappetta & Good, 2008). However, the terms 'personal' and 'impersonal' in these dilemmas have functionally confounded the 'intentionality' of the transgression with the 'personal impact' or 'outcome' of the transgression. In this study we used a modified version of these moral dilemmas to investigate decision-making and sympathetic nervous system responsivity. Forty-eight University students (24 with MHI, 24 with no-MHI) read 24 scenarios depicting moral dilemmas varying as a function of 'intentionality' of the act (deliberate or unintentional) and its 'outcome' (physical harm, no physical harm, non-moral) and were required to rate their willingness to engage in the act. Physiological indices of arousal (e.g., heart rate - HR) were recorded throughout. Additionally, participants completed several neurocognitive tests. Results indicated significantly lowered HR activity at baseline, prior to, and during (but not after) making a decision for each type of dilemma for participants with MHI compared to their non-injured cohort. Further, they were more likely than their cohort to authorize personal injuries that were deliberately induced. MHI history was also associated with better performance on tasks of cognitive flexibility and attention; while students' complaints of postconcussive symptoms and their social problem solving abilities did not differ as a function of MHI history. The results provide subtle support for the hypothesis that both emotional and cognitive information guide moral decision making in ambiguous and emotionally distressing situations. Persons with even a MHI have diminished physiological arousal that may reflect disruption to the neural pathways of the VMPFC/OFC similar to those with more severe injuries.

Exploring the Influence of Female Friendships on Decisions to Discuss the Breast Self-Exam in Young Adult Women

The breast self-exam (BSE) has been an important method for detection of breast cancer, especially in women under the age of 40. This study used grounded theory to explore the possible influence of female friendships on young women’s decisions regarding BSE. Conversations with six women in their 20s and 30s revealed that discussion of BSE is an exceptional conversation facilitated by the female friendship “safe zone” and a germinal event. Without being prompted by a germinal event, such as a health scare, it is generally considered to be an unnecessary conversation about private matters and viewed as out of the ordinary, especially for low-risk women. This conversation most easily occurs within the female friendship “safe zone” that develops through the body in common, a sense of trust, and private information sharing. Implications include peer mentoring for sharing and educating women and healthcare professionals on conditions that facilitate the exceptional conversation.

GA approach for finding Rough Set decision rules based on bireducts

Feature selection plays an important role in knowledge discovery and data mining nowadays. In traditional rough set theory, feature selection using reduct - the minimal discerning set of attributes - is an important area. Nevertheless, the original definition of a reduct is restrictive, so in one of the previous research it was proposed to take into account not only the horizontal reduction of information by feature selection, but also a vertical reduction considering suitable subsets of the original set of objects. Following the work mentioned above, a new approach to generate bireducts using a multi--objective genetic algorithm was proposed. Although the genetic algorithms were used to calculate reduct in some previous works, we did not find any work where genetic algorithms were adopted to calculate bireducts. Compared to the works done before in this area, the proposed method has less randomness in generating bireducts. The genetic algorithm system estimated a quality of each bireduct by values of two objective functions as evolution progresses, so consequently a set of bireducts with optimized values of these objectives was obtained. Different fitness evaluation methods and genetic operators, such as crossover and mutation, were applied and the prediction accuracies were compared. Five datasets were used to test the proposed method and two datasets were used to perform a comparison study. Statistical analysis using the one-way ANOVA test was performed to determine the significant difference between the results. The experiment showed that the proposed method was able to reduce the number of bireducts necessary in order to receive a good prediction accuracy. Also, the influence of different genetic operators and fitness evaluation strategies on the prediction accuracy was analyzed. It was shown that the prediction accuracies of the proposed method are comparable with the best results in machine learning literature, and some of them outperformed it.

In Search of Advice for Physicians in Entry-Level Medical Markets

We consider entry-level medical markets for physicians in the United Kingdom. These markets experienced failures which led to the adoption of centralized market mechanisms in the 1960's. However, different regions introduced different centralized mechanisms. We advise physicians who do not have detailed information about the rank-order lists submitted by the other participants. We demonstrate that in each of these markets in a low information environment it is not beneficial to reverse the true ranking of any two acceptable hospital positions. We further show that (i) in the Edinburgh 1967 market, ranking unacceptable matches as acceptable is not profitable for any participant and (ii) in any other British entry-level medical market, it is possible that only strategies which rank unacceptable positions as acceptable are optimal for a physician.

Bayesian Analysis for a Theory of Random Consumer Demand: The Case of Indivisible Goods

McCausland (2004a) describes a new theory of random consumer demand. Theoretically consistent random demand can be represented by a \"regular\" \"L-utility\" function on the consumption set X. The present paper is about Bayesian inference for regular L-utility functions. We express prior and posterior uncertainty in terms of distributions over the indefinite-dimensional parameter set of a flexible functional form. We propose a class of proper priors on the parameter set. The priors are flexible, in the sense that they put positive probability in the neighborhood of any L-utility function that is regular on a large subset bar(X) of X; and regular, in the sense that they assign zero probability to the set of L-utility functions that are irregular on bar(X). We propose methods of Bayesian inference for an environment with indivisible goods, leaving the more difficult case of indefinitely divisible goods for another paper. We analyse individual choice data from a consumer experiment described in Harbaugh et al. (2001).

Rationality, External Norms and the Epistemic Value of Menus

Ever since Sen’s (1993; 1997) criticism on the notion of internal consistency or menu independence of choice, there exists a widespread perception that the standard revealed preference approach to the theory of rational choice has difficulties in coping with the existence of external norms, or the information a menu of choice might convey to a decision-maker, viz., the epistemic value of a menu. This paper provides a brief survey of possible responses to these criticisms of traditional rational choice theory. It is shown that a novel concept of norm-conditional rationalizability can neatly accommodate external norms within the standard framework of rationalizability theory. Furthermore, we illustrate that there are several ways of incorporating considerations regarding the epistemic value of opportunity sets into a generalized model of rational choice theory.