Degree of vertical integration and its buffering effects on political uncertainty

The focus of this study is on the governance decisions in a concurrent channels context, in the case of uncertainty. The study examines how a firm chooses to deploy its sales force in times of uncertainty, and the subsequent performance outcome of those deployment choices. The theoretical framework is based on multiple theories of governance, including transaction cost analysis (TCA), agency theory, and institutional economics. Three uncertainty variables are investigated in this study. The first two are demand and competitive uncertainty which are considered to be industry-level market uncertainty forms. The third uncertainty, political uncertainty, is chosen as it is an important dimension of institutional environments, capturing non-economic circumstances such as regulations and political systemic issues. The study employs longitudinal secondary data from a Thai hotel chain, comprising monthly observations from January 2007 – December 2012. This hotel chain has its operations in 4 countries, Thailand, the Philippines, United Arab Emirates – Dubai, and Egypt, all of which experienced substantial demand, competitive, and political uncertainty during the study period. This makes them ideal contexts for this study. Two econometric models, both deploying Newey-West estimations, are employed to test 13 hypotheses. The first model considers the relationship between uncertainty and governance. The second model is a version of Newey-West, using an Instrumental Variables (IV) estimator and a Two-Stage Least Squares model (2SLS), to test the direct effect of uncertainty on performance and the moderating effect of governance on the relationship between uncertainty and performance. The observed relationship between uncertainty and governance observed follows a core prediction of TCA; that vertical integration is the preferred choice of governance when uncertainty rises. As for the subsequent performance outcomes, the results corroborate that uncertainty has a negative effect on performance. Importantly, the findings show that becoming more vertically integrated cannot help moderate the effect of demand and competitive uncertainty, but can significantly moderate the effect of political uncertainty. These findings have significant theoretical and practical implications, and extend our knowledge of the impact on uncertainty significantly, as well as bringing an institutional perspective to TCA. Further, they offer managers novel insight into the nature of different types of uncertainty, their impact on performance, and how channel decisions can mitigate these impacts.

QuantUn:quantification of uncertainty for the reassessment of requirements

Self-adaptive systems (SASs) should be able to adapt to new environmental contexts dynamically. The uncertainty that demands this runtime self-adaptive capability makes it hard to formulate, validate and manage their requirements. QuantUn is part of our longer-term vision of requirements reflection, that is, the ability of a system to dynamically observe and reason about its own requirements. QuantUn's contribution to the achievement of this vision is the development of novel techniques to explicitly quantify uncertainty to support dynamic re-assessment of requirements and therefore improve decision-making for self-adaption. This short paper discusses the research gap we want to fill, present partial results and also the plan we propose to fill the gap.

Uncertainty propagation in the model web:a case study with e-Habitat

eHabitat is a Web Processing Service (WPS) designed to compute the likelihood of finding ecosystems with equal properties. Inputs to the WPS, typically thematic geospatial "layers", can be discovered using standardised catalogues, and the outputs tailored to specific end user needs. Because these layers can range from geophysical data captured through remote sensing to socio-economical indicators, eHabitat is exposed to a broad range of different types and levels of uncertainties. Potentially chained to other services to perform ecological forecasting, for example, eHabitat would be an additional component further propagating uncertainties from a potentially long chain of model services. This integration of complex resources increases the challenges in dealing with uncertainty. For such a system, as envisaged by initiatives such as the "Model Web" from the Group on Earth Observations, to be used for policy or decision making, users must be provided with information on the quality of the outputs since all system components will be subject to uncertainty. UncertWeb will create the Uncertainty-Enabled Model Web by promoting interoperability between data and models with quantified uncertainty, building on existing open, international standards. It is the objective of this paper to illustrate a few key ideas behind UncertWeb using eHabitat to discuss the main types of uncertainties the WPS has to deal with and to present the benefits of the use of the UncertWeb framework.

The uncertainty enabled model web (UncertWeb)

UncertWeb is a European research project running from 2010-2013 that will realize the uncertainty enabled model web. The assumption is that data services, in order to be useful, need to provide information about the accuracy or uncertainty of the data in a machine-readable form. Models taking these data as imput should understand this and propagate errors through model computations, and quantify and communicate errors or uncertainties generated by the model approximations. The project will develop technology to realize this and provide demonstration case studies.

Néhány megjegyzés a kockázat, bizonytalanság, valószínűség kérdéséhez (Some remarks about uncertainty, risk and probability)

A címben említett három fogalom a közgazdasági elméletben központi szerepet foglal el. Ezek viszonya elsősorban a közgazdaságtudományi megismerés határait feszegeti. Mit tudunk a gazdasági döntésekről? Milyen információk alapján születnek a döntések? Lehet-e a gazdasági döntéseket „tudományos” alapra helyezni? A bizonytalanság kérdéséről az 1920-as években való megjelenése óta mindent elmondtak. Megvizsgálták a kérdést filozófiailag, matematikailag. Tárgyalták a kérdés számtalan elméleti és gyakorlati aspektusát. Akkor miért kell sokadszorra is foglalkozni a témával? A válasz igen egyszerű: azért, mert a kérdés minden szempontból ténylegesen alapvető, és mindenkor releváns. Úgy hírlik, hogy a római diadalmenetekben a győztes szekerén mindig volt egy rabszolga is, aki folyamatosan figyelmeztette a diadaltól megmámorosodott vezért, hogy ő is csak egy ember, ezt ne feledje el. A gazdasági döntéshozókat hasonló módon újra és újra figyelmeztetni kell arra, hogy a gazdasági döntések a bizonytalanság jegyében születnek. A gazdasági folyamatok megérthetőségének és kontrollálhatóságának van egy igen szoros korlátja. Ezt a korlátot a folyamatok inherens bizonytalansága adja. A gazdasági döntéshozók fülébe folyamatosan duruzsolni kell: ők is csak emberek, és ezért ismereteik igen korlátozottak. A „bátor” döntések során az eredmény bizonytalan, a tévedés azonban bizonyosra vehető. / === / In the article the author presents some remarks on the application of probability theory in financial decision making. From mathematical point of view the risk neutral measures used in finance are some version of separating hyperplanes used in optimization theory and in general equilibrium theory. Therefore they are just formally a probabilities. They interpretation as probabilities are misleading analogies leading to wrong decisions.

Transferable Utility Games with Uncertainty

We introduce the concept of a TUU-game, a transferable utility game with uncertainty. In a TUU-game there is uncertainty regarding the payoffs of coalitions. One out of a finite number of states of nature materializes and conditional on the state, the players are involved in a particular transferable utility game. We consider the case without ex ante commitment possibilities and propose the Weak Sequential Core as a solution concept. We characterize the Weak Sequential Core and show that it is non-empty if all ex post TUgames are convex.

Transferable Utility Games with Uncertainty

We introduce the concept of a TUU-game, a transferableutilitygame with uncertainty. In a TUU-game there is uncertainty regarding the payoffs of coalitions. One out of a finite number of states of nature materializes and conditional on the state, the players are involved in a particular transferableutilitygame. We consider the case without ex ante commitment possibilities and propose the Weak Sequential Core as a solution concept. We characterize the Weak Sequential Core and show that it is non-empty if all ex post TU-games are convex.

Környezeti kockázatok felmérése. Paraméterek bizonytalanságának hatása a kockázatkezelési döntéshozatalra = Assessment of environmental risks – effects of parameter uncertainty to the risk management decisions

A környezeti kockázatok megfelelő felmérése és kezelése napjaink egyik legfontosabb kérdése, nemcsak a szakmai, hanem a széles értelemben vett közvélemény számára. A szerző cikkében azt vizsgálja, hogy a környezeti kockázatok felmérésének milyen megközelítései vannak. Kulcskérdésként pedig arra koncentrál, hogy a kockázatkezelési döntéseket hogyan befolyásolja a becslések bizonytalansága. Először a környezeti kockázat definícióját adja meg, majd azt mutatja be, hogy a környezeti kockázatok kezelésére vonatkozó megközelítések milyen párhuzamban állnak a pénzügyi rendszerrel, mint komplex rendszerre vonatkozó megközelítésekkel. Végül a jelenleg legnagyobb kockázatoknak tartott környezeti kockázatokat ismerteti röviden. A cikk második részében kockázatkezelési alternatívákat mutat be, és azt, hogy a kockázatkezelési lépések kiválasztását befolyásolja a bizonytalanság. Ezt illusztrálandó Brouwer-Blois (2008) modelljét használva a soklépéses szimulációt és alternatív döntési kritériumot – a kritikus (extrém) költség-hatás mutatót – alkalmazza. _____________ Adequate assessment and management of environmental risks is a key question nowadays also for professional experts and also for the overall public. In this article the author examines the different approaches concerning environmental risks. He concentrates as a key question the influence on risk management decisions of uncertainties raised by our estimations. First he analyses the definition of environmental risks, and he shows the similarities and differences between approaches concerning environmental risks and risks threatening financial system, and finally he gives short overview on the most current environmental risks. In the second part of the paper he presents risk management alternatives and analyses the influential power of uncertainty on risk management decisions. In order to illustrate this phenomenon the author applies the model of Brouwer-Blois (2008) with multistep simulation and an alternative decisive criterion, the ranking based on critical (extreme) cost to effect measure.

Bizonytalanság, stratégia és teljesítmény – Kvalitatív kutatás innovatív kis- és középvállalatok vezetői körében (Uncertainty, strategy and performance – Qualitative research in innovative SMEs)

A szerző kvalitatív kutatási módszerekkel vizsgálja a kis- és középvállalatok (kkv-k) innovatív tevékenységeinek korlátait és lehetőségeit. A vizsgálat tárgyai (legalább) Magyarország szintjén új terméket vagy szolgáltatást nyújtó kkv-k, melyek határozott növekedési szándékkal rendelkeznek. Az eredmények egységes vizsgálati keretben, 41 vezető véleménye alapján születtek meg, három területre fókuszálva: (1) a környezeti bizonytalanság megítélése, (2) a szervezet követett stratégiája, kettős képessége, kiaknázó és felderítő tevékenysége, és (3) a versenyképes teljesítménycélok, konfigurációk. A cikk a kutatás lépéseit részletesen bemutatja, fontos eredményének tekinthető, hogy rámutat arra, hogy a kutatási és fejlesztési, valamint az innovatív tevékenységek legfontosabb gátja leginkább a vezetési és szervezési képességek és a stratégiai gondolkodás hiányára vezethető vissza a kis- és középvállalkozásokban. ______ The author conducted a qualitative research on the innovation potential of small and medium size enterprises (SMEs). SMEs with new products and services and with growth orientation are in the focus of the research. The standardized research design is based on 41 owner managers’ responses. It is focusing on 3 main areas: (1) environmental uncertainty, (2) the strategy followed by the organization, its ambidextrous capability, exploitative and explorative behavior, and (3) competitive performance and configurations. The paper describes a qualitative research design in detail. The main finding of the research is that the lack of managerial skills and strategic thinking inhibit SMEs to conduct innovation as well as to engage in research and development activities.

A válság mint negatív információ és bizonytalansági tényező. A válság hatása az egy részvényre jutó nyereség-előrejelzésekre (The financial crisis as negative information and a factor of uncertainty. Analysing the EPS forecasting error in Hungary and Austria)

A szerző a 2008-ban kezdődött gazdasági világválság hatását vizsgálja az egy részvényre jutó nyereség előrejelzésének hibájára. Számos publikáció bizonyította, hogy az elemzők a tényértékeknél szisztematikusan kedvezőbb tervértéket adnak meg az egy részvényre jutó előrejelzéseikben. Más vizsgálatok azt igazolták, hogy az egy részvényre jutó előrejelzési hiba bizonytalan környezetben növekszik, míg arra is számos bizonyítékot lehet találni, hogy a negatív hírek hatását az elemzők alulsúlyozzák. A gazdasági világválság miatt az elemzőknek számtalan negatív hírt kellett figyelembe venniük az előrejelzések készítésekor, továbbá a válság az egész gazdaságban jelentősen növelte a bizonytalanságot. A szerző azt vizsgálja, hogy miként hatott a gazdasági világválság az egy részvényre jutó nyereség- előrejelzés hibájára, megkülönböztetve azt az időszakot, amíg a válság negatív hír volt, attól, amikor már hatásaként jelentősen megnőtt a bizonytalanság. _____ The author investigated the impact of the financial crisis that started in 2008 on the forecasting error for earnings per share. There is plentiful evidence from the 1980s that analysts give systematically more favourable values in their earnings per share (EPS) forecasts than reality, i.e. they are generally optimistic. Other investigations have supported the idea that the EPS forecasting error is greater under uncertain environmental circumstances, while other researchers prove that the analysts under-react to the negative information in their forecasts. The financial crisis brought a myriad of negative information for analysts to consider in such forecasts, while also increasing the level of uncertainty for the entire economy. The article investigates the impact of the financial crisis on the EPS forecasting error, distinguishing the period when the crisis gave merely negative information, from the one when its effect of uncertainty was significantly increased over the entire economy.

Essays on the determinants of private investment: The effects of relative price uncertainty and political instability

The objective of this study was to provide empirical evidence on the effects of relative price uncertainty and political instability on private investment. My effort is expressed in a single-equation model using macroeconomic and socio-political data from eight Latin American countries for the period 1970–1996. Relative price uncertainty is measured by the implied volatility of the exchange rate and political instability is measured by using indicators of social unrest and political violence. ^ I found that, after controlling for other variables, relative price uncertainty and political instability are negatively associated with private investment. Macroeconomic and political stability are key ingredients for the achievement of a strong investment response. This highlights the need to develop the state and build a civil society in which citizens can participate in decision-making and express consent without generating social turmoil. At the same time the government needs to implement structural policies along with relative price adjustments to eliminate excess volatility in price movements in order to provide a stable environment for investment. ^

Quantifying the effects of temperature and concentration on variable-density flow in numerical modeling of groundwater systems: Implications for predictive uncertainty and data collection

Groundwater systems of different densities are often mathematically modeled to understand and predict environmental behavior such as seawater intrusion or submarine groundwater discharge. Additional data collection may be justified if it will cost-effectively aid in reducing the uncertainty of a model's prediction. The collection of salinity, as well as, temperature data could aid in reducing predictive uncertainty in a variable-density model. However, before numerical models can be created, rigorous testing of the modeling code needs to be completed. This research documents the benchmark testing of a new modeling code, SEAWAT Version 4. The benchmark problems include various combinations of density-dependent flow resulting from variations in concentration and temperature. The verified code, SEAWAT, was then applied to two different hydrological analyses to explore the capacity of a variable-density model to guide data collection. ^ The first analysis tested a linear method to guide data collection by quantifying the contribution of different data types and locations toward reducing predictive uncertainty in a nonlinear variable-density flow and transport model. The relative contributions of temperature and concentration measurements, at different locations within a simulated carbonate platform, for predicting movement of the saltwater interface were assessed. Results from the method showed that concentration data had greater worth than temperature data in reducing predictive uncertainty in this case. Results also indicated that a linear method could be used to quantify data worth in a nonlinear model. ^ The second hydrological analysis utilized a model to identify the transient response of the salinity, temperature, age, and amount of submarine groundwater discharge to changes in tidal ocean stage, seasonal temperature variations, and different types of geology. The model was compared to multiple kinds of data to (1) calibrate and verify the model, and (2) explore the potential for the model to be used to guide the collection of data using techniques such as electromagnetic resistivity, thermal imagery, and seepage meters. Results indicated that the model can be used to give insight to submarine groundwater discharge and be used to guide data collection. ^

Variation and Uncertainty in Evaporation from a Subtropical Estuary: Florida Bay

Variation and uncertainty in estimated evaporation was determined over time and between two locations in Florida Bay, a subtropical estuary. Meteorological data were collected from September 2001 to August 2002 at Rabbit Key and Butternut Key within the Bay. Evaporation was estimated using both vapor flux and energy budget methods. The results were placed into a long-term context using 33 years of temperature and rainfall data collected in south Florida. Evaporation also was estimated from this long-term data using an empirical formula relating evaporation to clear sky solar radiation and air temperature. Evaporation estimates for the 12-mo period ranged from 144 to 175 cm yr21, depending on location and method, with an average of 163 cm yr21 (6 9%). Monthly values ranged from 9.2 to 18.5 cm, with the highest value observed in May, corresponding with the maximum in measured net radiation. Uncertainty estimates derived from measurement errors in the data were as much as 10%, and were large enough to obscure differences in evaporation between the two sites. Differences among all estimates for any month indicate the overall uncertainty in monthly evaporation, and ranged from 9% to 26%. Over a 33-yr period (1970–2002), estimated annual evaporation from Florida Bay ranged from 148 to 181 cm yr21, with an average of 166 cm yr21. Rainfall was consistently lower in Florida Bay than evaporation, with a long-term average of 106 cm yr21. Rainfall considered alone was uncorrelated with evaporation at both monthly and annual time scales; when the seasonal variation in clear sky radiation was also taken into account both net radiation and evaporation were significantly suppressed in months with high rainfall.

Living with Uncertainty: Acting in the Best Interests of Women

A recent multi-country study on hormonal contraceptives (HC) and HIV acquisition and transmission among African HIV-serodiscordant couples reported a statistically significant doubling of risk for HIV acquisition among women as well as transmission from women to men for injectable contraceptives. Together with a prior cohort study on African women seeking health services, these data are the strongest yet to appear on the HC-HIV risk. This paper will briefly review the Heffron study strengths and relevant biological and epidemiologic evidence; address the futility of further trials; and propose instead an alternative framework for next steps. The weight of the evidence calls for a discontinuation of progestin-dominant methods. We propose here five types of productive activities: (1) scaling injectable hormones down and out of the contraceptive mix; (2) strengthening and introducing public health strategies with proven potential to reduce HIV spread; (3) providing maximal choice to reduce unplanned pregnancy, starting with quality sexuality education through to safe abortion access; (4) expanding provider training, end-user counseling and access to male and female barriers, with a special renewed focus on female condom; (5) initiating a serious research agenda to determine anti-STI/HIV potential of the contraceptive cervical cap. Trusting women to make informed choices is critical to achieve real progress in dual protection.

Decision-making under extreme *uncertainty: Rethinking hazard -related perceptions and action

Understanding who evacuates and who does not has been one of the cornerstones of research on the pre-impact phase of both natural and technological hazards. Its history is rich in descriptive illustrations focusing on lists of characteristics of those who flee to safety. Early models of evacuation focused almost exclusively on the relationship between whether warnings were heard and ultimately believed and evacuation behavior. How people came to believe these warnings and even how they interpreted the warnings were not incorporated. In fact, the individual seemed almost removed from the picture with analysis focusing exclusively on external measures. ^ This study built and tested a more comprehensive model of evacuation that centers on the decision-making process, rather than decision outcomes. The model focused on three important factors that alter and shape the evacuation decision-making landscape. These factors are: individual level indicators which exist independently of the hazard itself and act as cultural lenses through which information is heard, processed and interpreted; hazard specific variables that directly relate to the specific hazard threat; and risk perception. The ultimate goal is to determine what factors influence the evacuation decision-making process. Using data collected for 1998's Hurricane Georges, logistic regression models were used to evaluate how well the three main factors help our understanding of how individuals come to their decisions to either flee to safety during a hurricane or remain in their homes. ^ The results of the logistic regression were significant emphasizing that the three broad types of factors tested in the model influence the decision making process. Conclusions drawn from the data analysis focus on how decision-making frames are different for those who can be designated “evacuators” and for those in evacuation zones. ^