Search results

We take Cumulative Prospect Theory (CPT) seriously by rigorously estimating structural models using the full set of CPT parameters. Much of the literature only estimates a subset of CPT parameters, or more simply assumes CPT parameter values from prior studies. Our data are from laboratory experiments with undergraduate students and MBA students facing substantial real incentives and losses. We also estimate structural models from Expected Utility Theory (EUT), Dual Theory (DT), Rank-Dependent Utility (RDU), and Disappointment Aversion (DA) for comparison. Our major finding is that a majority of individuals in our sample locally asset integrate. That is, they see a loss frame for what it is, a frame, and behave as if they evaluate the net payment rather than the gross loss when one is presented to them. This finding is devastating to the direct application of CPT to these data for those subjects. Support for CPT is greater when losses are covered out of an earned endowment rather than house money, but RDU is still the best single characterization of individual and pooled choices. Defenders of the CPT model claim, correctly, that the CPT model exists “because the data says it should.” In other words, the CPT model was borne from a wide range of stylized facts culled from parts of the cognitive psychology literature. If one is to take the CPT model seriously and rigorously then it needs to do a much better job of explaining the data than we see here.

High economic policy uncertainty forces firms to accumulate a higher level of cash than during normal business periods. However, it is not evident that economic policy uncertainty has a homogeneous impact across cash-holding distributions. This paper aims to study the impact of economic policy uncertainty, leverage and their interaction on cash-holding distributions.

This study adopted a quantile regression approach to examine the influence of economic policy uncertainty and firm leverage on firm-level cash-holding distributions. To investigate the influence across quantiles, the author estimated 19 quantiles between 0.05 and 0.95.

This study finds that both economic policy uncertainty and firm leverage significantly affect firm-level cash-holding distributions heterogeneously. But, the impact of the interaction of these two variables is significant only for firms placed in the 60th to 85th quantiles of cash holding distribution.

The study adds to the existing knowledge of determinants of firm-level cash holdings but takes exogenous variables as economic policy uncertainty. The paper builds on a unique sample setting wherein, the cash holdings of all nonfinancial firms have increased many folds, including housing companies in an emerging economy.

The author presents new estimates of the probability weighting functions found in rank-dependent theories of choice under risk. These estimates are unusual in two senses. First, they are free of functional form assumptions about both utility and weighting functions, and they are entirely based on binary discrete choices and not on matching or valuation tasks, though they depend on assumptions concerning the nature of probabilistic choice under risk. Second, estimated weighting functions contradict widely held priors of an inverse-s shape with fixed point well in the interior of the (0,1) interval: Instead the author usually finds populations dominated by “optimists” who uniformly overweight best outcomes in risky options. The choice pairs used here mostly do not provoke similarity-based simplifications. In a third experiment, the author shows that the presence of choice pairs that provoke similarity-based computational shortcuts does indeed flatten estimated probability weighting functions.

The increasing prevalence of a wide range of infectious diseases, as well as the underwhelming results of vaccination rates that may be traced back to problems with vaccine procurement and distribution, have brought to the fore the importance of vaccine supply chain (VSC) management in recent years. VSC is the cornerstone of effective vaccination; hence, it is crucial to enhance its performance, particularly in low- and middle-income countries where immunization rates are not satisfactory.

In this paper, the authors focus on VSC performance improvement of India by proposing supply contracts under demand uncertainty. The authors propose three contracts – wholesale price (WSP), cost sharing (CS) and incentive mechanism (IM) for the government-operated immunization program of India.

The authors' findings indicate that IM is capable of coordinating the supply chain, whereas the other two contracts are inefficient for the government. To validate the model, it is applied to a real-world scenario of coronavirus disease 2019 (COVID-19) in India, and the findings show that an IM contract improves the overall efficiency of the system by 23.72%.

Previous studies focused mainly on the influenza VSC industry within developed nations. Nonetheless, there exists a dearth of literature pertaining to the examination of supply contracts and their feasibility for immunization programs that are administered by the government and aimed at optimizing societal benefits. The authors' findings can be beneficial to the immunization program of India to optimize their VSC cost.

Quadrotors have been applied in various fields. However, because the quadrotor is subject to multiple disturbances, consisting of external disturbances, actuator faults and parameter uncertainties, it is difficult to control the unmanned aerial vehicle (UAV) to achieve high-precision tracking performance. This paper aims to design a safety controller that uses observer and neural network method to improve the tracking performance of UAV under multiple disturbances. The experiments prove that this method is effective.

First, to actively estimate and compensate the synthetic uncertainties of the system, a finite-time extended state observer is investigated, and the disturbances are transformed into the extended state of the system for estimation. Second, an adaptive neural network controller that does not accurately require the dynamic model knowledge is designed based on the estimated value, where the weights of the neural network can be dynamically adjusted by the adaptive law. Furthermore, the finite-time bounded convergence of the proposed observer and the stability of the system are proved through homogeneous theory and Lyapunov method.

The figure-“8” climbing flight simulation and real flight experiments illustrate that the proposed safety control strategy has good tracking performance.

This paper proposes the safety control structure of the UAV, which combines the extended state observer with the neural network method. Numerical simulation results and actual flight experiments demonstrate the effectiveness of the proposed control strategy.

The author develops a bilateral Nash bargaining model under value uncertainty and private/asymmetric information, combining ideas from axiomatic and strategic bargaining theory. The solution to the model leads organically to a two-tier stochastic frontier (2TSF) setup with intra-error dependence. The author presents two different statistical specifications to estimate the model, one that accounts for regressor endogeneity using copulas, the other able to identify separately the bargaining power from the private information effects at the individual level. An empirical application using a matched employer–employee data set (MEEDS) from Zambia and a second using another one from Ghana showcase the applied potential of the approach.

Using a GED-GARCH model to estimate monthly data from January 1990 to February 2022, we test whether gold acts as a hedge or safe haven asset in 10 countries. With a downturn of the stock market, gold can be viewed as a hedge and safe haven asset in the G7 countries. In the case of inflation, gold acts as a hedge and safe haven asset in the United States, United Kingdom, Canada, China, and Indonesia. For currency depreciation, oil price shock, economic policy uncertainty, and US volatility spillover, evidence finds that gold acts as a hedge and safe haven for all countries.

This paper aims to study the impact of geopolitical uncertainty on corporate cost of debt and the moderating role of information asymmetry between creditors and borrowing firms.

This study uses 5,223 firm-quarter observations on German-listed firms spanning 2010:Q1–2021:Q4. This study regresses the cost of debt financing on the geopolitical risk, accounting quality and other control variables. Information asymmetry is measured using the performance-matched Jones-model discretionary accrual and the stock bid-ask spread. It uses interaction terms to check if information asymmetry moderates the impact of geopolitical uncertainty on the cost of debts and control for the moderating role of business risk. For the sake of robustness check, it uses long-term cost of debt and bond spread as alternative dependent variables. In addition, this study executes instrumental variables regression and propension score matching to control for potential endogeneity problems.

Estimation results show that geopolitical uncertainty exerts a positive impact on the cost of debt. This impact is found to be more important on the cost of long-term debts. Information asymmetry is found to exacerbate the positive impact of geopolitical risk on the cost of debt. These results are robust to the change of the dependent variable and to the mitigation of potential endogeneity. At high levels of information asymmetry, this impact is more important for firms belonging to “Transportation”, “Automobiles and auto parts”, “Chemicals”, “Industrial and commercial services”, “Software and IT services” and “Industrial goods” business sectors.

Geopolitical uncertainty should be seriously considered when setting strategies for corporate financial management in Germany and similar economies that are directly exposed to geopolitical risks. Corporate managers should design a comprehensive set of corporate policies to improve their transparency and accountability during increasing uncertainty. Policymakers are required to implement innovative monetary and fiscal policies that take into consideration the heterogeneous impact of geopolitical uncertainty and information transparency in order to contain their incidence on German business sectors.

Despite its relevance to corporate financing conditions, little is known about the impact of geopolitical uncertainty on the cost of debt financing. To the best of the authors’ knowledge, there is still no empirical evidence on how information asymmetry between creditors and borrowing firms shapes the impact of geopolitical uncertainty on the cost of debt. This paper tries to fill this gap by interacting two measures of information asymmetry with geopolitical uncertainty. In contrast with previous studies, this study shows that the impact of geopolitical uncertainty on the cost of debt is non-linear and heterogeneous. The results show that the impact of geopolitical uncertainty does not exert the same impact on the cost of debt instruments with different maturities. This impact is found to be heterogeneous across business sectors and to depend on the level of information asymmetry.

The purpose of this study is to improve the control performance of wind energy conversion systems (WECSs) by proposing a new sensorless, robust control strategy based on a Smith predictor active disturbance rejection control (SP-ADRC) associated with a speed/position estimator.

The estimator consists of a sliding mode observer (SMO) in combination with a phase-locked loop (PLL) to estimate the permanent magnet synchronous generator (PMSG) rotor position and speed. At the same time, the SP-ADRC is applied to the speed control loop of the variable-speed WECS control system to adapt strongly to dynamic characteristics under parameter uncertainties and disturbances.

Numerical simulations are conducted to evaluate the speed tracking performances under various wind speed profiles. The results show that the proposed sensorless speed control improves the accuracy of rotor speed and position estimation and provides better power tracking performance than a regular ADRC controller under fast wind speed variations.

This paper offers a new approach for designing sensorless, robust control for PMSG-based WECSs.

A new sensorless, robust control is proposed to improve the stability and tracking performance of PMSG-based WECSs. The SP-ADRC control attenuates the effects of parameter uncertainties and disturbances and eliminates the time-delay impact. The sensorless control design based on SMO and PLL improves the accuracy of rotor speed estimation and reduces the chattering problem of traditional SMO. The obtained results support the theoretical findings.

The determination of the measurement uncertainty is relevant for all measurement processes. In production engineering, the measurement uncertainty needs to be known to avoid erroneous decisions. However, its determination is associated to high effort due to the expertise and expenditure that is needed for modelling measurement processes. Once a measurement model is developed, it cannot necessarily be used for any other measurement process. In order to make an existing model useable for other measurement processes and thus to reduce the effort for the determination of the measurement uncertainty, a procedure for the migration of measurement models has to be developed.

This paper presents an approach to migrate measurement models from an old process to a new “similar” process. In this approach, the authors first define “similarity” of two processes mathematically and then use it to give a first estimate of the measurement uncertainty of the similar measurement process and develop different learning strategies. A trained machine-learning model is then migrated to a similar measurement process without having to perform an equal size of experiments.Similarity assessment and model migration

The authors’ findings show that the proposed similarity assessment and model migration strategy can be used for reducing the effort for measurement uncertainty determination. They show that their method can be applied to a real pair of similar measurement processes, i.e. two computed tomography scans. It can be shown that, when applying the proposed method, a valid estimation of uncertainty and valid model even when using less data, i.e. less effort, can be built.

The proposed strategy can be applied to any two measurement processes showing a particular “similarity” and thus reduces the effort in estimating measurement uncertainties and finding valid measurement models.