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The purpose of this paper is to illustrate how game theoretic solution concepts inform what classes of problems will be amenable to artificial intelligence and machine learning…
Abstract
Purpose
The purpose of this paper is to illustrate how game theoretic solution concepts inform what classes of problems will be amenable to artificial intelligence and machine learning (AI/ML), and how to evolve the interaction between human and artificial intelligence.
Design/methodology/approach
The approach addresses the development of operational gaming to support planning and decision making. It then provides a succinct summary of game theory for those designing and using games, with an emphasis on information conditions and solution concepts. It addresses how experimentation demonstrates where human decisions differ from game theoretic solution concepts and how games have been used to develop AI/ML. It concludes by suggesting what classes of problems will be amenable to AI/ML, and which will not. It goes on to propose a method for evolving human/artificial intelligence.
Findings
Game theoretic solution concepts inform classes of problems where AI/ML 'solutions' will be suspect. The complexity of the subject requires a campaign of learning.
Originality/value
Though games have been essential to the development of AI/ML, practitioners have yet to employ game theory to understand its limitations.
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If everyone were indifferent between more and less and between this and that, the problems of allocating scarce resources would be trivialized. The necessity of choice, whether…
Abstract
If everyone were indifferent between more and less and between this and that, the problems of allocating scarce resources would be trivialized. The necessity of choice, whether social or individual, would seem absurd. However, people persist in preferring certain “states of the world” to others. As a society is made up of individuals, it seems reasonable that a society's preferences should be “made up” of the preferences of its members. Therefore, any social welfare function, W, should be a function of the individual welfare functions, wi. That is,
Events surrounding September 11, 2001, have motivated increasing interest in identifying, assessing, and managing the risk of “extreme events.” This article introduces a new…
Abstract
Events surrounding September 11, 2001, have motivated increasing interest in identifying, assessing, and managing the risk of “extreme events.” This article introduces a new mathematical framework for the risk management of extreme event risk. In the article, the author proposes criteria based on “higher” (the third and fourth) moments that dominate variance (the second moment) in explaining the economics of insurance and reinsurance. Economic and financial implications are then applied to the underwriting and investment activities of insurers and reinsurers.
Vic Gilgeous and Mirabelle D’Cruz
Summarizes what business and management games are, their history, the different types of games that are available and what their uses are. Through interviews and a questionnaire…
Abstract
Summarizes what business and management games are, their history, the different types of games that are available and what their uses are. Through interviews and a questionnaire survey the users of games are studied to ascertain who they are, why they use or are involved with games and what they think of them.
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Steven B. Johnson and Dennis H. Patz
As Gonedes and Dopuch point out, there are many alternative approaches to the allocation of financial accounting information which might be viewed as competitors to ASC, FASB and…
Abstract
As Gonedes and Dopuch point out, there are many alternative approaches to the allocation of financial accounting information which might be viewed as competitors to ASC, FASB and other extant processes. Even if one begins with the ethical premise that “individual preferences are to count” and it is assumed that some sort of regulatory approach is needed, there are still at least three basic types of standards‐setting processes worthy of consideration: (1) “representative or expert body” processes; (2) “voting” processes; and (3) “demand‐based” (i.e. “willingness‐to‐pay”) processes. While the first type relies on the delegation of decision making authority to a body of “representative” or “expert” parties, the latter two types base their respective decisions on ordinal preference and demand information elicited directly from the affected parties themselves.
Debabrata Datta and Santanu K. Ganguli
The purpose of this paper is to verify existence of political connection of firms in India. For this purpose the paper first presents a theoretical model and then tests…
Abstract
Purpose
The purpose of this paper is to verify existence of political connection of firms in India. For this purpose the paper first presents a theoretical model and then tests empirically the movement of stock prices during two state elections in India.
Design/methodology/approach
The methodology is theoretical modelling where the paper applies the standard Cournot model of oligopoly. The paper then applies correlation and Wilcoxon Paired Rank Sum test to verify the results of the theoretical model by using data from the Indian stock market during the election results.
Findings
The theoretical result states that some firms opt for political connection and some remain independent in an oligopoly. It also shows that political connection affects stock price. The empirical results find out that divergent responses of stock prices to the election results can be linked to politically connection.
Research limitations/implications
The theoretical model is a simple two firm model and not generalized to n number of firms. The empirical test considers only two state elections and applies simple statistical test. The study is restricted to one country only.
Practical implications
The paper has practical implications for stock market. It has implications for corporate governance and for political governance. This is important since political connection of firms has emerged as an important issue in India.
Social implications
The paper is important as it addresses the issue of political connection of firms, which have ramifications for social equilibrium. In a democratic country like India any nexus between political party and firms may adversely affect not only corporate governance but also political governance.
Originality/value
This paper looks at political connectedness theoretically in a federal structure, an issue not addressed so far in the literature. Second it considers not so discussed topic of market perception of political connection in India. The originality of the paper is that it presents a theory and also verifies the theoretical results with empirical test.
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This paper aims to make a submission to the UK's Economic and Social Research Council as part of its international benchmarking review of economics.
Abstract
Purpose
This paper aims to make a submission to the UK's Economic and Social Research Council as part of its international benchmarking review of economics.
Design/methodology/approach
The approach takes the form of a discussion of the health of economics in the UK from the perspective of heterodox or pluralist economists who are members of the Association for Heterodox Economics.
Findings
Research assessment based on peer review is damaging economics in the UK because, as currently conducted, it does not promote pluralism. This will lead to a monolithic discipline that will reject new and controversial ideas and arguments.
Practical implications
The current research assessment and subject benchmarking approaches must be completely changed so as to promote pluralism.
Originality/value
This is the first document by a heterodox economics association to challenge the research assessment and subject benchmarking conventions in the UK and also in Europe.
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Fabrizio Rossi, Robert Boylan and Richard J. Cebula
The purpose of this study is to investigate the relationship between financial decisions and ownership structure by using the control contests on a sample of Italian listed…
Abstract
Purpose
The purpose of this study is to investigate the relationship between financial decisions and ownership structure by using the control contests on a sample of Italian listed companies.
Design/methodology/approach
The analysis adopts a balanced panel data set of 984 firm-year observations for the period of 2002-2013, with estimation using a generalized method of moments.
Findings
The results appear to confirm both the hypotheses of the alignment of interests and the entrenchment effect. The entrenchment and alignment effects are not found to be alternatives but rather are found to co-exist. The presence of a coalition of minority shareholders acts as a tool to control agency costs, particularly when the coalition is instrumental in the contestability of corporate control.
Practical implications
These findings suggest that minority shareholders may have a larger impact than previously identified by strategically aligning with other shareholders to form coalitions. This study provides several practical implications. First, dividend payout is not necessarily a good instrument to control and monitor agency costs. This is because the payout can be used to expropriate benefits from the minority shareholders. Second, high ownership concentration does not always reduce agency costs. Third, a non-collusive coalition can be more useful in the monitoring of agency costs than other tools, such as the debt level.
Originality/value
This study shows that there is considerable value to the firm when individual blockholders come together in a contestable environment and become instrumental in making business decisions. The results support the contention that contestability is an excellent deterrent to dampen the expropriation of benefits to minority shareholders. This study also provides evidence that cash holding can be a good substitute for dividends and debt in the effort to limit agency costs.
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The purpose of this paper is to obtain a comprehensive structure of past empirical studies on financial contagion which can provide the present growth and future scope of research…
Abstract
Purpose
The purpose of this paper is to obtain a comprehensive structure of past empirical studies on financial contagion which can provide the present growth and future scope of research work on the field of contagion analysis.
Design/methodology/approach
Present study identifies 151 empirical studies on financial contagion and summarises all the studies on the basis of tools and methodology used, year of the studies, origin of the studies, sample period and sample countries taken, studies undertaken on the basis of different crisis period and markets considered and finally sources of the studies.
Findings
The results of the analysis show that the empirical studies on contagion increased continuously over the past five years. Higher order test of contagion with more number of sample countries may provide more accurate picture on financial contagion.
Originality/value
This paper collects, classifies and summarises past empirical studies on financial contagion and provides valuable conclusion on present growth and future scope of studies on financial contagion. The information given in this paper can be helpful for future researchers and academicians on this particular field; the summary of the conclusion (from past reviews) may be helpful for the policy makers for asset allocation and risk management.
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