Search results

Wars have important economic dimensions. They involve costs requiring resources that have alternative uses such as new hospitals, schools, and roads. Economists can contribute to the understanding of wars by identifying their costs. Case studies make a valuable contribution by providing estimates of the costs of conflict. Much has been written about the costs to the USA of the conflicts in Afghanistan and Iraq. Similar studies for the UK have been lacking. This chapter provides UK estimates of the costs of both conflicts.

There is a substantial body of research on the calculation of the costs of conflict, but so far no satisfactory methodology has been proposed that is able to combine all potential channels in one single analysis. This chapter uses the existing literature and its problems to propose a methodology for doing so.

The specific problems addressed in this study include the measurement of welfare, the imputation of missing data, the validity of the econometric techniques used in the estimation of conflict costs, the differentiation of existing conflict databases, and the possibility of both direct and nondirect effects. These challenges are described in detail in this chapter and a comprehensive methodological road map is proposed to be able to estimate the global economic costs of conflict. This contribution is an important continuation of our research agenda with regard to the calculation of the global economic costs of conflict.

This chapter aims to measure the total impact of conflict and violence to the global economy. By aggregating the most recent research on the costs of specific types of violence such as organized conflict, homicide, battle deaths, military spending, and incarceration, a comprehensive country-specific cost of violence and violence containment methodology is developed. The estimated benefit to the global economy of perfect peacefulness is at least 9.8 trillion dollars over the long run.

Compare and contrast how the accounting, organizational behavior and other literatures analyze sunk costs. Sunk costs form a key part of the decision-making component of the management accounting literature, which generally include previously incurred and unrecoverable costs. Management accountants believe, since current or future actions cannot change sunk costs, decision makers should ignore them. Thus, ongoing fixed costs or previously incurred sunk costs, while relevant for matters of accountability such as costing, income determination, and performance evaluation are irrelevant for most short- and long-term decisions. However, the organizational behavior literature indicates that sunk costs affect decision makers’ actions – especially their emotional attachments to the related project and the asymmetry of attitudes regarding the recognizing of losses and gains. Called the “sunk cost effect” or “sunk cost fallacy,” this conflict in sunk costs’ underlying nature reflects one element of incoherence in contemporary accounting discourse. We discuss this sunk cost conflict from an accounting and a philosophical perspective to denote some ambiguities that decision usefulness and accountability introduces into accounting discourse.

Review, summarize and analyze the above literatures

Managerial accountants can apply many lessons from the various literature sources.

We also show how differing opinions on how to treat sunk costs impact a firm’s decision-making process both economically and socially.

In explaining ethno-territorial conflicts, leadership preferences have an odd status. In case studies, leadership preferences are often viewed as highly significant causes but are not usually defined and measured explicitly. In large-sample statistical studies, leadership preferences are only captured by weakly related proxy variables. This paper aims to fill this gap by developing suitable theory, which can be used consistently in both case study and statistical applications.

Formal bargaining models are used to examine the expected impact of variation in leadership preferences. Relevant leadership characteristics are then used to construct measures of variation in leadership preferences, which are applied in case studies.

In bargaining models, variation in leadership preferences is expected to have a significant impact on ethno-territorial conflict outcomes. More extreme nationalist leaders and, more conditionally, strongly power-seeking leaders, should be more likely to be willing to use force to modify the status quo – although more moderate nationalist leaderships are also willing to do so under certain conditions. In five case studies, these formally derived hypotheses receive initial empirical support.

Theoretically and empirically, further refinement of research on variation in leadership preferences promises to add significant value. Formally, it is worth investigating the expected impact of additional preference types. Empirically, it is important to invest in measures of leadership preferences across large samples.

Decisions to initiate conflict often have an irrevocable character. They tend to transform the status quo in ways that it is often foreseen only with difficulty beforehand, and this change is then mostly impossible to undo. The sentence attributed to Colin Powell talking to President Bush about the Iraq War, “You break it, you own it,” illustrates the issue quite well. Closely linked to irrevocability is the issue of conflict costs. The uncertainty about conflicts and wars is due not only to the identity of the eventual winner but also to the costs inflicted upon the parties including the victorious ones. Often, prospective losers such as Napoleon and Hitler were initial winners who were in the end defeated by an accumulation of war costs they could not master.11There is some evidence that Napoleon, and then Hitler, were driven by increasing needs to absorb more and more territories. Clearly, Napoleon sold Louisiana to Jefferson to replenish his war chest and Hitler pillaged the central banks of conquered countries to support German military expenses. It is mostly the sunk costs associated with war that account for the irrevocability problem. Unfortunately, the literature on the formal analysis of war has not dealt with this matter, representing instead conflict as involving fixed costs or fixed cost expectancies at the onset. Additional cost estimates that should be taken by a decision-maker due to possible failures or irreversibility of actions are not considered. This is nowhere more evident than in the so-called bargaining model of conflict and war, whose numerous sometimes hidden assumptions have to be discussed and analyzed. The goal of this paper is to show that irrevocable decisions add to the cost of making them. Belligerent parties often have a tendency to minimize these especially, and this is an interesting twist of the analysis of irrevocable decision-making, if estimations of the gains of war are made on the basis of risk neutral expected utility calculations. The latter consideration leads me then to formulate alternative theories of war and conflict under the assumption of rationality.

This paper aims to clarify the effects of introducing depositor preference on resolution costs, probability of default and bank funding costs, allowing for the possibility of collateralized funding.

The importance of conflict among creditors in generating bankruptcy costs is documented. A model of such a conflict is provided, which is then used in analyzing the effects of depositor preference and other forms of asset encumbrance. The model takes into account the reactions of providers of secured and unsecured financing.

Depositor preference and collateralization of borrowing may reduce the cost of settling the conflicts among creditors that arises in case of resolution or bankruptcy. This net benefit, which may be capitalized into the value of the bank rather than affect creditors’ expected returns, should result in lower overall funding costs and thus a lower probability of distress despite increasing encumbrance of the bank’s balance sheet. The benefit is maximized when resolution is initiated early enough for preferred depositors to remain fully protected.

The interaction of asset encumbrance with liquidity risk is not addressed directly.

The issues addressed on the paper are currently the subject of debate by regulators and market participants. There are direct implications for prudential regulation and bank resolution policies.

The theory of conflict resolution is applied to bankruptcy and bank resolution, generating rigorous analysis of an important practical issue.

The spatial conflicts and congestion of construction resources are challenges that lead to the reduction in efficiency. The purpose of this paper is to enable users to detect and resolve workspace conflicts by implementing four resolution strategies in a five-dimensional (5D) CAD model. In addition to resolving conflicts, the model should be able to optimize time and cost of the projects. In other words, three variables of spatial conflicts, time and cost of project are considered simultaneously in the proposed model to find the optimum solution.

In the first step, a 5D simulation model is developed that includes time, cost and geometrical information of a project. Then, time-cost trade-off analysis was carried out to distinguish optimum schedule. The schedule was imported to the 5D CAD model to detect spatial conflicts. Finally, a novel algorithm was implemented to solve identified conflicts while imposing minimum project’s time and cost. Several iterations are performed to resolve all clashes using conflict resolution algorithm and visual simulation model.

The proposed methodology in this research was applied to a real case. Results showed that in comparison to the normal and initial schedule with 19 conflicts, the finalized schedule has no conflict, while time and cost of the project are both reduced.

Implementing the proposed methodology in construction projects requires proper technical basis in this field. In this regard, the executive user should have a proper understanding of the principles, concepts and tools of building information modeling and have project management knowledge. Also, the implementation conditions of the basic model requires the determination of the construction methods, estimated volumes of working items, scheduling and technical specification. The designed methodology also has two limitations regarding to its implementation. The first is the fact that strategies should be applied manually to the schedule. The other one pertains to the number of strategies used in the research. Four strategies have been used in the conflict resolution algorithm directly and the two others (spatial divisibility and activities breakdown strategies) have been used as default strategies in the visual simulation model. Since the unused strategies including the changing of construction method and the activity resources are subjective and depend upon the planner and project manager’s personal opinion, the authors have avoided using them in this research.

The method proposed in this research contributes the coordination of the working teams at the planning and execution phases of the project. In fact, the best location and work direction for each working team is presented as a schedule, so that the space conflict may not come about and the cost can be minimized. This visual simulation not only deepens the planners’ views about the executive barriers and the spatial conditions of the worksite, it also makes the construction engineers familiar on a daily basis with their executive scope. Therefore, it considerably improves the interactions and communication of the planning and construction teams. Another advantage and application of this methodology is the use of initial and available projects’ documents including the schedule and two-dimensional drawings. The integration of these basic documents in this methodology helps identify the spatial conflicts efficiently. To achieve this, the use of the existing and widely-used construction tools has facilitated the implementation of the methodology. Using this system, planners have applied the strategies in an order of priority and can observe the results of each strategy visually and numerically in terms of time, cost and conflicts. This methodology by providing the effective resolution strategies guides the practitioner to remove conflicts while optimum time and cost are imposed to project.

Contrary to the previous models that ignore cost, the proposed model is a 5D visual simulation model, which considers the variable of cost as a main factor for conflict identification and resolution. Moreover, a forward-pass approach is introduced to implement resolution strategies that are novel compared to other investigations.

The purpose of this paper is to develop a theory based on transaction cost economics to help explain how firms venturing into different foreign markets should properly formulate and implement contractual governance mechanisms to create greater efficiency, lower costs, and minimize conflict with partners.

Defines and discusses a conceptual framework of the determinants regarding contracts and strategies used to manage conflict in foreign ventures through the integration of foreign venture conflict resolution, contract, and transaction cost economics literature.

Suggests that perceived transaction costs will predict which contractual governance mechanism and which conflict resolution strategy a partner firm will choose when resolving conflict in a foreign venture. Postulates that consistency of conflict resolution strategy with contract type will impact the performance of the foreign venture, and that cultural distance, relative power, and interest alignment will all play a moderating role in this process.

The model demonstrates the necessity of examining how coupling certain conflict resolution strategies and contract types will impact foreign venture performance.

This study aims to identify the benefits and costs of participation in small group consumption communities (SGCCs), and understand how benefits and costs experienced in these communities differ from those experienced in large group consumption communities (LGCCs).

Thematic analysis of data collected through multi-method approach comprising depth-interviews, participant observation of community events and online community forums was used to identify benefits and costs of SGCC participation.

Eight benefits and three costs of SGCC participation were identified. While some benefits and costs were found to be similar to those identified in LGCCs earlier, their experience and manifestation was found to differ significantly in SGCCs.

Data were collected from SGCCs located in India (collectivist culture). Hence, findings may not be reflective of individualist cultures.

Understanding that benefits and costs of community participation are experienced differently in SGCCs and LGCCs may be useful input for managers wanting to seed/nurture consumption communities. By increasing benefits and reducing costs, managers can transform communities into vibrant social systems, and thereby improve members’ engagement and involvement.

Of the eight benefits identified in the study, two benefits – Escape and Meaningful Engagement are identified for the first time. The study also explores costs of SGCC participation (an area hitherto under explored) in detail. In addition, the study illustrates how some of the benefits despite being seemingly similar in SGCCs and LGCCs are inherently different.