Tall claims? Sense and nonsense about the importance of height of US presidents

According to both the scientific literature and popular media, all one needs to win a US presidential election is to be taller than one's opponent. Yet, such claims are often based on an arbitrary selection of elections, and inadequate statistical analysis. Using data on all presidential elections, we show that height is indeed an important factor in the US presidential elections. Candidates that were taller than their opponents received more popular votes, although they were not significantly more likely to win the actual election. Taller presidents were also more likely to be reelected. In addition, presidents were, on average, much taller than men from the same birth cohort. The advantage of taller candidates is potentially explained by perceptions associated with height: taller presidents are rated by experts as ‘greater’, and having more leadership and communication skills. We conclude that height is an important characteristic in choosing and evaluating political leaders.     

EMERGENCE AND PERSISTENCE OF INEFFICIENT STATES

We present a theory of the emergence and persistence of inefficient states based on patronage politics. The society consists of rich and poor. The rich are initially in power, but expect to transition to democracy, which will choose redistributive policies. Taxation requires the employment of bureaucrats. By choosing an inefficient state structure, the rich may be able to use patronage and capture democratic politics, so reducing the amount of redistribution in democracy. Moreover, the inefficient state creates its own constituency and tends to persist over time. Intuitively, an inefficient state structure creates more rents for bureaucrats than would an efficient one. When the poor come to power in democracy, they will reform the structure of the state to make it more efficient so that higher taxes can be collected at lower cost and with lower rents for bureaucrats. Anticipating this, when the society starts out with an inefficient organization of the state, bureaucrats support the rich, who set lower taxes but also provide rents to bureaucrats. We obtain that the rich–bureaucrats coalition may also expand the size of bureaucracy excessively so as to generate enough political support. The model shows that an equilibrium with an inefficient state is more likely to arise when there is greater income inequality, when bureaucratic rents take intermediate values, and when individuals are sufficiently forward‐looking.     

A robust voting machine allocation model to reduce extreme waiting

Despite the fact that in the 2012 presidential election, two-thirds of voters waited less than 10 min and a mere 3% waited longer than an hour to cast their ballots, media accounts of excruciating waits have left a misleading impression on the general public. At the root of the problem is the allocation of voting machines based on efficiency as measured by average waiting time. This method does not account for the damaging consequences of the rare events that cause extremely long waits. We propose an extreme-value robust optimization model that can explicitly consider nominal and worst-case waiting times beyond the single-point estimate commonly seen in the literature. We benchmark the robust model against the published deterministic model using a real case from the 2008 presidential election in Franklin County, Ohio. The results demonstrate that the proposed robust model is superior in accounting for uncertainties in voter turnout and machine availability, reducing the number of voters experiencing waits that exceed two hours by 61%.     

All or nothing: International coalitions responding to competing pressures in challenges to IP rights

Foreign subsidiaries face ‘institutional duality’ from competing parent-firm and host-country conformity pressures. However, international coalitions of firms experience pressures to conform from multiple parents, resulting in ‘institutional multiplicity.’ We argue that coalition members bargain and satisfice to agree upon goals and responses to external pressures. As institutional multiplicity increases, coalition responses are increasingly framed around simple threshold-type goals all members can agree upon. We test this idea in the context of international coalitions challenging biotechnology and organic chemistry patents of competitors in the United States Patent and Trademark Office's Patent Trial and Appeals Board. Our analysis includes 946 observations, and finds that larger coalitions with greater variance in member home-country patent enforcement institutions are more likely to pursue strategies that have a simple performance goal all members can agree upon: having a competitor's patent invalidated instead of a settlement. This relationship is further enhanced when coalition members have diverse levels of strategic interest, captured by variance in portions of coalition members' overall patent portfolios belonging to the same patent family as the disputed patent.     

Implementing Meritocracy in Senior Public Administration: the Dilemma for Chilean Politicians

This article addresses the question of whether politicians are willing to overcome patronage by creating a merit-based recruitment and selection system of the senior civil servants with the purpose of making public administration more effective. To answer the question the paper analyses the Chilean administrative reform of 2003. It concludes that the reform created a hybrid system of appointment of top civil servants: one with elements of meritocracy but restricted to the members of the political coalition in power. Information came from 67 interviews to key actors, official documents, academic literature and the press.     

Modeling Interdependent Risks

In an interdependent world the risks faced by any one agent depend not only on its choices but also on those of all others. Expectations about others' choices will influence investments in risk management and the outcome can be suboptimal for everyone. We model this as the Nash equilibrium of a game and give conditions for such a suboptimal equilibrium to be tipped to an optimal one. We also characterize the smallest coalition to tip an equilibrium, the minimum critical coalition, and show that this is also the cheapest critical coalition, so that there is no less expensive way to move the system from the suboptimal to the optimal equilibrium. We illustrate these results by reference to airline security and the control of infectious diseases via vaccination.     

Public expenditure and public accountability

Within a parliamentary democracy, both the Executive and Legislature have key roles in ensuring public accountability for budgetary decisions. The internal budgetary processes of the United Kingdom Government have developed the PESC system of planning public expenditure over a rolling five year period at constant prices. At the same time, the effectiveness of parliamentary financial procedures, far removed from the decision processes, has further declined. The key weaknesses are identified as: (1) the almost complete divorce between parliamentary discussion of expenditure and that of taxation; (2) the manner in which the Government's survival might be imperilled by defeat even on minor items, which limits the activities of Government backbenchers; (3) the unequal knowledge and resources of Government and Parliament, accentuated by British traditions of official secrecy; and (4) the failure of Parliament to seize those opportunities which are available (e.g. debates on the annual Public Expenditure White Paper). Proposals have been made for reform of financial procedures and for a new system of select committees by the Expenditure and Procedure Committees. These are evaluated and given a cautious approval. The emphasis is on the aim of integrating parliamentary debate of the expenditure and revenue sides of the public budget. A single budgetary document is proposed. Multi-year tax forecasts, and the underlying medium term economic assessment, should be published. ‘Tax expenditures’ should be carefully costed and linked to the relevant expenditure programmes. These reforms would provide a more coherent and comprehensive framework for public debate of budgetary decisions.     

基于合作博弈模型的公共河流水资源分配方案研究

水资源的稀缺性使得公共河流的水资源分配问题中存在着各种冲突与矛盾。为了确定公共河流流经的各用水主体之间分配水资源的合理方案,本文建立具有外部性的合作博弈模型来分析公共河流流经的各用水主体之间在竞争与合作并存情况下的水资源分配问题。使用动态博弈的方法来确定联盟之间通过竞争产生的均衡水资源分配量,然后在各联盟之内通过Nash协商的方式来分配联盟的均衡水资源分配量,比较各种方案下用水主体产生的总效用,进而得到公共河流用水主体之间竞争与合作并存时的最优水资源分配方案和各用水主体之间形成联盟的具体形式。研究表明:受到外部性环境的影响,公共河流用水主体之间部分合作可能比完全合作产生更大的总效用,合作与竞争并存时的最优分配方案优于完全合作时的最优分配方案。     

A Structural Model of Government Formation

In this paper we estimate a bargaining model of government formation in parliamentary democracies. We use the estimated structural model to conduct constitutional experiments aimed at evaluating the impact of institutional features of the political environment on the duration of the government formation process, the type of coalitions that form, and their relative stability.     

基于交叉效率和合作博弈的决策单元排序方法

在数据包络分析中，大量的交叉效率模型已被提出。然而选择不同的目标模型将实现不一样的交叉效率评价。本文基于针对单个决策单元实施的对抗型和仁慈型两个交叉效率模型，用合作博弈方法来研究交叉效率模型的选取，并利用Shapley值对决策单元进行排序。最后通过实例分析显示该排序方法充分利用了最小交叉效率和最大交叉效率的信息完全排序了所有决策单元，具有一定的综合性和合理性。     

A GAP FOR ME: ENTREPRENEURS AND ENTRY

We present a theory of entrepreneurial entry (and exit) decisions. Knowing their own managerial talent, entrepreneurs decide which market to enter, where markets differ in size. We obtain a striking sorting result: Each entrant in a large market is more efficient than any entrepreneur in a smaller market because competition is endogenously more intense in larger markets. This result continues to hold when entrepreneurs can export their output to other markets, thereby incurring a unit transport cost or tariff. The sorting and price competition effects imply that the number of entrants (and hence product variety) may actually be smaller in larger markets. In the stochastic dynamic extension of the model, we show that the churning rate of entrepreneurs is higher in larger markets. (JEL: L11, L13, M13, F12)     

Supply Chain Models with Mutual Commitments and Implications for Social Responsibility

In today's increasingly globalized environment, more and more companies recognize the mutual dependence of supply chain partners in value creation. When making business decisions, they take into consideration their partners’ bottom line profitability, especially in emerging markets. The question is, is this kind of practice sustainable? This study makes an attempt to formalize this issue by examining a stylized two‐party supply chain model in which each player maximizes its own profit while making a certain commitment to its partner. We compare five different games between the two supply‐chain partners, which reflect different power positions of the players and different levels of commitment. We identify conditions under which both players are better off with mutual commitments than without, a situation we call win–win. We show that win–win can be achieved if and only if the mutual commitments are comparable. Thus, the recognition of mutual dependence of the supply chain members needs to be translated into reciprocal concerns. In addition, different players’ commitments play different roles but together they have a similar effect as a profit sharing contract. Finally, we discuss the implications of our findings in the context of socially responsible operations. In particular, our analyses show that it is possible to care about the supply chain partners’ bottom line without sacrificing one's own profitability, and our models can be used as a tool to determine the commitment levels by evaluating the predicted outcome.     

Power Structure and Profitability in Assembly Supply Chains

This paper studies the impact of supply chain power structure on firms' profitability in an assembly system with one assembler and two suppliers. Two power regimes are investigated—in a Single Power Regime, a more powerful firm acts as the Stackelberg leader to decide the wholesale price but not the quantity whereas in a Dual Power Regime, both the price and quantity decisions are granted to the more powerful firm. Tallying the power positions of the three firms, for each power regime we study three power structures and investigate the system's as well as the firms' preference of power. We find that when the assembler is the most powerful firm among the three, the system‐wide profit is the highest and so is the assembler's profit. The more interesting finding is that, if the assembler is not the most powerful player in the system, more power does not necessarily guarantee her a higher profit. Similarly, a supplier's profit can also decrease with the power he has. These results contrast with the conclusion for serial systems, where a firm always prefers more power. We also find that when both suppliers are more (less) powerful than the assembler, it can be beneficial (indifferent) for everyone if the two suppliers merge into a mega supplier to make decisions jointly. When the assembler is more powerful than one supplier and less so than the other, it is always better for the system to have the two suppliers merge, and for each individual firm, merging is preferred if the firm becomes the more powerful party after merging.     

The Farsighted Stable Set

Harsanyi (1974) criticized the von Neumann–Morgenstern (vNM) stable set for its presumption that coalitions are myopic about their prospects. He proposed a new dominance relation incorporating farsightedness, but retained another feature of the stable set: that a coalition S can impose any imputation as long as its restriction to S is feasible for it. This implicitly gives an objecting coalition complete power to arrange the payoffs of players elsewhere, which is clearly unsatisfactory. While this assumption is largely innocuous for myopic dominance, it is of crucial significance for its farsighted counterpart. Our modification of the Harsanyi set respects “coalitional sovereignty.” The resulting farsighted stable set is very different from both the Harsanyi and the vNM sets. We provide a necessary and sufficient condition for the existence of a farsighted stable set containing just a single‐payoff allocation. This condition roughly establishes an equivalence between core allocations and the union of allocations over all single‐payoff farsighted stable sets. We then conduct a comprehensive analysis of the existence and structure of farsighted stable sets in simple games. This last exercise throws light on both single‐payoff and multi‐payoff stable sets, and suggests that they do not coexist.     

Leveraging the Strengths of Choice Models and Neural Networks: A Multiproduct Comparative Analysis*

Choice models and neural networks are two approaches used in modeling selection decisions. Defining model performance as the out‐of‐sample prediction power of a model, we test two hypotheses: (i) choice models and neural network models are equal in performance, and (ii) hybrid models consisting of a combination of choice and neural network models perform better than each stand‐alone model. We perform statistical tests for two classes of linear and nonlinear hybrid models and compute the empirical integrated rank (EIR) indices to compare the overall performances of the models. We test the above hypotheses by using data for various brand and store choices for three consumer products. Extensive jackknifing and out‐of‐sample tests for four different model specifications are applied for increasing the external validity of the results. Our results show that using neural networks has a higher probability of resulting in a better performance. Our findings also indicate that hybrid models outperform stand‐alone models, in that using hybrid models guarantee overall results equal or better than the two stand‐alone models. The improvement is particularly significant in cases where neither of the two stand‐alone models is very accurate in prediction, indicating that the proposed hybrid models may capture aspects of predictive accuracy that neither stand‐alone model is capable of on their own. Our results are particularly important in brand management and customer relationship management, indicating that multiple technologies and mixture of technologies may yield more accurate and reliable outcomes than individual ones.     

What have you done for me lately? Charisma attenuates the decline in U.S. presidential approval over time

Using archival data for a sample of U.S. presidents, evidence was found for a honeymoon and hangover effect in approval ratings over time. That is, presidential approval tended to be high early in the president's term and decrease over time. The effect of time on approval persisted even when military and economic indicators were included as predictors of presidential approval. More importantly, the effect of time on approval was moderated by charisma, such that charismatic leaders better maintained their approval rating over time. We take this as evidence that the honeymoon/hangover effect on presidential approval is substantively meaningful from a psychological perspective.     

Harsanyi power solution for games with restricted cooperation

This paper discusses the Harsanyi power solution for cooperative games in which cooperation among players is based on an arbitrary collection of feasible coalitions. We define the Harsanyi power solution as a value which distributes the Harsanyi dividends such that the dividend shares of players in each feasible coalition are proportional to the corresponding players’ participation index, (i.e., a power measure for players in the cooperation restrictions). When all coalitions can be formed in a game, the Harsanyi power solution coincides with the Shapley value. We provide two axiomatic characterizations for the Harsanyi power solution: one uses component efficiency and participation fairness, and the other uses efficiency and participation balanced contributions. Meanwhile, we show that the axioms of each axiomatization are logically independent. The study also shows that the Harsanyi power solution satisfies several other properties such as additivity and inessential player out. In addition, the Harsanyi power solution is the unique value that admits the \(\lambda \)-potential.     

UPSTREAM VOLATILITY IN THE SUPPLY CHAIN: THE MACHINE TOOL INDUSTRY AS A CASE STUDY

Cyclicality is a well‐known and accepted fact of life in market‐driven economies. Less well known or understood, however, is the phenomenon of amplification as one looks “upstream” in the industrial supply chain. We examine the amplification phenomenon and its implications through the lens of one upstream industry that is notorious for the intensity of the business cycles it faces: the machine tool industry. Amplification of demand volatility in capital equipment supply chains, e. g., machine tools, is particularly large relative to that seen in distribution and component parts supply chains. We present a system dynamics simulation model to capture demand volatility amplification in capital supply chains. We explore the lead‐time, inventory, production, productivity, and staffing implications of these dynamic forces. Several results stand out. First, volatility hurts productivity and lowers average worker experience. Second, even though machine tool builders can do little to reduce the volatility in their order streams through choice of forecast rule, a smoother forecasting policy will lead companies to retain more of their skilled work force. This retention of skilled employees is often cited as one of the advantages that European and Japanese companies have had relative to their U. S. competitors. Our results suggest some insights for supply chain design and management: downstream customers can do a great deal to reduce the volatility for upstream suppliers through their choice of order forecast rule. In particular, companies that use smoother forecasting policies tend to impose less of their own volatility upon their supply base and may consequently enjoy system‐wide cost reduction.     

Power Outage Estimation for Tropical Cyclones: Improved Accuracy with Simpler Models

In this article, we discuss an outage‐forecasting model that we have developed. This model uses very few input variables to estimate hurricane‐induced outages prior to landfall with great predictive accuracy. We also show the results for a series of simpler models that use only publicly available data and can still estimate outages with reasonable accuracy. The intended users of these models are emergency response planners within power utilities and related government agencies. We developed our models based on the method of random forest, using data from a power distribution system serving two states in the Gulf Coast region of the United States. We also show that estimates of system reliability based on wind speed alone are not sufficient for adequately capturing the reliability of system components. We demonstrate that a multivariate approach can produce more accurate power outage predictions.