Optimal stopping for Brownian motion with applications to sequential analysis and option pricing

Herman Chernoff made fundamental contributions to analytical and computational methods for solving optimal stopping problems for Brownian motion. He also showed how these optimal stopping problems are closely related to some basic problems in sequential analysis and singular stochastic control. This paper gives a survey of these and related developments and describes some recent applications to option valuation in financial economics.     

Corporate Performance Implications of Relational Demographic Differences: On Age and Titles of Chairpersons versus General Managers of Listed Chinese Companies

By analysing archival data of 5451 Chinese listed companies, this investigation offers insights into how the relational demographic differences between the highest ranking executives (chairperson and general manager) may affect corporate performance in a Chinese cultural context. Overall, the findings derived from the regression analyses reveal that, for status‐laden demographic attributes such as age and title possession, relational‐norm‐consistent demographic differences lead to better corporate performance. In addition, the findings highlight that relational demographic homogeneity in terms of title possession also boosts corporate performance. Furthermore, this investigation provides empirical evidence for the significant moderating effect of industry sales growth on the relationship between the relational demographic difference in title possession and corporate performance. The finding suggests the importance of adopting a contingent approach to appoint the chairperson and general manager in line with relevant industry conditions.     

Subjective Residential Environment and its Implications for Quality of Life Among University Students in Hong Kong

This paper reports the results of a convenient sample survey of 500 Hong Kong university students conducted in May 2003. The main aim of the survey was to investigate the respondents perception of the residential environment and its implications for the quality of life (QOL). Results indicated that the respondents were generally satisfied with the residential environment, scoring a mean satisfaction rating of 3.32, on a 5-point Likert scale. The type, size and age of a respondents home, years of occupancy and attending university were found to be significantly related to the overall satisfaction. Transport (4.37), environmental quality (4.30), and public utilities (4.25) were reported to be the most important infrastructures for the QOL, but environmental quality (3.21), education (3.11) and greening (2.98) were considered to be the least satisfactory ones. The desirable distribution of facilities and services was defined by their functions and the new urban designs were appreciated by the respondents. Although available space was less than the ideal and public transport was a serious concern, the respondents had adapted well to the high-density environment and enjoyed the urban life in Hong Kong. It is hoped that the results and findings of this study can provide a reference for the formulation of future development strategy in Hong Kong.     

Scheduling of Multi‐skilled Staff Across Multiple Locations

We address the problem of assigning airline customer service agents (CSAs) to tasks related to departing flights, such as selling tickets and collecting boarding cards, at an international terminal of a large airport. The airline specifies minimum and target levels of staff and required (or desired) types and levels of skills for each location in each time period. The assignment problem is complicated by staff heterogeneity, time required for moves between locations, and lunch and rest‐break requirements. We present a mixed‐integer formulation that considers both staffing shortages and skills mismatches and show that the problem is NP‐hard. We derive valid inequalities that tighten the bounds within a branch‐and‐cut procedure, enabling us to obtain near‐optimal solutions for problems of realistic size very quickly. We also present a generalization to simultaneously optimize shift starting times and task assignments, which can aid in longer term workforce planning. Finally, we utilize our procedure to obtain managerial insights regarding the benefits of flexibility derived from more highly skilled staff, allowing more frequent moves, and choices of shift starting times. We also demonstrate the benefits of our procedure vs. a heuristic that mimics what an experienced scheduler might choose.     

A Bayesian Method to Mine Spatial Data Sets to Evaluate the Vulnerability of Human Beings to Catastrophic Risk

Vulnerability of human beings exposed to a catastrophic disaster is affected by multiple factors that include hazard intensity, environment, and individual characteristics. The traditional approach to vulnerability assessment, based on the aggregate‐area method and unsupervised learning, cannot incorporate spatial information; thus, vulnerability can be only roughly assessed. In this article, we propose Bayesian network (BN) and spatial analysis techniques to mine spatial data sets to evaluate the vulnerability of human beings. In our approach, spatial analysis is leveraged to preprocess the data; for example, kernel density analysis (KDA) and accumulative road cost surface modeling (ARCSM) are employed to quantify the influence of geofeatures on vulnerability and relate such influence to spatial distance. The knowledge‐ and data‐based BN provides a consistent platform to integrate a variety of factors, including those extracted by KDA and ARCSM to model vulnerability uncertainty. We also consider the model's uncertainty and use the Bayesian model average and Occam's Window to average the multiple models obtained by our approach to robust prediction of the risk and vulnerability. We compare our approach with other probabilistic models in the case study of seismic risk and conclude that our approach is a good means to mining spatial data sets for evaluating vulnerability.     

The perceived importance of family‐friendly policies to childbirth decision among Hong Kong women

Wong C‐K, Tang K‐L, Ye S. The perceived importance of family‐friendly policies to childbirth decision among Hong Kong women Int J Soc Welfare 2011: 20: 381–392 © 2010 The Author(s), Journal compilation © 2010 Blackwell Publishing Ltd and the International Journal of Social Welfare. Declining fertility is a problem in many advanced industrialised countries, calling for government action. While positive findings have been established between family policies and fertility levels in European countries, empirical studies on family‐friendly policies and their impact on fertility levels have been few and far between in East Asia. Based on a random telephone survey of 645 young women, this study examined the perceived importance of family‐friendly policies to childbirth among Hong Kong women of childbearing age. Also investigated was whether public policies could have an impact on the decision to have a child. The findings give support to both the risk‐society theory and the rationality theory; family‐friendly policies such as tax credits, extended childcare and flexitime enhance the risk management capacity of women and reduce the cost of child rearing. The study also found that demographic factors such as age, education, and having children or not are significant to the intent to bear children.     

Is cash allowance a way to ease child care burden? Views of carers in Hong Kong

Caring for the carers is not only a policy challenge for the government but also a global concern to achieve gender equality by restructuring welfare for care. Paying informal carers is one of the measures that address their needs, which is being practiced in Western countries for more than 10 years now. Financial support for care does not only value the contribution of carers but also compensate for the loss of carers caused by unpaid care duties. However, cash for care is a complex issue because it is located within a number of different policy domains that may be considered controversial. This study discusses the views of carers on cash allowance and identifies issues affecting the support provided to the informal care system in Hong Kong. The discussion is based on the findings from the focus group interviews with 11 groups of carers with different socioeconomic backgrounds.     

Changing needs and changing service delivery for long-term care in Hong Kong

Both the need for and delivery of long-term care in Hong Kong are shaped by the interaction of the traditional and modern. Rapid social change is affecting traditional family structures and roles in care of the elderly, resulting in increased demand for formal care, which to date has been provided mainly by way of residential care. This growth of demand will escalate with rapid population aging in coming decades. In response to this burgeoning demand, current planning is seeking to reshape the established service system and tackle problems in service delivery in ways that will address the bias towards residential care and improve quality of care.     

Challenges of Hong Kong toy manufacturers operating plants in the Pearl River Delta

For years, Hong Kong has been the worlds largest toy exporter. However, as the costs of rent and labor have increased drastically over the past years, Hong Kong toy manufacturers have moved their labor-intensive operations to other lower-wage areas. The Pearl River Delta (PRD) region of the Peoples Republic of China (PRC) has been one of their favorite choices for outsourcing because of cheap and available labor. This paper explores, using data culled from interviews with the senior management of five leading Hong Kong toy companies, how some Hong Kong toy manufacturers overcame various strategic management issues after having made the move to the PRD. The results are presented within five major areas of concern: rules and regulations, the less-developed infrastructure, R&D, relationship with suppliers, and new technology, and they are used to show how the manufacturers were able to overcome various strategic constraints in order to accomplish outstanding performance. Supporting data were gathered through factory visits in order to better understand the actual operations within the PRD. This collected experience should be beneficial to other manufacturers interested in operating plants within the PRD.     

Common correlates of suicidal ideation and physical assault among male and female university students in Hong Kong

This study examined prevalence and correlates of suicidal ideation and dating partner violence in a cohort of 651 university students in social sciences classes at three universities in Hong Kong. A standard questionnaire was completed within one class period to examine the rates of occurrence of physical assault perpetration and suicidal ideation. Separate rates are presented for male and female perpetrators and for severe and overall levels of violence. The differences between subjects having suicidal ideation are compared using t tests. Logistic regression is used to predict the presence or absence of physical assault in the preceding year of reporting and suicidal ideation based on the variables such as Personal Relationship Profile, age, relationship length, and socioeconomic status. Results showed that 55% of suicidal persons had a history of violence, whereas 39% of violent people had a history of suicidal ideation. Logistic regression showed that physical assault shared a total of seven associated factors with suicidal ideation. Suicidal ideation seems to have no direct relation to physical and sexual assault, but they do share some common associated factors that are essential for the development of suicide prevention.