Psychic distance, psychic distance paradox and behavioral economics: Modeling MNC entry behavior in foreign markets

Assuming that MNCs face a much more complex environment that local enterprizes, the paper begins by discussing what economist Beckerman called psychic distance. After a historical discussion of this concept, I also discuss what O’Gardy and Lane called psychic distance paradox. Then, I argue that these two concepts have a great deal of relevance beyond their original intent of international trade-they are also relevant to FDI and all other formas of international production and exchange. Next, I argue, as I have done in several previous papers, that behavioral economics has a great deal of relevance to FDI and international productive activity; I also argue that behavioral economics can be utilized to describe the concepts of psychic distance and psychic distance paradox. Then, I develop a behavioral economics-based model that can explain the concepts of psychic distance and psychic distance paradox, and their relevance to the modes of entry of MNCs in international markets. In doing so, I argue that FDI and MNC behavior in general need not be explained outside of economics, since, in contrast to neo-classical economics, behavioral economics is capable of capturing the complexities of global markets.     

Development and Consideration of Global Policies for Managing the Future Risks of Poliovirus Outbreaks: Insights and Lessons Learned Through Modeling

The success of the Global Polio Eradication Initiative promises to bring large benefits, including sustained improvements in quality of life (i.e., cases of paralytic disease and deaths avoided) and costs saved from cessation of vaccination. Obtaining and maintaining these benefits requires that policymakers manage the transition from the current massive use of oral poliovirus vaccine (OPV) to a world without OPV and free of the risks of potential future reintroductions of live polioviruses. This article describes the analytical journey that began in 2001 with a retrospective case study on polio risk management and led to development of dynamic integrated risk, economic, and decision analysis tools to inform global policies for managing the risks of polio. This analytical journey has provided several key insights and lessons learned that will be useful to future analysts involved in similar complex decision-making processes.     

A New Generalized Exponential Geometric Distribution

In this article, another version of the generalized exponential geometric distribution different to that of Silva et al. (2010 Silva , R. B. , Barreto-Souza , W. , Cordeiro , G. M. ( 2010 ). A new distribution with decreasing, increasing and upside-down bathtub failure rate. Computat. Statist. Data Anal. 54: 935–944 . [Google Scholar]) is proposed. This new three-parameter lifetime distribution with decreasing, increasing, and bathtub failure rate function is created by compounding the generalized exponential distribution of Gupta and Kundu (1999 Gupta , R. D. , Kundu , D. ( 1999 ). Generalized exponential distributions . Austral. NZ J. Statist. 41 ( 2 ): 173 – 188 .[Crossref], [Web of Science ®] , [Google Scholar]) with a geometric distribution. Some basic distributional properties, moment-generating function, rth moment, and Rényi entropy of the new distribution are studied. The model parameters are estimated by the maximum likelihood method and the asymptotic distribution of estimators is discussed. Finally, an application of the new distribution is illustrated using the two real data sets.     

Trends in cardiovascular diseases and associated risks in sub-Saharan Africa: a review of the evidence for Ghana,Nigeria, South Africa,Sudan and Tanzania

Background: Sub-Saharan Africa (SSA) countries are facing an epidemiological shift from infectious disease to chronic diseases, such as cardiovascular diseases (CVDs). CVDs incidence in SSA are frequently attributed to the prevalence of hypertension, diabetes, and overweight/obesity. Nevertheless, some researchers contend that CVDs are not a priority public health problem in SSA.

Method: This paper systematically reviews the evidence on CVDs and their relation with hypertension, diabetes mellitus and obesity/overweight in Ghana, Nigeria, South Africa, Sudan and Tanzania. The publication’s content was analyzed qualitatively using the directed content analysis method and the results were presented in a tabular format.

Result: The paper illustrates the rising prevalence of CVDs as well as the three related risk conditions in the selected SSA countries.

Conclusion: The review indicates a poor health system response to the increasing risk of CVDs in SSA. The conditions and major drivers that contribute to this underlying increasing trend need to be further studied.     

CATASTROPHE AND RATIONAL POLICY: CASE OF NATIONAL SECURITY

Predicting catastrophes involves heavy‐tailed distributions with no mean, eluding proactive policy as expected cost‐benefit analysis fails. We study US government counterterrorism policy, given heightened risk of terrorism. But terrorism also involves human behavior. We synthesize the behavioral and statistical aspects in an adversary‐defender game. Calibration to extensive data shows that where a Weibull distribution is the best predictor, US counterterrorism policy is rational (and optimal). Here, we estimate the adversary's unobserved variables, e.g., difficulty of an attack. We also find cases where the best predictor is a Generalized‐Pareto with no finite mean and rational policy fails. Here, we offer “work‐arounds”. (JEL H56, D81, C46)     

Bayesian composite Tobit quantile regression

Composite quantile regression models have been shown to be effective techniques in improving the prediction accuracy [H. Zou and M. Yuan, Composite quantile regression and the oracle model selection theory, Ann. Statist. 36 (2008), pp. 1108–1126; J. Bradic, J. Fan, and W. Wang, Penalized composite quasi-likelihood for ultrahighdimensional variable selection, J. R. Stat. Soc. Ser. B 73 (2011), pp. 325–349; Z. Zhao and Z. Xiao, Efficient regressions via optimally combining quantile information, Econometric Theory 30(06) (2014), pp. 1272–1314]. This paper studies composite Tobit quantile regression (TQReg) from a Bayesian perspective. A simple and efficient MCMC-based computation method is derived for posterior inference using a mixture of an exponential and a scaled normal distribution of the skewed Laplace distribution. The approach is illustrated via simulation studies and a real data set. Results show that combine information across different quantiles can provide a useful method in efficient statistical estimation. This is the first work to discuss composite TQReg from a Bayesian perspective.     

George Katona: A founding father of old behavioral economics

Assuming the division of behavioral economics into old and new, the paper begins to argue that old behavioral economics began with the works of two giants – George Katuna and Herbert Simon during the 1950s and early 1960s. The contributors of Herbert Simon are well established, thanks to the popularity of bounded rationality and satisficing, and his being award Noble Prize in economics. However, economists are much less familiar with the contributions of George Katona that can be viewed as the father of behavioral economics. Furthermore, the author argues that Katona was also misunderstood by various economists when he was attempting to create a psychologically based economics that rejected the mechanistic psychology of neoclassical economics and introducing the survey method to economic research that he had been using in his experimental psychology research previously. He also had influenced various economists during their debates in the 1950s without given the credit for. Many historians of behavioral economics limit Katona's contributions to the start of behavioral economics only to his contributions to macroeconomics. However, the paper demonstrates that Katona's behavioral economics included his contributions to macroeconomics (bringing realism to Keynesian consumption function and consumption behavior), micro-economics (business behavior, the rationality assumption, etc.), public finance and economic policy, and his introduction of the survey method. To demonstrate these contributions, the author argues that Katona attempted to bring realism to economic analysis – through psychological concepts – beginning with his early days of research in Germany which coincided with German hyper inflation- and continued whether working at New school for Social Research, Chicago University's Cowles Commission, the U.S. Department of Agriculture, or the University of Michigan's Survey Research Center. The author also argues that Katona's contributions went through stages, depending upon what economic problem persisted at the time, what advertises he was facing, and what institution/organization he was associated with.     

Complexity and Competition

Extensive‐form market games typically have a large number of noncompetitive equilibria. In this paper, we argue that the complexity of noncompetitive behavior provides a justification for competitive equilibrium in the sense that if rational agents have an aversion to complexity (at the margin), then maximizing behavior will result in simple behavioral rules and hence in a competitive outcome. For this purpose, we use a class of extensive‐form dynamic matching and bargaining games with a finite number of agents. In particular, we consider markets with heterogeneous buyers and sellers and deterministic, exogenous, sequential matching rules, although the results can be extended to other matching processes. If the complexity costs of implementing strategies enter players’ preferences lexicographically with the standard payoff, then every equilibrium strategy profile induces a competitive outcome.     

Risk Management in a Polio-Free World

Inherent in the decision to launch the Global Polio Eradication Initiative in 1988 was the expectation for many people that immunization against poliomyelitis would eventually simply stop, as had been the case with smallpox following its eradication in 1977. However, the strategies for managing the risks associated with a "polio-free" world must be continuously refined to reflect new developments, particularly in our understanding of the live polioviruses in the oral poliovirus vaccine (OPV) and in the international approach to managing potential biohazards. The most important of these developments has been the confirmation in 2000 that vaccine-derived polioviruses (VDPVs) can circulate and cause polio outbreaks, making the use of OPV after interruption of wild poliovirus transmission incompatible with a polio-free world. A comprehensive strategy has been developed to minimize the risks associated with eventual OPV cessation, centered on appropriate long-term biocontainment of poliovirus stocks (whether for vaccine production, diagnosis, or research), the controlled reintroduction of any live poliovirus vaccine (i.e., from an OPV stockpile), and appropriate use of the inactivated poliovirus vaccine (IPV). Although some aspects of this risk management strategy are still debated, there is wide agreement that no strategy would entirely eliminate the potential risks to a polio-free world. The current strategy for risk management in a polio-free world will continue to evolve with better characterization of these risks and the development of more effective approaches both to reduce those risks and to limit their consequences should they occur.     

Seasonality and vertical structure of light-attracted insect communities in a dipterocarp forest in Sarawak

Nocturnal flying insects were collected monthly for 13 months using ultra violet light-traps set at various vertical levels in a weakly-seasonal, tropical lowland dipterocarp forest in Sarawak, Malaysia. Abundance, faunal composition, size distribution and guild structure of these samples were analyzed with respect to temperal and vertical distributions. The nocturnal flying insect community in the canopy level was highly dominated by fig wasps (84%) in individual number, and by scarabaeid beetles (28%) in weight. A principal component analysis on monthly catches detected non-random, seasonal trends of insect abundance. The first two principal trends were an alternation of wetter (September to January) and less wet seasons (February to August) and an alternation between the least wet (January to March) and the other seasons. Many insect groups were less abundant in the least wet season than the other seasons, whilst inverse patterns were found in Scarabaeidae and Tenebrionidae. Significantly positive and negative correlations between monthly catch and rainfall were detected only in ovule-feeders and in phloem-feeders, respectively. Delayed, significant negative correlations between monthly catch and 1–3 month preceding rainfall were more frequently detected in phytophages, phloem-feeders, seed-feeders, wood-borers and scavengers. The peak in abundance along vertical levels were found at the canopy level (35 m) for phloem-, ovule-, seed-, root-, fungal-feeders and nectar collectors, at an upper subcanopy level (25 m) for scavengers and aquatic predators, and at a middle subcanopy level (17 m) for ants. Catches at the emergent level (45 m) did not exceed those at the canopy level.