Cross‐Section Regression with Common Shocks

This paper considers regression models for cross‐section data that exhibit cross‐section dependence due to common shocks, such as macroeconomic shocks. The paper analyzes the properties of least squares (LS) estimators in this context. The results of the paper allow for any form of cross‐section dependence and heterogeneity across population units. The probability limits of the LS estimators are determined, and necessary and sufficient conditions are given for consistency. The asymptotic distributions of the estimators are found to be mixed normal after recentering and scaling. The t, Wald, and F statistics are found to have asymptotic standard normal, χ², and scaled χ² distributions, respectively, under the null hypothesis when the conditions required for consistency of the parameter under test hold. However, the absolute values of t, Wald, and F statistics are found to diverge to infinity under the null hypothesis when these conditions fail. Confidence intervals exhibit similarly dichotomous behavior. Hence, common shocks are found to be innocuous in some circumstances, but quite problematic in others. Models with factor structures for errors and regressors are considered. Using the general results, conditions are determined under which consistency of the LS estimators holds and fails in models with factor structures. The results are extended to cover heterogeneous and functional factor structures in which common factors have different impacts on different population units.     

Decision Support by Interval SMART/SWING—Incorporating Imprecision in the SMART and SWING Methods

Interval judgments are a way of handling preferential and informational imprecision in multicriteria decision analysis (MCDA). In this article, we study the use of intervals in the simple multiattribute rating technique (SMART) and SWING weighting methods. We generalize the methods by allowing the reference attribute to be any attribute, not just the most or the least important one, and by allowing the decision maker to reply with intervals to the weight ratio questions to account for his/her judgmental imprecision. We also study the practical and procedural implications of using imprecision intervals in these methods. These include, for example, how to select the reference attribute to identify as many dominated alternatives as possible. Based on the results of a simulation study, we suggest guidelines for how to carry out the weighting process in practice. Computer support can be used to make the process visual and interactive. We describe the WINPRE software for interval SMART/SWING, preference assessment by imprecise ratio statements (PAIRS), and preference programming. The use of interval SMART/SWING is illustrated by a job selection example.     

On 3-Stage Clos Networks with Different Nonblocking Requirements on Two Types of Calls

Hwang and Lin introduced a new nonblocking requirement for 2-cast traffic which imposes different requirements on different types of coexisting calls. The requirement is strictly nonblocking for point-to-point calls among the 2-cast traffic, and is rearrangeable for genuine 2-cast calls. They conjectured that the 3-stage Clos network C(n,n,r,r,2n) satisfies the above requirement. We prove that C(n,n,4,r,2n) satisfies the above requirement.Supported in part by NSC91-2115-M009-002.Supported in part by the National Science Council under grant NSC91-2115-M009-010 and by the Li-Li-Tai-Yang Network Research Center of National Chiao Tung University.     

Current Constraints and Future Directions for Risk Adapted Land-Use Planning Practices in the High-Density Asian Setting of Ho Chi Minh City

The need to integrate adaptation efforts into land-use planning policies has been only recently recognized in Ho Chi Minh City. The city's latest planning guidance addresses both flooding resilience and mitigation of urban heat. This paper outlines the development contexts and the current barriers for adapted land-use planning within the city. The key challenge for land-use planning is communicating the important functions and services of open and natural urban spaces and effectively guiding the mainly individual developer-driven development. As the realization of non-structural adaptation measures is in strong contrast to the current market-driven private and short-term developer interests, the main development trajectories are questioned and synergies identified.     

Encounter Satisfaction in E‐tailing: Are the Relationships of Order Fulfillment Service Quality with its Antecedents and Consequences Moderated by Historical Satisfaction?

This study focuses on whether historical satisfaction with an e‐tailer (HSat) moderates baseline relationships in order fulfillment service quality models. HSat is defined as satisfaction with the e‐tailer spanning all transactions except the current encounter. Encounter satisfaction (ESat) is defined as the consumer's satisfaction with the current transaction. In the baseline model, four order fulfillment service quality (OFSQ) dimensions managerially relevant to consumer e‐tailing are examined: timeliness, availability, condition, and billing accuracy. The baseline structural model results support that OFSQ dimensions impact ESat, which in turn predicts two key consequences—repurchase intention and word‐of‐mouth. Adaptation theory is used to model the role of HSat, while controlling for transaction recency, vendor familiarity, and competitive pricing. HSat is shown to have pervasive main and interaction effects upon all baseline model relationships. These moderation effects have great managerial relevance. For example, the results illustrate a phenomenon similar to the service recovery paradox, wherein when a negative service encounter is followed by a highly positive service recovery event, previously dissatisfied consumers, as compared to previously satisfied consumers, respond with higher levels of current satisfaction. For managers, this finding is encouraging because policies that create highly positive events for consumers can thus supersede past negative experiences. Our results show however that HSat cannot be completely superseded by current OFSQ or current ESat.     

Long-term Success of Adaptation Strategies: Evidence from Finnish Companies

This study analyses the success of adaptation strategies applied by Finnish companies during the recession in 1989–93. Five different strategies emerged from data gleaned from a questionnaire answered by 750 companies. In the medium term, investment in new product development and marketing and in the acquisition of new customers was the most successful strategy while a strategy heavily based on negotiating finance contracts and restructuring was the most unsuccessful. To evaluate the long-term effects of adopted strategies, financial statements from 644 companies in 1994 and 1997 were analysed. The results supported the medium-term conclusions. In general, they suggested that in the long-term, active adaptation strategies are most likely to lead to sustained success whereas passive (financial) strategies are associated with a high risk of failure.     

Sequence Independent Lifting in Mixed Integer Programming

We investigate lifting, i.e., the process of taking a valid inequality for a polyhedron and extending it to a valid inequality in a higher dimensional space. Lifting is usually applied sequentially, that is, variables in a set are lifted one after the other. This may be computationally unattractive since it involves the solution of an optimization problem to compute a lifting coefficient for each variable. To relieve this computational burden, we study sequence independent lifting, which only involves the solution of one optimization problem. We show that if a certain lifting function is superadditive, then the lifting coefficients are independent of the lifting sequence. We introduce the idea of valid superadditive lifting functions to obtain good aproximations to maximum lifting. We apply these results to strengthen Balas' lifting theorem for cover inequalities and to produce lifted flow cover inequalities for a single node flow problem.     

Higher Education's Role in the Dialogue on Race

The university is a logical locus for discussionof the role race has played in our society. Perhaps noAmerican institution is more committed to free andopen dialogue than the university. Higher educationcan thus provide a context for the recognition ofissues as well as a forum for the resolution ofinitiatives. To date, however, university attempts atdiversity training have often imbued recipients withself-consciousness, usurping the unity implicit in theword `university' and evoking an even greater tendencytoward separatism. The university's traditional questfor truth has been subverted by a subtle and pervasivesense that some views are more correct than others,that openness is dangerous, and that some issues mighteven be taboo. At best, such an approach to diversityleads to a fragile stalemate among self-containedenclaves. By championing President Clinton's call fora dialogue on race, the university can restore itselfas an institution that puts honesty above all else.Not only is there a resonant rationale for theuniversity's central responsibility in this debate,but there is also a pedagogical means by which itsrole can be realized. This paper proposes a model forethnic dialogue relevant to either a text-based orissues-based class. Borrowing from pedagogy developedin professional schools, we believe that the tenets ofthe `case method' can create a climate conducive tothe substantive scrutiny of race, ethnicity, andprejudice in general. We argue that this dialogueshould not be a mere add-on to college life, butintegrated into existing curricula in the socialsciences, literature, and history. Heated debate canthen occur without anger, and race/ethnicity can bediscussed without fear of recrimination.Paradoxically, the very expression of ethnicity may bethe catalyst that eventually moves multiculturalismtoward interculturalism – where differences are nolonger articulated, measurable or even discernible.