Mortgage Terminations,Heterogeneity and the Exercise of Mortgage Options

As applied to the behavior of homeowners with mortgages, option theory predicts that mortgage prepayment or default will be exercised if the call or put option is ‘in the money’ by some specific amount. Our analysis: tests the extent to which the option approach can explain default and prepayment behavior; evaluates the practical importance of modeling both options simultaneously; and models the unobserved heterogeneity of borrowers in the home mortgage market. The paper presents a unified model of the competing risks of mortgage termination by prepayment and default, considering the two hazards as dependent competing risks that are estimated jointly. It also accounts for the unobserved heterogeneity among borrowers, and estimates the unobserved heterogeneity simultaneously with the parameters and baseline hazards associated with prepayment and default functions. Our results show that the option model, in its most straightforward version, does a good job of explaining default and prepayment, but it is not enough by itself. The simultaneity of the options is very important empirically in explaining behavior. The results also show that there exists significant heterogeneity among mortgage borrowers. Ignoring this heterogeneity results in serious errors in estimating the prepayment behavior of homeowners.     

In the eye of the beholder? An eye-tracking experiment on emergent leadership in team interactions

Integrating evolutionary signaling theory with a social attention approach, we argue that individuals possess a fast, automated mechanism for detecting leadership signals in fellow humans that is reflected in higher visual attention toward emergent leaders compared to non-leaders. To test this notion, we first videotaped meetings of project teams and collected leadership ratings for the team members from three rating sources. Second, we provided 18 naïve observers with 42 brief, muted video clips of the team meetings and analyzed their eye gazing patterns. Observers gazed at emergent leaders more often, and for an average longer duration, than at non-leaders. Gender effects occurred such that male emergent leaders received a higher number of fixations than female emergent leaders. Non-verbal behavior analysis indicated that emergent leaders showed a higher amount of active gestures and less passive facial expressions than non-leaders. We discuss theoretical and methodological directions for emergent leadership research in teams.     

A Modeling Framework for Supply Chain Simulation: Opportunities for Improved Decision Making*

Owing to its inherent modeling flexibility, simulation is often regarded as the proper means for supporting decision making on supply chain design. The ultimate success of supply chain simulation, however, is determined by a combination of the analyst's skills, the chain members' involvement, and the modeling capabilities of the simulation tool. This combination should provide the basis for a realistic simulation model, which is both transparent and complete. The need for transparency is especially strong for supply chains as they involve (semi)autonomous parties each having their own objectives. Mutual trust and model effectiveness are strongly influenced by the degree of completeness of each party's insight into the key decision variables. Ideally, visual interactive simulation models present an important communicative means for realizing the required overview and insight. Unfortunately, most models strongly focus on physical transactions, leaving key decision variables implicit for some or all of the parties involved. This especially applies to control structures, that is, the managers or systems responsible for control, their activities and their mutual attuning of these activities. Control elements are, for example, dispersed over the model, are not visualized, or form part of the time‐indexed scheduling of events. In this article, we propose an alternative approach that explicitly addresses the modeling of control structures. First, we will conduct a literature survey with the aim of listing simulation model qualities essential for supporting successful decision making on supply chain design. Next, we use this insight to define an object‐oriented modeling framework that facilitates supply chain simulation in a more realistic manner. This framework is meant to contribute to improved decision making in terms of recognizing and understanding opportunities for improved supply chain design. Finally, the use of the framework is illustrated by a case example concerning a supply chain for chilled salads.     

Land Use Regulation and Welfare

We evaluate the effect of land use regulation on the value of land and on welfare. Our estimates are based on a decomposition of the effects of regulation into three components: an own‐lot effect, which reflects the cost of regulatory constraints to the owner of a parcel; an external effect, which reflects the value of regulatory constraints on one's neighbors; a supply effect, which reflects the effect of regulated scarcity of developable land. Using this decomposition, we arrive at a novel strategy for estimating a plausibly causal effect of land use regulation on land value and welfare. This strategy exploits cross‐border changes in development, prices, and regulation in regions near municipal borders. Our estimates suggest large negative effects of regulation on the value of land and welfare in these regions.     

Alternative Mechanisms Guiding Salespersons’ Ambidextrous Product Selling

Ambidextrous product‐selling strategies, in which companies’ salespeople concurrently pursue the sale of existing and new products, are hard to implement. Previous studies have addressed this issue for relatively simple consumer settings with the manager in close proximity to the salespersons and focusing on different levels of control and autonomy to resolve this issue. However, little is known about how field salespeople can be influenced to pursue such dual goals proactively for more complex business‐to‐business products. In this study, the authors distinguish between salespeople's proactive selling behaviour for new and existing products, and study the impact of two alternative mechanisms: a situational mechanism (i.e. perceived manager product‐selling ambidexterity) and a structural mechanism (i.e. salesperson organizational identification). Using a time‐lagged, multisource data set from a large ambidextrous company, the authors demonstrate that both mechanisms contribute to salespeople's proactive selling of new and existing products, but also act as each other's substitutes. The results suggest two most likely strategies for salespeople to obtain overall sales targets: focusing on existing product selling; or acting ambidextrously. The latter approach offers the benefits of better achieving ambidextrous company sales goals and of greater performance stability, and is thus preferred.     

Technological sensibilities and the cyberpolitics of gender: Donna haraway's postmodern feminism

In this article, I discuss the far reaching implications of Donna Haraway's cyborg feminism for social and cultural theory. I argue that it allows us to re‐think the collapse of modernity not so much as the death of the social and the death of the subject, but as the eclipse of ‘Modern Man’ as the ‘natural’ anchorage of views from nowhere. Highlighting the inevitable particularism of embodiment, her notion of the cyborg marks the possibility of differential politics which combine critique with agonistique. Such an alliance could serve as particularly effective way of working through the challenge of postmodernity without either surrendering to ‘anything goes’ liberal pluralism or the romantic desperation of nihilistic fatalism.     

Measuring Young Children's Perceptions of Support, Control, and Maintenance in Their Own Social Networks

Thirty‐eight children (aged 3;7–7;6) and one of their parents took part in a study concerning children's perceptions of their social networks. The study made use of a newly developed instrument—the Support, Control and Maintenance Pictures Interview (SCAMPI). The SCAMPI offers an individualized testing environment, employing computer presentation of questions based on photographs of significant persons familiar to the child. SCAMPI is designed to allow data analysis to be carried out with the aid of built‐in statistical procedures based on permutation and bootstrap techniques that are optimally adapted to the requirements of individualized testing. The study examines the differentiations young children make between persons in their social networks and the functions they fulfil, the level of agreement between children and their parents and the stability of the children's responses.     

Altruistic Preferences for Life-Saving Public Programs: Do Baseline Risks Matter?

Cost-benefit analyses of life-saving public programs typically focus on the number of expected deaths avoided (statistical lives saved) as the metric for evaluating benefits. Although this measure of population risk is clearly important, it ignores the distribution of underlying individual risks. A similar number of lives can be saved by protecting relatively large populations with relatively low baseline risk as can be saved by protecting smaller populations faced with higher baseline risks. Should the value of saving a statistical life be sensitive to the baseline levels of risk to exposed individuals? This paper addresses this issue by focusing specifically on individuals’ altruistic values with regard to life-saving programs. Using results from a survey, this study finds that when individuals are asked to state their preference for equally costly life-saving programs that will only affect others’ level of risk, they prefer those that save more lives. More importantly, however, controlling for the number of lives saved, they also prefer programs that affect smaller populations facing higher levels of baseline risk. Furthermore, the results suggest that each order-of-magnitude increase in the level of baseline risk to others approximately doubles the altruistic value component of a statistical life saved.     

PREDICTION-FOCUSED MODEL SELECTION FOR AUTOREGRESSIVE MODELS

In order to make predictions of future values of a time series, one needs to specify a forecasting model. A popular choice is an autoregressive time‐series model, for which the order of the model is chosen by an information criterion. We propose an extension of the focused information criterion (FIC) for model‐order selection, with emphasis on a high predictive accuracy (i.e. the mean squared forecast error is low). We obtain theoretical results and illustrate by means of a simulation study and some real data examples that the FIC is a valid alternative to the Akaike information criterion (AIC) and the Bayesian information criterion (BIC) for selection of a prediction model. We also illustrate the possibility of using the FIC for purposes other than forecasting, and explore its use in an extended model.     

Positioning and role of public relations in large Belgian organizations

This paper studies the position and role of public relations in the hierarchical structure of Belgian organizations of at least 50 employees. Empirical data was collected from a web survey (n = 750) to find out to what extent principles of excellence in public relations are applied in Belgium.