Single-year and multi-year insurance policies in a competitive market

This paper examines the demand and supply of annual and multi-year insurance contracts with respect to protection against a catastrophic risk in a competitive market. Insurers who offer annual policies can cancel policies at the end of each year and change the premium in the following year. Multi-year insurance has a fixed annual price for each year and no cancellations are permitted at the end of any given year. Homeowners are identical with respect to their exposure to the hazard. Each homeowner determines whether or not to purchase an annual or multi-year contract so as to maximize her expected utility. The competitive equilibrium consists of a set of prices where homeowners who are not very risk averse decide to be uninsured. Other individuals demand either single-year or multi-year policies depending on their degree of risk aversion and the premiums charged by insurers for each type of policy.     

Relationship between Intellectual Capital and Knowledge Management: An Empirical Investigation

Two important streams of the literature have examined intellectual capital (IC) and knowledge management (KM). Surprisingly, they have developed in parallel, without any empirical research on the relationship between them. This article empirically examines how IC and KM affect each other, and also investigates their consequences, viewing three intermediate consequences (dynamic capabilities, efficiency, and innovativeness) to mediate their effects on firm performance. In addition, this article examines the effects of the organization's culture on IC and KM. To address these issues, a comprehensive model is developed and tested using a combination of survey and secondary data of 533 companies in Taiwan. The results support the theoretical model. Major findings include the following: IC affects KM and dynamic capabilities; KM facilitates innovation but not dynamic capabilities or IC; a learning culture facilitates IC and innovation but not KM; firm performance depends on efficiency and innovation, but not directly on dynamic capabilities; and efficiency does not depend on any of the other constructs in the study. The article's implications for research and practice are examined.     

An alternative estimator for randomized response sampling with continuous distributions from a dichotomous population

In this paper, we introduce an alternative estimator of a population proportion from a dichotomous population when using randomized response sampling with continuous randomizing distributions. We also propose the alternative use of exponential randomizing densities. The estimator is obtained by method of moments and is compared with Franklin's (1989) estimator using normal and exponential distributions. The proposed estimator is more efficient than Franklin's (1989) estimator under suitable conditions for the two distributions.     

Minimum statuses of connected graphs with fixed maximum degree and order

The status of a vertex in a connected graph is the sum of distances between the vertex and all vertices. The minimum status of a connected graph is the minimum of statuses of all vertices of this graph. In this paper we obtain the sharp lower bound and the sharp upper bound on the minimum status of a connected graph with maximum degree k and order n. All the graphs attaining the lower bound are obtained, and a necessary condition is given for those graphs attaining the upper bound.     

An inferential procedure for the probability of passing the USP dissolution test

Dissolution is one of the tests that is required and specified by the United States Pharmacopeia and National Formulary (USP/NF) to ensure that the drug products meet the standards of the identity, strength, quality, purity, and stability. The sponsors also establish the in‐house specifications for the mean and standard deviation of the dissolution rates to guarantee a high probability of passing the USP/NF dissolution test. However, the USP/NF dissolution test is a complicated three‐stage sampling plan that involves both the sample mean dissolution rate of all units and the dissolution rate of individual units. It turns out that the true probability of passing the USP/NF dissolution is formidable to compute analytically even when the population mean and variance of dissolution rates are known. It is not clear that previously proposed methods are the estimators of the true probability for passing the USP dissolution test. Therefore, we propose to employ a parametric bootstrap method in conjunction with the Monte Carlo simulation to obtain the sampling distribution of the estimated probabilities of passing the USP/NF dissolution test and hence the confidence interval for the passing probability. In addition, a procedure is proposed to test whether the true probability of passing the USP/NF dissolution test is greater than some specified value. A numerical example illustrates the proposed method. Copyright © 2011 John Wiley & Sons, Ltd.     

A Reflective Review of Disruptive Innovation Theory

Disruptive Innovation Theory has created a significant impact on management practices and aroused plenty of rich debate within academia. Copious as the studies are, the scattered and conflicting nature of the literature on disruptive innovation in the last decade may pose a state of ambiguity for future research, thus necessitating a comprehensive review at this juncture. This paper first clarifies the basic concept and potential misinterpretations of the theory. Believing in the predictive value of the theory on firm performance, the authors then summarize and critique the research on how to enable potential disruptive innovation from internal, external, marketing and technology perspectives. The different perspectives inspired the authors to identify a number of key research directions within the disruptive innovation research domain. Potential future research is also briefly discussed by integrating disruptive innovation with other research domains, such as open innovation. Finally, in addition to theoretical contributions, the authors make practical contributions by outlining a series of potential inhibitors and enablers of disruptive innovation as managerial ‘take‐aways’.     

Does Inequality Cause a Difference in Altruism Between the Rich and the Poor? Evidence from a Laboratory Experiment

Increasing research evidence indicates that economic inequality leads the rich to be less generous than the poor. While compelling, the underling mechanism of the finding remains elusive. We conduct a laboratory experiment to investigate how inequality influences people’s behavior in a sharing game. We test varying causes of inequality to see how people share payoffs with others when inequality is caused respectively by chance, competition, and choice. The experiment result shows that the rich give less than the poor only when inequality is self-chosen. Yet, different from findings in previous studies, increasing inequality does not reinforce, but instead mitigates the negative relationship of income and giving. Our study suggests that research on the consequences of inequality should be careful on discerning whether self-choice of inequality could account for the spurious effect of inequality on people’s prosocial behavior.