Another Look at the Identification of Dynamic Discrete Decision Processes

This paper presents an econometric approach to estimate the behavioral effects of counterfactual policy experiments in the context of dynamic decision models where the current utility function and the distribution of unobservables are nonparametrically specified. Previous studies have shown that the identification of the current utility function in dynamic decision models requires of stronger assumptions than in static decision models. We show in this paper that knowledge of the current utility function (or of a 'normalized' utility function) is not necessary to identify counterfactual choice probabilities in dynamic models. To identify these counterfactuals we need the probability distribution of the unobservables and the difference between the present value of choosing always the same alternative and the present value of deviating one period from this strategy. We show that both functions are identified from the factual choice probabilities under similar conditions as in static decision models. Based on this result we propose a nonparametric procedure to estimate the behavioral effects of counterfactual experiments in dynamic decision models. We apply this method to evaluate the effects of an investment subsidy program in the context of a model of machine replacement.Dynamic discrete decision processes; Nonparametric Identification; Counterfactual experiments.

On the Prudence of Rewarding A While Hoping for B

In multiple-task hidden-action models, the (mis-)allocation of effort may play an important role for benefit creation. Signals which capture this benefit and which are used in incentive schemes should thus not only be judged by the noise and the associated costs but also by the mis-allocation which they induce. How can mis-allocation be measured? This article presents two requirements for such a measure (invariance and monotonicity) and analyses whether they are met by proposed measures of mis-allocation. All examined measures assert that an unbiased signal for benefit leads to the lowest mis-allocation. Here, the signal leading to the lowest mis-allocation is computed and shown to be unbiased for the benefit only under restrictive assumptions on the cost function (equal marginal costs for different tasks). Generally, using an unbiased signal does not imply the lowest mis-allocation.multitasking, LEN-model, hidden-action, moral hazard

Task Difficulty, Performance Measure Characteristics, and the Trade-Off between Insurance and Well-Allocated Effort

hidden action, multitasking,incentives

A conceptual framework for circular design

Design has been recognised in the literature as a catalyst to move away from the traditional model of take-make-dispose to achieve a more restorative, regenerative and circular economy. As such, for a circular economy to thrive, products need to be designed for closed loops, as well as be adapted to generate revenues. This should not only be at the point of purchase, but also during use, and be supported by low-cost return chains and reprocessing structures, as well as effective policy and regulation. To date, most academic and grey literature on the circular economy has focused primarily on the development of new business models, with some of the latter studies addressing design strategies for a circular economy, specifically in the area of resource cycles and design for product life extension. However, these studies primarily consider a limited spectrum of the technical and biological cycles where materials are recovered and restored and nutrients (e.g., materials, energy, water) are regenerated. This provides little guidance or clarity for designers wishing to design for new circular business models in practice. As such, this paper aims to address this gap by systematically analysing previous literature on Design for Sustainability (DfX) (e.g., design for resource conservation, design for slowing resource loops and whole systems design) and links these approaches to the current literature on circular business models. A conceptual framework is developed for circular economy design strategies. From this conceptual framework, recommendations are made to enable designers to fully consider the holistic implications for design within a circular economy

Maximum score estimation in the ordered response model

Estimation

Don’t aim too high: the potential costs of high aspirations

The higher our aspirations, the higher the probability that we have to adjust them downwards when forming more realistic expectations later on. This paper shows that the costs induced by high aspirations are not trivial. We first develop a theoretical framework to identify the factors that determine the effect of aspirations on expected utility. Then we present evidence from a lab experiment on the factor found to be crucial: the adjustment of reference states to changes in expectations. The results suggest that the costs of high aspirations can be significant, since reference states do not adjust quickly. We use a novel, indirect approach that allows us to infer the determinants of the reference state from observed behavior, rather than to rely on cheap talk.aspirations, reference state, expectations, individual utility, experiments

Testing for stochastic monotonicity

We propose a test of the hypothesis of stochastic monotonicity. This hypothesis is of interest in many applications in economics. Our test is based on the supremum of a rescaled U-statistic. We show that its asymptotic distribution is Gumbel. The proof is diffcult because the approximating Gaussian stochastic process contains both a stationary and a nonstationary part and so we have to extend existing results that only apply to either one or the other case. We also propose a refinement to the asymptotic approximation that we show works much better infinite samples. We apply our test to the study of intergenerational income mobility.

Improvement on Bill of Materials Formatting Process by Adopting Lean and Six Sigma Approaches - A Case Study in a Semiconductor Industry

This paper present an improvement project for the case of Bill of Materials (BOM) formatting process by adopting Lean and Six Sigma approaches. Currently, BOM formatting process involved repetitive tasks, where many of manual touches (manual computer mouse clicks), thus consumed a significant amount of time. The focus of Lean approach in this project is to identify and analyze the related wastes in the current BOM formatting process.  Several Lean tools are applied such as, Root Cause, Five Whys analysis and Value Stream Mapping (VSM) concept to analyze the problem. Six Sigma approach plays an important role to systematically carry out the improvement project based on it well known method called; Define, Measure, Analyze, Improve and Control (DMAIC). This paper gives an insight that the right application of Lean and Six Sigma approaches will significantly helped an organization to achieve operational excellence, where in this project it happens at BOM formatting process. Through this project, the case study company has improved (reducing) the BOM processing time from average 50 to 5 minutes, while manual touches reduced from 290 to 30 touches only. Furthermore, elimination of these wastes (waiting and motion) has increase work efficiency and contributes to a significant financial savings to $1680 per month

Expanding Industrial Architecture Through Creativity in Manufacturing

Throughout the decades, industrial firms have sought clearly in calling on industry production experts to production more producible prototypes for manufacturing purposes. This can typically be accomplished by evaluating the current product production manufacturing system capabilities, and difficulties often arise due to challenges to combining product description and manufacturing operations. This paper will discuss how advances in manufacturing (as new fabrication capabilities) will add to the industrial design space for product design engineers, enabling more design flexibility and increasing efficiency by eliminating and/or loosening constraints on product designs. The findings from a series of industrial case studies provide encouraging effects on how technological technologies will positively impact the growth of industrial design engineers' solution space. The findings from a series of industrial case studies provide encouraging effects on how technological technologies will positively impact the growth of industrial design engineers' solution space. To order to foster product creativity, design managers are expected to test new technologies, new design techniques and new manufacturing (working) practices. Keywords: Industrial Design; Design for X; Design to X, Product Innovation, Manufacturing Systems, Production Innovation. DOI: 10.7176/JRDM/71-05 Publication date: November 30th 202