Corporate Management of Highly Dynamic Risks: The Case of Terrorism Insurance in Germany

This article extends the theory of corporate risk management to encompass highly dynamic risks. Taking Viscusi'�s (1989) prospective reference from the context of individual decision making and applying it to a corporate context we propose a theory of how corporations process new information. Using unique data on all terrorism insurance policies sold in Germany we find support for this concept of risk-updating by showing that the demand for terrorism insurance is strongly determined by the recent occurrence of terrorist attacks.Corporate Insurance, Risk Management, Terrorism Insurance, Expected Utility, Prospect Theory

Evaluating aggregate functions on possibilistic data

The need for extending information management systems to handle the imprecision of information found in the real world has been recognized. Fuzzy set theory together with possibility theory represent a uniform framework for extending the relational database model with these features. However, none of the existing proposals for handling imprecision in the literature has dealt with queries involving a functional evaluation of a set of items, traditionally referred to as aggregation. Two kinds of aggregate operators, namely, scalar aggregates and aggregate functions, exist. Both are important for most real-world applications, and are thus being supported by traditional languages like SQL or QUEL. This paper presents a framework for handling these two types of aggregates in the context of imprecise information. We consider three cases, specifically, aggregates within vague queries on precise data, aggregates within precisely specified queries on possibilistic data, and aggregates within vague queries on imprecise data. These extensions are based on fuzzy set-theoretical concepts such as the extension principle, the sigma-count operation, and the possibilistic expected value. The consistency and completeness of the proposed operations is shown

The Distinct Effects of Information Technology and Communication Technology on Firm Organization

Guided by theories of management by exception, we study the impact of Information and Communication Technology on worker and plant manager autonomy and on span of control. We find, using an original dataset of American and European manufacturing firms, that better information technologies (Enterprise Resource Planning for plant managers and CAD/CAM for production workers) are associated with more autonomy and a wider span, while technologies that improve communication (like data intranets) decrease autonomy for workers and plant managers, consistently with the theory. Using instrumental variables (distance from ERP's birthplace and heterogeneous telecommunication costs arising from regulation) strengthens our results.organization, delegation, information technology, communication technology, the theory of the firm

Being Healthy: a Grounded Theory Study of Help Seeking Behaviour among Chinese Elders living in the UK

The health of older people is a priority in many countries as the world’s population ages. Attitudes towards help seeking behaviours in older people remain a largely unexplored field of research. This is particularly true for older minority groups where the place that they have migrated to presents both cultural and structural challenges. The UK, like other countries,has an increasingly aging Chinese population about who relatively little is known. This study used a qualitative grounded theory design following the approach of Glaser (1978). Qualitative data were collected using semi-structured interviews with 33 Chinese elders who were aged between 60 and 84, using purposive and theoretical sampling approaches. Data were analysed using the constant comparative method until data saturation occurred and a substantive theory was generated. ‘Being healthy’ (the core category) with four interrelated categories: self-management, normalizing/minimizing, access to health services, and being cured form the theory. The theory was generated around the core explanations provided by participants and Chinese elders’ concerns about health issues they face in their daily life. We also present data about how they direct their health-related activities towards meeting their physical and psychological goals of being healthy. Their differential understanding of diseases and a lack of information about health services were potent predictors of non�help seeking and ‘self’ rather than medical management of their illnesses. This study highlights the need for intervention and health support for Chinese elders

Book review on: Max Boisot, Ian MacMillan, and Keyong Seok Han, Explorations in Information Space: Knowledge, Actors, and Firms, 2007, Oxford University Press,

Much has been written about knowledge management and value creation. But a real theoretical framework for the creation and the distribution of knowledge is lacking in much of the work done so far.In fact, with the rise of the knowledge economy, economic value is increasingly seen as relying on intangible assets rather than physical assets. Strategies for managing knowledge thus become of central concern. This is one of the reasons why "knowledge" has been so crucial for economic and management fields over the last two decades. But since "knowledge" is not only bare data, or information, but rather the result of a process involving space and time, the nature of knowledge takes a strategic dimension. Across disciplines and functional borderlines, philosophers, economists, sociologists, organisational theorists as well as managers, have debated the nature of knowledge without a real theoretical consensus.This book is precisely concerned with this issue. It aims at providing a theoretical framework to explore the nature of relevant organisational knowledge within and between firms, and in any other social systems. The authors stress on the fact that current knowledge management approaches are mainly Information and Communication Technology driven, focusing on the application of tools, and considering knowledge as a stand-alone resource: something that can be commercialised, stocked, manipulated and defined with clear perimeters. In this book, the authors think knowledge as a value creating process, demonstrating that the knowledge management field lacks of a founding theory focused on the nature of knowledge and knowledge flows. It is, consequently, not possible to have a credible theory about how to manage knowledge in a firm without first developing a knowledge-based-theory of the firm.The two main goals of the book can be summarized as follows: Firstly, to build up the foundations of a theory for a conceptual framework centred on knowledge flows, which the authors call the Information Space or I-Space. Secondly, to connect the I-Space framework to the actual world by exposing the managerial implications deriving from the heterogeneous institutional structures that emerge from data processing strategies.Knowledge Management; Information-Space; Networks; Actors

Experimental evidence on rational inattention

We show that rational inattention theory of Sims (2003) provides a rationalization of choice models à la Luce and gives a structural interpretation to probability curvature parameters as reflecting costs of processing information. We use data from a behavioral experiment to show that people behave according to predictions of the theory. We estimate attitudes to risk and costs of information for individual participants and document overwhelming heterogeneity in these parameters among a relatively homogeneous sample of people. We characterize, both theoretically and empirically, the aggregation biases this heterogeneity implies and find these biases to be substantial.Risk management ; Econometrics

Incorporating collateral information using an adaptive management framework for the regulation of transgenic crops:

"A lack of data often makes biological management decisions difficult and has been an area of contention in the debate over the approval of transgenic crops. Our knowledge of agricultural and natural systems is limited and our ability to gain additional information, quickly and effectively, is often handicapped by statistical complexity. To adequately cope with this requires new approaches and models that integrate decision-making and management. This paper describes one possible approach to the integration of decision-making and management, which may have application for the regulatory approval of transgenic crops. In many situations countries wishing to approve transgenic crops will have limited data on the environmental performance of the crop. The approach outlined in this paper looks at how related information, possibly collected from other countries, might be used to help inform decisions about the approval of transgenic crops. This is done within an integrated decision-making and management framework." Authors' AbstractTransgenic plants, Collateral data, Bayesian theory, Inference,