Policy Advice Derived from Simulation Models

When advising policy we face the fundamental problem that economic processes are uncertain. Consequently, policy can err. In this paper we show how the use of simulation models can reduce policy errors by inferring empirically reliable and meaningful statements about economic processes. We suggest that policy is best based on so-called abductive simulation models, which help to better understand how policy measures can influence economic processes. We show that abductive simulation models use a combination of theoretical and empirical analysis based on different data sets. By way of example we show what policy can learn with the help of abductive simulation models, namely how policy measures can influence the emergence of a regional cluster.Policy Advice, Simulation Models, Uncertainty, Methodology

Methodological Issues in Measuring Innovation Performance of Spatial Units

Measuring the innovation performance of regions or nations has been repeatedly done in the literature. What is missing in the literature is a discussion of what innovation performance of a region means. How do regions or nations contribute really to the innovation output of firms? And how can this contribution be investigated in an empirically sound way? We argue that while the literature offers many suggestions, their theoretical foundation is often weak and the under- lying assumptions are rarely discussed. In this paper, we systematize various mechanisms by which spatial units influence firms' innovation activities. On the basis of this, common innova- tion performance measures and analyses are discussed and evaluated. It is concluded that there is no general best way of measuring the innovation performance of spatial units. In fact, the most interesting insights can be obtained using a multitude of different approaches at the same time.innovation performance, regional innovativeness, innovation generation, regional innovation system, national innovation system

Regional Factors and Innovativeness - An Empirical Analysis of Four German Industries

A growing body of work emphasizes the importance of regional factors for regional innovativeness. In this paper, about seventy variables approximating the social-economic characteristics of regions are aggregated to twelve regional factors. In four industry-specific set-ups their influence on firms' innovativeness is tested. The study confirms that inter-industrial differences exist in the importance of these factors. In the empirical analyses a log-linear model is compared with a linear approach. While both are theoretically problematic it is shown that the log-linear model performs better in the empirical assessment.regional innovation performance, regional innovativeness, knowledge production function, industry comparison, German regions

Regional Path-Dependence in Start-up Activity

This paper studies the impact of an existing industrial structure in a region on the number of start-ups in this region. The aim is to detect path-dependencies in the regional industry structure. To this end we study empirically the regional factors that influence start-up rates. The approach deviates from the huge literature on start-up rates by studying each 2-digit industry separately, including the employment in other industries into the analysis and distinguishing between factors that provide founders and factors that influence their likelihood to start a firm.industrial dynamics, regional industry structure, start-ups, entrepreneurship, path-dependence

Policy Advice Derived From Simulation Models

When advising policy we face the fundamental problem that economic processes are connected with uncertainty and thus policy can err. In this paper we show how the use of simulation models can reduce policy errors. We suggest that policy is best based on so-called abductive simulation models, which help to better understand how policy measures can influence economic processes. We show that abductive simulation models use a combination of theoretical and empirical analysis based on different data sets. This helps inferring empirically reliable and meaningful statements about how policy measures influence economic processes. By way of example we show how research subsidies by the government influence the likelihood that a regional cluster emerges.Policy Advice, Simulation Models, Uncertainty, Methodology

Voice stress analysis

In a study of the validity of eight candidate voice measures (fundamental frequency, amplitude, speech rate, frequency jitter, amplitude shimmer, Psychological Stress Evaluator scores, energy distribution, and the derived measure of the above measures) for determining psychological stress, 17 males age 21 to 35 were subjected to a tracking task on a microcomputer CRT while parameters of vocal production as well as heart rate were measured. Findings confirm those of earlier studies that increases in fundamental frequency, amplitude, and speech rate are found in speakers involved in extreme levels of stress. In addition, it was found that the same changes appear to occur in a regular fashion within a more subtle level of stress that may be characteristic, for example, of routine flying situations. None of the individual speech measures performed as robustly as did heart rate

Temporal structure of firm growth and the impact of R&D

This paper examines the time structure of the effects of R&D activities on firm growth. The main questions are whether R&D activities come together with firms' growth in the subsequent periods and how this relationship depends on other characteristics of the firms, such as size and industry. In addition, we study the relationship between R&D effects and the autocorrelation dynamics of firm growth. We use firm level data of 1000 European companies with details on R&D investments in 2003 to 2006. A regression approach is applied with a linear model taking into account R&D activities at points in time and autocorrelation dynamics of firm growth. We find that R&D has, on average, a positive effect on firm growth, but the effect and its temporal structure strongly depends on firm size and industry. --Firm growth,R&D activities,firm size,industry,autocorrelation,time gap,temporal structure

Long-run factors of firm growth - a study of German firms

This paper investigates whether the economic factors that are related to firm growth in the literature also determine the development path of firms. This means that we test which economic factors possess the ability to remain effective for a longer period of time. We examine three variables: firm size, innovation effort and export share. To this end, we use panel-data on 178 German manufacturing firms over the period from 1992 to 2007. We find that the determinants of permanent growth path are not the same as the determinants of firm growth at one point in time. --firm growth,firm growth paths,firm size,export,innovation effort

On the Behavior of Proposers in Ultimatum Games

We demonstrate that one should not expect convergence of the proposals to the subgame perfect Nash equilibrium offer in standard ultimatum games. First, imposing strict experimental control of the behavior of the receiving players and focusing on the behavior of the proposers, we show experimentally that proposers do not learn to make the expected-payoff-maximizing offer. Second, considering a range of learning theories (from optimal to boundedly rational), we explain that this is an inherent feature of the learning task faced by the proposers, and we provide some insights into the actual learning behavior of the experimental subjects. This explanation for the lack of convergence to the subgame perfect Nash equilibrium in ultimatum games complements most alternative explanations.Ultimatum game, Non-equilibrium behavior, Laboratory experiment, Multi-armed bandit, Optimal learning, Gittins index, Bounded rationality

On the Behavior of Proposers in Ultimatum Games

We demonstrate that one should not expect convergence of the proposals to the subgame perfect Nash equilibrium offer in standard ultimatum games. First, imposing strict experimental control of the behavior of the receiving players and focusing on the behavior of the proposers, we show experimentally that proposers do not learn to make the expected-payoff-maximizing offer. Second, considering a range of learning theories (from optimal to boundedly rational), we explain that this is an inherent feature of the learning task faced by the proposers, and we provide some insights into the actual learning behavior of the experimental subjects. This explanation for the lack of convergence to the subgame perfect Nash equilibrium in ultimatum games complements most alternative explanations.Ultimatum game, Non-equilibrium behavior, Laboratory experiment, Multi-armed bandit, Optimal learning, Gittins index, Bounded rationality