8,151 research outputs found
Distance-based kernels for real-valued data
We consider distance-based similarity measures for real-valued vectors of interest in kernel-based machine learning algorithms. In particular, a truncated Euclidean similarity measure and a self-normalized similarity measure related to the Canberra distance. It is proved that they are positive semi-definite (p.s.d.), thus facilitating their use in kernel-based methods, like the Support Vector Machine, a very popular machine learning tool. These kernels may be better suited than standard kernels (like the RBF) in certain situations, that are described in the paper. Some rather general results concerning positivity properties are presented in detail as well as some interesting ways of proving the p.s.d. property.Peer ReviewedPostprint (author's final draft
Completing contracts ex post: How car manufacturers manage car dealers
This article illustrates how contracts are completed ex post in practice and, in so doing, indirectly suggests what the real function of contracts may be. Our evidence comes from the contracts between automobile manufacturers and their dealers in 23 dealership networks in Spain. Franchising dominates automobile distribution because of the need to decentralize pricing and control of service decisions. It motivates local managers to undertake these activities at minimum cost for the manufacturer. However, it creates incentive conflicts, both between manufacturers and dealers and among dealers themselves, concerning the level of sales and service provided. It also holds potential for expropriation of specific investments. Contracts deal with these conflicts by restricting dealersâ decision rights and granting manufacturers extensive completion, monitoring and enforcement powers. The main mechanism that may prevent abuse of these powers is the manufacturersâ reputational capital.Franchising, incomplete contracts, self-enforcement, automobile
Contractual allocation of decision rights and incentives: The case of automobile distribution
We analyze empirically the allocation of rights and monetary incentives in automobile franchise contracts. These contracts substantially restrict the decision rights of dealers and grant manufacturers extensive contractual completion and enforcement powers, converting the manufacturers, de facto, in a sort of quasi-judiciary instance. Variation in the allocation of decision rights and incentive intensity is explained by the incidence of moral hazard in the relation. In particular, when the cost of dealer moral hazard is higher and the risk of manufacturer opportunism is lower, manufacturers enjoy more discretion in determining the performance required from their dealers and in using mechanisms such as monitoring, termination and monetary incentives to ensure such performance is provided. We also explore the existence of interdependencies between the different elements of the system. and find some complementarities between completion and termination rights, and between monitoring rights and the intensity of incentives.Franchising, contracts, self-enforcement, incentives, complementarities, automobiles
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