Online Exploration of Polygons with Holes

We study online strategies for autonomous mobile robots with vision to explore unknown polygons with at most h holes. Our main contribution is an (h+c_0)!-competitive strategy for such polygons under the assumption that each hole is marked with a special color, where c_0 is a universal constant. The strategy is based on a new hybrid approach. Furthermore, we give a new lower bound construction for small h.Comment: 16 pages, 9 figures, submitted to WAOA 201

Determinants of Insurers’ Performance in Risk Pooling, Risk Management, and Financial Intermediation Activities

Corporate finance theory predicts that firms’ characteristics affect agency costs and hence their efficiency. Cummins et al (2006) have proposed a cost function specification that measures separately insurer efficiency in handling risk pooling, risk management, and financial intermediation functions. We investigate the insurer characteristics that determine these efficiencies. Our empirical results show that mutuals outperform stock insurers in handling the three functions. Independent agents and high capitalization reduce the cost efficiency of risk pooling. Certain characteristics such as being a group of affiliated insurers, handling a higher volume of business in commercial lines, assuming more reinsurance, or investing a higher proportion of assets in bonds, do significantly increase insurers’ efficiency in risk management and financial intermediation.Risk pooling, risk management, financial intermediation, property-liability insurance, efficiency, agency costs.

Determinants of Insurers' Performance in Risk Pooling, Risk Management, and Financial Intermediation Activities

Corporate finance theory predicts that firms' characteristics affect agency costs and hence their efficiency. Cummins et al. (2006) have proposed a cost function specification that measures separately insurer efficiency in handling risk pooling, risk management, and financial intermediation functions. We investigate the insurer characteristics that determine these efficiencies. Our empirical results show that mutuals outperform stock insurers in handling the three functions. Independent agents and high capitalization reduce the cost efficiency of risk pooling. Certain characteristics such as being a group of affiliated insurers, handling a higher volume of business in commercial lines, assuming more reinsurance or investing a higher proporotion of assets in bonds, do significantly increase insurers' efficiency in risk management and financial intermediation.Risk pooling, risk management, financial intermediation, property-liability insurance, efficiency, agency costs

Efficiency of Insurance Firms with Endogenous Risk Management and Financial Intermediation Activities

Risk management is now present in many economic sectors. This paper investigates the role of risk management in creating value for financial institutions by analyzing U.S. property-liability insurers. Property-liability insurers are financial intermediaries whose primary roles in the economy are risk pooling and risk bearing. The risk pooling and risk bearing functions performed by insurers are the primary determinants of the need for risk management. The main goal of this paper is to test how risk management and financial intermediation activities create value for insurers by enhancing economic efficiency. Insurer cost efficiency is measured relative to an econometric cost function. Since the prices of risk management and financial intermediation services are not observable, we consider these two activities as intermediate outputs and estimate their shadow prices. The shadow prices isolate the contributions of risk management and financial intermediation to insurer cost efficiency. The econometric results show that both activities significantly increase the efficiency of the property-liability insurance industry.Risk management, US property-liability insurer, risk pooling, financial intermediation, economic efficiency, intermediate output, shadow price, cost function, translog approximation

The Costs and Benefits of Reinsurance

Purchasing reinsurance reduces insurers’ insolvency risk by stabilizing loss experience, increasing capacity, limiting liability on specific risks, and/or protecting against catastrophes. Consequently, reinsurance purchase should reduce capital costs. However, transferring risk to reinsurers is expensive. The cost of reinsurance for an insurer can be much larger than the actuarial price of the risk transferred. In this article, we analyze empirically the costs and the benefits of reinsurance for a sample of U.S. property-liability insurers. The results show that reinsurance purchase increases significantly the insurers’ costs but reduces significantly the volatility of the loss ratio. With purchasing reinsurance, insurers accept to pay higher costs of insurance production to reduce their underwriting risk.reinsurance, insolvency risk, risk management, financial intermediation, cost functions, panel data.

Qu’en est-il des rendements d’échelle dans les industries québécoises et ontariennes de transport par camion?

Les discussions concernant les effets de la déréglementation récente de l’industrie québécoise du transport par camion sont loin de faire l’unanimité. Certains maintiennent qu’une déréglementation amènera une plus grande concentration de l’industrie étant donné qu’il y a des économies d’échelle potentielles alors que les tenants de la déréglementation soutiennent que l’industrie est caractérisée par des rendements constants. Dans cet article, nous présentons une étude économétrique des fonctions de coûts des entreprises québécoises et ontariennes de transport par camion. Bien qu’il soit difficile d’obtenir des résultats globaux à cause du caractère non-homothétique de la technologie, nos résultats préliminaires indiquent que les firmes de grande taille opèrent à rendements constants. La concurrence coupe-gorge anticipée par certains pourrait ne pas avoir lieu puisque les grandes entreprises n’ont pas avantage (en terme de coûts) à se livrer à ce type de concurrence. Par contre, nos résultats montrent que les grandes firmes ont des coûts moyens inférieurs à ceux de la firme moyenne, ce qui devrait entraîner des ajustements de court terme, dont une diminution des tarifs.Discussions on the effects of the recent deregulation of Québec trucking industry are not unanimous. Some argue that deregulation will reduce competition because there are potential scale economies while others argue that the industry is characterized by constant returns to scale. In this paper we present an econometric analysis of cost functions of trucking firms in Québec and Ontario. Although it is difficult to obtain general conclusions since the technology is non-homothetic, our preliminary results show that large firms produce at constant returns to scale. The anticipated cut-throat competition might not happen since large firms have nothing to gain (in term of costs) from this type of competition. However, our results show that large firms have lower average costs than the average firm, which should introduce short term adjustments in the industry such as a reduction in trucking rates

Rendements d’échelle, progrès technique et croissance de la productivité dans les industries québécoise et ontarienne de transport par camion, 1981-1988

Dans la première partie de l’article, nous mettons à jour les résultats de Gagné et Dionne (1988). Nous montrons que les industries québécoise et ontarienne de transport par camion avaient une structure de coûts durant la période 1981-1988 qui pouvait permettre la libre concurrence à long terme; ce qui justifie la déréglementation de l’industrie. Les résultats indiquent également que les petites entreprises avaient des coûts moyens supérieurs aux grandes entreprises et que les coûts moyens des entreprises de l’Ontario étaient supérieurs à ceux des entreprises du Québec. Dans la deuxième partie de l’article, nous montrons que la croissance de la productivité a été négative pour la période d’analyse au Québec et plutôt nulle en Ontario, une tendance aussi observée aux États-Unis par R.J. Gordon (1991).In the first part of the article we present an update of Gagné and Dionne (1988) results. We show that trucking industries in Quebec and Ontario had a cost structure, during the period 1981-1988, that corresponds to a competitive industry; this justifies the recent deregulation moves. The results also show that small firms had higher costs than large firms and that firms in Ontario had higher costs than those in Quebec. In the second part of the article, we obtain that productivity growth declined sharply during the same period in Quebec and was on average constant in Ontario, results that are similar to those obtained by R.J. Gordon (1991) for the US trucking industry