How has Japan become a major economic power, a world leader in the automotive and electronics industries? What is the secret of their success? The consensus has been that, though the Japanese are not particularly innovative, they are exceptionally skilful at imitation, at improving products that already exist. But now two leading Japanese business experts, Ikujiro Nonaka and Hiro Takeuchi, turn this conventional wisdom on its head: Japanese firms are successful, they contend, precisely because they are innovative, because they create new knowledge and use it to produce successful products and technologies. Examining case studies drawn from such firms as Honda, Canon, Matsushita, NEC, 3M, GE, and the U.S. Marines, this book reveals how Japanese companies translate tacit to explicit knowledge and use it to produce new processes, products, and services.

The knowledge-creating company : how Japanese companies create the dynamics of innovation

The Analysis of Time Series: An Introduction, 4th edn. By C. Chatfield. ISBN 0 412 31820 2. Chapman and Hall, London, 1989. 242 pp. £13.50.

The Analysis of Time Series: An Introduction

After-sale service deployment and information sharing in a supply chain under demand uncertainty

Many macroeconomists and policymakers have debated the effectiveness of further injection of base money at zero short-term interest rates. This paper takes up the Japanese experience of the quantitative monetary-easing policy (QMEP) that was conducted in 2001—2006. In particular we measure the effect of the QMEP on aggregate output and prices, and examine its transmission mechanism, based on the vector autoregressive (VAR) methodology. To ascertain the transmission mechanism, we include several financial market variables in the VAR system. The results show that the QMEP increased aggregate output through the stock price channel. This evidence suggests that further injection of base money is effective even when short-term nominal interest rates are at zero.

An Injection of Base Money at Zero Interest Rates: Empirical Evidence from the Japanese Experience 2001-2006*

Bayesian persuasion with heterogeneous priors

Optimal spares allocation to an exchangeable-item repair system with tolerable wait

We develop a structural model to investigate the effects of asymmetric beliefs and agency conflicts on dynamic principal‐agent relationships. Optimism has a first-order effect on incentives, investments, and output, which could reconcile the private equity puzzle. Asymmetric beliefs cause optimal contracts to have features consistent with observed venture capital and research and development (RD Baker, Ruback, and Wurgler 2007; Ben-David, Graham, and Harvey 2008). Further, long-term principal‐agent relationships feature dynamic actions by both parties. For example, VC projects have salient features such as dynamic staging of the VC’s investments, progressive vesting of the entrepreneur’s stake, and the presence of intertemporal milestones or performance targets that must be met for the project to continue. Observed contracts also feature complex combinations of different types of financial securities with debt- and equity-like

https://www2.isye.gatech.edu/~shackman/GHS_RFS_PublishedVersion.pdf

Investment under Uncertainty, Heterogeneous Beliefs, and Agency Conflicts

We develop a structural model to investigate the effects of asymmetric beliefs and agency conflicts on dynamic principal-agent relationships. Our model differs from previous models by incorporating three key features in a unified framework: (i) asymmetric beliefs and risk attitudes, (ii) actions by both parties, and (iii) endogenous termination of the relationship. We show how the inter-temporal tradeoff between the benefits of agent optimism and the costs of risk-sharing affects dynamic incentive contracts. Optimism has a first-order effect on incentives, investments and output, which potentially reconciles the private equity puzzle. The effects of asymmetric beliefs lead to optimal contracts with features consistent with observed venture capital and R&D contracts. Our results also lead to potentially testable implications for the effects of project characteristics on contractual features. To obtain quantitative guidance on the effects of asymmetric beliefs, we calibrate our structural model to data on pharmaceutical R&D projects. The analysis of the calibrated model shows that optimism significantly influences project values, and that permanent and transitory components of risk have opposing effects on project values and durations.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1105404_code297684.pdf?abstractid=1105404

Investment Under Uncertainty, Heterogeneous Beliefs and Agency Conflicts

We develop a multi-period dynamic model in which managers decide in each period how much to invest in improving process reliability. The optimal investment decision will minimize the firm’s total costs, which are comprised of its preventive costs and failure costs. We explicitly characterize the optimal investment scheme under different output growth projections and where the firm considers project obsolescence and investment salvageability. Our findings include: for sufficiently small output growth, investment will be made upfront; for sufficiently large output growth, investment will be made periodically until project termination; and for intermediate growth, investment will be staged until some period after which there will be no more investment. The general nature of the cost function in this model allows for its application in various cost reduction settings.

/pdf/the-effects-of-output-growth-on-preventive-investment-policy-48o67oztmz.pdf

The Effects of Output Growth on Preventive Investment Policy

Many successful land-bridge projects have been constructed around the world. This fact has led the Israeli government to design a land bridge from Eilat port on the Red Sea coast to the Ashdod Port on the Mediterranean Sea coast. The planned project is expected to realise many benefits and profits. These are grouped into two groups. The first group comprises considerations associated with freight shipment: consolidation, specialisation, and the economic analysis and viability with respect to freight shipment and transshipment. The second group is the social and economic benefits of this project to Israel with respect to connecting the southern periphery with the centre of Israel.

/pdf/red-sea-and-mediterranean-sea-land-bridge-via-eilat-3si3wluptb.pdf

Yahel Giat

Papers

Optimal spares allocation to an exchangeable-item repair system with tolerable wait

Investment under Uncertainty, Heterogeneous Beliefs, and Agency Conflicts

Investment Under Uncertainty, Heterogeneous Beliefs and Agency Conflicts

The Effects of Output Growth on Preventive Investment Policy

Red Sea and Mediterranean Sea land bridge via Eilat