http://repub.eur.nl/res/concept/jel-O3/ Recent publications classified by JEL Code O3 en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/40138/ 2013-05-22T00:00:00Z This is the specification for the Power Trading Agent Competition for 2013 (Power TAC 2013). Power TAC is a competitive simulation that models a “liberalized” retail electrical energy market, where competing business entities or “brokers” offer energy services to customers through tariff contracts, and must then serve those customers by trading in a wholesale market. Brokers are challenged to maximize their profits by buying and selling energy in the wholesale and retail markets, subject to fixed costs and constraints. Costs include fees for publication and withdrawal of tariffs, and distribution fees for transporting energy to their contracted customers. Costs are also incurred whenever there is an imbalance between a broker’s total contracted energy supply and demand within a given time slot. The simulation environment models a wholesale market, a regulated distribution utility, and a population of energy customers, situated in a real location on Earth during a specific period for which weather data is available. The wholesale market is a relatively simple call market, similar to many existing wholesale electric power markets, such as Nord Pool in Scandinavia or FERC markets in North America, but unlike the FERC markets we are modeling a single region, and therefore we do not model location-marginal pricing. Customer models include households and a variety of commercial and industrial entities, many of which have production capacity (such as solar panels or wind turbines) as well as electric vehicles. All have “real-time” metering to support allocation of their hourly supply and demand to their subscribed brokers, and all are approximate utility maximizers with respect to tariff selection, although the factors making up their utility functions may include aversion to change and complexity that can retard uptake of marginally better tariff offers. The distribution utility models the regulated natural monopoly that owns the regional distribution network, and is responsible for maintenance of its infrastructure and for real-time balancing of supply and demand. The balancing process is a market-based mechanism that uses economic incentives to encourage brokers to achieve balance within their portfolios of tariff subscribers and wholesale market positions, in the face of stochastic customer behaviors and weather-dependent renewable energy sources. The broker with the highest bank balance at the end of the simulation wins. Ketter, W. Collins, J. Reddy, P. Weerdt, M.M. de http://repub.eur.nl/res/pub/40144/ 2013-05-22T00:00:00Z Information systems have revolutionized the provisioning of decision-relevant information, and decision support tools have improved human decisions in many domains. Autonomous decision- making, on the other hand, remains hampered by systems’ inability to faithfully capture human preferences. We present a computational preference model that learns unobtrusively from lim- ited data by pooling observations across like-minded users. Our model quantifies the certainty of its own predictions as input to autonomous decision-making tasks, and it infers probabilistic segments based on user choices in the process. We evaluate our model on real-world preference data collected on a commercial crowdsourcing platform, and we find that it outperforms both individual and population-level estimates in terms of predictive accuracy and the informative- ness of its certainty estimates. Our work takes an important step toward systems that act autonomously on their users’ behalf. Peters, M. Ketter, W. http://repub.eur.nl/res/pub/39515/ 2013-04-09T00:00:00Z We analyze the initial intellectual property (IP) right of 4,703 start-up entrants in the US, distinguishing between trademark and patent applications. The results show that start-ups are more likely to file for a trademark instead of a patent when entering into more competitive market structures. Further, we find that start-ups with a focus on distribution that serves end-consumers are more likely to file for a trademark and that start-ups that operate upstream and sell to other businesses are more likely to file for a patent. Lastly, the external influences on a start-up‟s management, such as the involvement of a venture capitalist (VC), affect IP applications. The increased incentive of VC-backed start-ups to become operational on the market makes them more likely to file initial IP in the form of a trademark rather than a patent. Among other factors, we control for R&D and advertising intensity in the industry and distinguish between more technical and more service-driven industries. De Vries, G.A. Pennings, H.P.G. Block, J.H. http://repub.eur.nl/res/pub/38149/ 2012-12-21T00:00:00Z In order to promote the generation of market breakthroughs and disruptive innovation, organizations increasingly promote grassroots innovation, i.e. the emergence of innovative ideas from their whole employee base. Despite this surge in interest in grassroots innovation, there is a lack of guidance on how organizations should design and implement grassroots innovation programs. A key challenge faced by organizations promoting grassroots innovation is how to motivate the right employees to submit their best ideas and persist in their quest to transform such ideas in successful new businesses. In this paper, we draw on self-determination theory (SDT) to propose a conceptual framework that organizations can use to design effective grassroots innovation programs. We offer an in-depth understanding of how top-management support and the mechanisms behind grassroots innovation programs (e.g., idea sourcing, team formation, team/idea selection and training/coaching) influence employees’ motivation to submit their best ideas and, consequently, the success of grassroots innovation programs. We argue, in line with SDT, that successful grassroots innovation programs need to promote employees’ intrinsic motivation for innovation by satisfying three innate human needs: competence, autonomy and relatedness. Through an in-depth case study (the Innospire program at Merck), we provide evidence that support our propositions and discuss how organizations can successfully implement the proposed framework. Betz, U.A.K. Camacho, N.M.A. Gerards, M. Stremersch, S. http://repub.eur.nl/res/pub/38197/ 2012-10-24T00:00:00Z This paper develops a general-equilibrium model of skill-biased technological change that approximates the observed shifts in the shares of wage and non-wage income going to the top decile of U.S. households since 1980. Under realistic assumptions, we find that all agents can benefit from the technology change, provided that the observed rise in redistributive transfers over this period is taken into account. We show that the increase in capital’s share of total income and the presence of capital-entrepreneurial skill complementarity are two key features that help support the wages of ordinary workers as the new technology diffuses Lansing, K.J. Markiewicz, A. http://repub.eur.nl/res/pub/37192/ 2012-09-10T00:00:00Z This is the specification for the Power Trading Agent Competition for 2012 (Power TAC 2012). Power TAC is a competitive simulation that models a “liberalized” retail electrical energy market, where competing business entities or “brokers” offer energy services to customers through tariff contracts, and must then serve those customers by trading in a wholesale market. Brokers are challenged to maximize their profits by buying and selling energy in the wholesale and retail markets, subject to fixed costs and constraints. Costs include fees for publication and withdrawal of tariffs, and distribution fees for transporting energy to their contracted customers. Costs are also incurred whenever there is an imbalance between a broker’s total contracted energy supply and demand within a given time slot. The simulation environment models a wholesale market, a regulated distribution utility, and a population of energy customers, situated in a real location on Earth during a specific period for which weather data is available. The wholesale market is a relatively simple call market, similar to many existing wholesale electric power markets, such as Nord Pool in Scandinavia or FERC markets in North America, but unlike the FERC markets we are modeling a single region, and therefore we do not model location-marginal pricing. Customer models include households and a variety of commercial and industrial entities, many of which have production capacity (such as solar panels or wind turbines) as well as electric vehicles. All have “real-time” metering to support allocation of their hourly supply and demand to their subscribed brokers, and all are approximate utility maximizers with respect to tariff selection, although the factors making up their utility functions may include aversion to change and complexity that can retard uptake of marginally better tariff offers. The distribution utility models the regulated natural monopoly that owns the regional distribution network, and is responsible for maintenance of its infrastructure and for real-time balancing of supply and demand. The balancing process is a market-based mechanism that uses economic incentives to encourage brokers to achieve balance within their portfolios of tariff subscribers and wholesale market positions, in the face of stochastic customer behaviors and weather-dependent renewable energy sources. The broker with the highest bank balance at the end of the simulation wins. Ketter, W. Collins, J. Reddy, P. Weerdt, M.M. de http://repub.eur.nl/res/pub/37701/ 2012-04-01T00:00:00Z Using matched firm-worker data from Danish manufacturing, we observe firm-to-firm worker movements and find that firms that hired workers from more productive firms experience productivity gains one year after the hiring. The productivity gains associated with hiring from more productive firms are equivalent to 0.35 percent per year for an average firm. Surviving a variety of statistical controls, these gains increase with education, tenure, and skill level of new hires, persist for several years after the hiring was done, and remain broadly similar for different industries and measures of productivity. Competing explanations for these gains, knowledge spillovers in particular, are discussed. Stoyanov, A. Zubanov, N.V. http://repub.eur.nl/res/pub/38205/ 2012-02-21T00:00:00Z The knowledge spillover theory of entrepreneurship seeks to explain the fundamentals and consequences of entrepreneurship with respect to economic performance. This paper uses the knowledge spillover theory to explain different innovation outcomes. We hypothesize that a high rate of entrepreneurship facilitates the process of turning knowledge into new-to-the-market innovation but has no effect on the relationship between knowledge and new-to-the-firm innovation. Our results using European country-level and pooled OLS, fixed- and random-effects regressions show that a high rate of entrepreneurship increases the chances that knowledge will become new-to-the-market innovation. The findings highlight the importance of Schumpeterian entrepreneurship in the process of the commercialization of knowledge. We discuss the implications for entrepreneurship and innovation policy. Block, J.H. Thurik, A.R. Zhou, H. http://repub.eur.nl/res/pub/31775/ 2012-02-07T00:00:00Z We formulate a simple model of optimal defensive disclosure by a monopolist facing uncertain antitrust enforcement and test its implications using unique data on defensive disclosures and patents by IBM during 1955-1989. Our results indicate that stronger antitrust enforcement leads to more defensive disclosure, that quality inventions are disclosed defensively, and that defensive disclosure served as an alternative but less successful mechanism to patenting at IBM in appropriating returns from R&D. Bhaskarabhatla, A. Pennings, H.P.G. http://repub.eur.nl/res/pub/32154/ 2011-09-01T00:00:00Z Dual distribution in franchising is addressed from an incomplete contracting perspective. We explicitly model cooperative (dual distribution) franchising as an organizational form, next to wholly-owned, wholly-franchised, and dual distribution franchise systems. Key conclusions of the model are: (1) dual distribution as an efficient governance mechanism does not depend on heterogeneous downstream outlets, and (2) whether dual distribution or some other organizational form is efficient depends on the size of the benefits to dual distribution relative to the parties' costs of investing. Hendrikse, G.W.J. Jiang, T. http://repub.eur.nl/res/pub/23550/ 2011-06-21T00:00:00Z A growing number of firms rely on strategic R&D alliances to develop new products. In these alliances, firms use various kinds of governance mechanisms for incentive alignment. Project-level governance, i.e., the daily control of alliance activities by firms’ alliance representatives such as steering committee members, alliance managers, and project managers; and, performance-based monetary incentives, i.e., the potential milestone payments tied to the performance of partners, are two governance mechanisms, increasingly used in practice, yet overlooked in the strategic alliances literature. In this dissertation, I examine the antecedents and performance outcomes of these two governance mechanisms in the biopharmaceutical industry setting. The results of this dissertation suggest that project-level governance and monetary incentives offset each others’ effects on alliance innovation performance in the context of startup-incumbent alliances. In other words, offering greater monetary incentives to startups has minimal positive effect on development success, if incumbents opt for intense project-level governance by their controllers at the same time. On the other hand, the results suggest that greater monetary incentives result in higher abnormal stock returns to startup firms following alliance announcements. The results also reveal the positive reciprocal relationship between project-level governance and monetary incentives. The greater the project-level governance, the higher the size of potential milestone-payments, and vice versa. Hence, the incumbents that exercise intense governance on startups in alliances offer also higher potential milestone payments to compensate for the performance risks of startups. The results also show that project-level governance positively influences the contractual detail, which in turn increases the likelihood of development success. Finally, the results reveal several other exogenous and endogenous antecedents of both governance mechanisms. Ozdemir, M.N. http://repub.eur.nl/res/pub/23492/ 2011-05-30T00:00:00Z This paper proposes a risk assessment framework as a research road-map, with the aim of developing a protocol that integrates the risk management requirements from the perspectives of the business and the government. We take the viewpoint of value modeling and interpret the risk management problem as a control problem. Four steps of risk assessment are identified in the framework, forming the risk management cycle. Liu, L. Daniels, H.A.M. http://repub.eur.nl/res/pub/23422/ 2011-05-26T00:00:00Z This thesis deals with the entrepreneurial process from an international perspective. The first part explores which people decide to enter entrepreneurship. A distinction is made between two modes of entrepreneurial entry: taking over an existing firm and starting a new firm. The second part focuses on the exit side and examines the determinants of exit before and exit after business start-up. In addition, the decision to re-enter entrepreneurship after having experienced an entrepreneurial exit is analyzed in this second part. This thesis is of particular interest to policymakers, partly due to its dynamic approach. That is, this thesis distinguishes between several stages that make up the decision to become an entrepreneur. The stages range from no entrepreneurial activity to intentional, nascent, young, and established entrepreneurship (the “entrepreneurial ladder”). The conclusions of this thesis may help governments to intervene at positions on the entrepreneurial ladder where certain characteristics, such as perceptions about the entrepreneurial environment, hinder entrepreneurial progress or where regions lag behind. We find that people with pessimistic views about the administrative start-up environment are discouraged in having intentions or undertaking attempts to set up their own businesses (particularly in Europe). Policies should be aimed at tackling inflated perceptions of administrative barriers (in case of misperceptions of the environment) or directly lowering these barriers. Exit before start-up and exit after business start-up have different determinants. For example, urbanization is negatively related to exit before start-up and positively related to exit after start-up. This finding points at the presence of overoptimistic entrepreneurs and strong selection mechanisms in these areas. Furthermore, individuals are inclined to enter the entrepreneurial process again after having experienced an exit. This finding holds true for positive as well as negative exit experiences. Zwan, P.W. van der http://repub.eur.nl/res/pub/23339/ 2011-05-16T00:00:00Z Many enterprises that participate in dynamic markets need to make product pricing and inventory resource utilization decisions in real-time. We describe a family of statistical models that address these needs by combining characterization of the economic environment with the ability to predict future economic conditions to make tactical (short-term) decisions, such as product pricing, and strategic (long-term) decisions, such as level of finished goods inventories. Our models characterize economic conditions, called economic regimes, in the form of recurrent statistical patterns that have clear qualitative interpretations. We show how these models can be used to predict prices, price trends, and the probability of receiving a customer order at a given price. These “regime” models are developed using statistical analysis of historical data, and are used in real-time to characterize observed market conditions and predict the evolution of market conditions over multiple time scales. We evaluate our models using a testbed derived from the Trading Agent Competition for Supply Chain Management (TAC SCM), a supply chain environment characterized by competitive procurement and sales markets, and dynamic pricing. We show how regime models can be used to inform both short-term pricing decisions and longterm resource allocation decisions. Results show that our method outperforms more traditional shortand long-term predictive modeling approaches. Ketter, W. Collins, J. Gini, M. Gupta, A. Schrater, P. http://repub.eur.nl/res/pub/23263/ 2011-05-10T00:00:00Z This is the specification for the Power Trading Agent Competition for 2011 (Power TAC 2011). Agents are simulations of electrical power brokers, who must compete with each other for both power production and consumption, and manage their portfolios. Ketter, W. Collins, J. Reddy, P. Flath, C. http://repub.eur.nl/res/pub/22815/ 2011-03-24T00:00:00Z Fruit and vegetable marketing organization The Greenery has experienced various governance structure changes, like horizontal merger, forward integration, and the emergence of grower associations. A multilateral incomplete contracting model is presented to account for these changes by analysing the interactions between pooling, access, and countervailing power. This model does not only explain the changes at The Greenery, but it contributes also to the design of efficient channel governance. Hendrikse, G.W.J. http://repub.eur.nl/res/pub/22812/ 2011-03-19T00:00:00Z This paper explores how standardization education can be implemented at the national level. Previous studies form the main source for the paper. This research shows that implementation of standardization in the national education system requires policy at the national level, a long term investment in support, and cooperation between industry, standardization bodies, academia, other institutions involved in education, and government. The approach should combine bottom-up and top-down. The paper is new in combining previous findings to an underpinned recommendation on how to implement standardization education. Vries, H.J. de http://repub.eur.nl/res/pub/22723/ 2011-03-02T00:00:00Z In this paper we present and analyze a model for clustering in networks that offer Software as a Service (SaaS). In this problem, organizations requesting a set of applications have to be assigned to clusters such that the costs of opening clusters and installing the necessary applications in clusters are minimized. We prove that this problem is NP-hard, and model it as an Integer Program with symmetry breaking constraints. We then propose a Tabu search heuristic for situations where good solutions are desired in a short computation time. Extensive computational experiments are conducted for evaluating the quality of the solutions obtained by the IP model and the Tabu Search heuristic. Experimental results indicate that the proposed Tabu Search is promising. Gaast, J.P. van der Rietveld, C.A. Gabor, A.F. Zhang, Y. http://repub.eur.nl/res/pub/20586/ 2011-03-01T00:00:00Z We show the effects of the unionization structure (viz., decentralized and centralized unions) on a firm's incentive for technology licensing and innovation. The incentive for technology licensing is stronger under decentralized unions. We identify circumstances under which the benefit from licensing creates a stronger incentive for innovation under decentralized unions. If the union's preference for employment is high, the benefit from licensing may create higher incentive for innovation under decentralized unions. However, if the union's preference for wage is high enough, the incentive for innovation is higher under a centralized union irrespective of licensing ex-post innovation. If the centralized union decides whether or not to supply workers to all firms, the possibility of higher innovation under decentralized unions increases. We further show that perfectly substitutable workers can be better off under decentralized unions if the labor productivity depends on the unionization structure, which occurs in our analysis when, e.g., licensing after innovation occurs only under decentralized unions or innovation (with no licensing) occurs only under a centralized union. Mukherjee, A. Pennings, H.P.G. http://repub.eur.nl/res/pub/22550/ 2011-02-07T00:00:00Z We present a theoretical framework which allows for the comparison of the effectiveness of tax measures, loans and funding, in supporting industry-oriented research. We estimate for each of the instruments the exact contribution required by a firm to decide on investing in R&D, given the costs and probability of success of the project, and the foreseen change in profit following successful implementation of the research results. We apply Prospect Theory to analyse the risk attitude of the firm. By comparing the contribution required, we identify the instrument which is most effective, and therefore preferred by a government. Our analysis indicates that there exists a critical value for the probability of success of the project for which the modality of the most effective instruments changes. For a probability of success smaller than the critical value, a tax measures offering support only in case of successful completion of the project is preferred. For a probability higher than the critical value, a loan is most effective. The value of the critical probability depends on the perception of risk and loss aversion of the firm involved in the research. Heide, M.J.L. de Kothiyal, A.