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Author: James Owen Ostler Publisher: ISBN: Category : Languages : en Pages : 106
Book Description
This thesis explores how competition impacts risk taking in three essays. Chapter 2 explores the role competition plays in motivating risk-taking in en entrepreneurial setting. Traditional entrepreneurship research holds that a role of entrepreneurs is to bear risk and that entrepreneurs are risk seeking, or at least less risk averse than others. Using a tournament model we show that, due to competitive effects, even risk-neutral entrepreneurs appear to be risk seeking and will take on significant levels of risk. To explain this we introduce the concept of strategic risk, which we define as rational risk taking that arises due to competition. We show that the traditional view may have it backwards: we do not observe risky behavior because entrepreneurs have a taste for risk, but rather the structure of some markets induces rational strategic risk taking, and it is the presence of risk and uncertainty that allows entrepreneurship to exist. The model predicts that industries with higher uncertainty and riskier strategies available to entrepreneurs will have higher levels of entrepreneurial entry. Thus, we offer an alternative explanation to why radical innovations disproportionately come from small entrepreneurial firms, and why certain industries are more innovative than others. Chapter 3 tests the empirical predictions of Chapter 2 in the liver transplant market. Using a policy change to identify risky illegal behavior in the liver transplant market we find support for the model's predictions. The liver transplant market offers an ideal setting to look at how competition impacts risk taking and firm entry as it offers a setting with: substantial variation in levels of market competition, a change in policy that allows identification of risk taking in the form of illegal activity (Snyder, 2010), and a growing market with entry occurring over time. We find support for the predictions that: increased competition increases strategic risk taking, new entrants will take more strategic risk, and that the presence of risky strategies increases an entrepreneurial entrant's ability to compete leading to increased entry. Finally, in Chapter 4 the risk taking behavior predicted in Chapter 2 is tested in a laboratory experiment. We find that actual behavior deviates from the theoretical optimal for the majority of players even though players would universally be better off playing as the model prescribes. We also explore how the framing of the competitive situation influences behavior. We find that general quantitative ability and being less risk averse predicts play closer to the optimal predicted behavior.
Author: James Owen Ostler Publisher: ISBN: Category : Languages : en Pages : 106
Book Description
This thesis explores how competition impacts risk taking in three essays. Chapter 2 explores the role competition plays in motivating risk-taking in en entrepreneurial setting. Traditional entrepreneurship research holds that a role of entrepreneurs is to bear risk and that entrepreneurs are risk seeking, or at least less risk averse than others. Using a tournament model we show that, due to competitive effects, even risk-neutral entrepreneurs appear to be risk seeking and will take on significant levels of risk. To explain this we introduce the concept of strategic risk, which we define as rational risk taking that arises due to competition. We show that the traditional view may have it backwards: we do not observe risky behavior because entrepreneurs have a taste for risk, but rather the structure of some markets induces rational strategic risk taking, and it is the presence of risk and uncertainty that allows entrepreneurship to exist. The model predicts that industries with higher uncertainty and riskier strategies available to entrepreneurs will have higher levels of entrepreneurial entry. Thus, we offer an alternative explanation to why radical innovations disproportionately come from small entrepreneurial firms, and why certain industries are more innovative than others. Chapter 3 tests the empirical predictions of Chapter 2 in the liver transplant market. Using a policy change to identify risky illegal behavior in the liver transplant market we find support for the model's predictions. The liver transplant market offers an ideal setting to look at how competition impacts risk taking and firm entry as it offers a setting with: substantial variation in levels of market competition, a change in policy that allows identification of risk taking in the form of illegal activity (Snyder, 2010), and a growing market with entry occurring over time. We find support for the predictions that: increased competition increases strategic risk taking, new entrants will take more strategic risk, and that the presence of risky strategies increases an entrepreneurial entrant's ability to compete leading to increased entry. Finally, in Chapter 4 the risk taking behavior predicted in Chapter 2 is tested in a laboratory experiment. We find that actual behavior deviates from the theoretical optimal for the majority of players even though players would universally be better off playing as the model prescribes. We also explore how the framing of the competitive situation influences behavior. We find that general quantitative ability and being less risk averse predicts play closer to the optimal predicted behavior.
Author: Aswath Damodaran Publisher: Pearson Prentice Hall ISBN: 0131990489 Category : Business & Economics Languages : en Pages : 409
Book Description
Groundbreaking book that redefines risk in business as potentially powerful strategically to help increase profits. bull; Get out of your "defensive crouch ": learn which risks to avoid, which to mitigate, and which to actively exploit. bull; Master risk management techniques that can drive competitive advantage, increase firm value, and enhance growth and profitability. bull; By Dr. Aswath Damodaran, one of the field's top "gurus " - known worldwide for his classic guides to corporate finance and valuation.
Author: Daniel Kern Publisher: Springer Science & Business Media ISBN: 3834962279 Category : Business & Economics Languages : en Pages : 150
Book Description
Daniel Kern provides an answer on how to implement the theoretical concepts into day-to-day business of multinational corporations through the empirical validation of SCM models and in-depth casestudies. The four essays cover research on inter-firm collaboration, supply risk management, purchasing competences and research on measuring and benchmarking SCM efforts.
Author: Jiyeon Yun Publisher: ISBN: Category : Languages : en Pages : 152
Book Description
In my dissertation, I examine corporate risk management behavior of U.S. insurers. In my first essay, I investigate the effects of executive compensation on corporate risk management. Because risk averse managers may underinvest and reduce risk beyond what is optimal for investors, I examine whether firms can encourage managerial risk taking through compensation that leads managers to hedge less. Our unique dataset allows us to build the comprehensive and clean measure of corporate hedging behavior. Utilizing the implementation of FAS 123R, paper finds that CEO compensation has a causal effect on their firms' overall hedging. In addition, paper provides strong evidence that CEO compensation has a causal effect on firms' insurance demand but only weak evidence on derivative usage. In my second essay, I investigate whether Enterprise Risk Management (ERM) creates value by allowing firms to take more strategic business risk and greater advantage of opportunities in their core business. Firms that engage in ERM should be able to better understand the aggregate risk inherent in different business activities. With an increased understanding in a firm's risk profile, ERM adopting firms should take a more strategic approach to risk management and expand risk-taking in areas where they do have a comparative advantage. We find that ERM adopting firms are increasing its share of core risk. We also find that life insurers have significantly higher share of core risk. ERM firms are increasing its share of core risk not through the risk substitution with non-core risk but by increasing its non-core risk. This provides evidence that ERM firms are recognizing interactions among sources of risks and the benefits of natural hedges.
Author: Mr.Gianni De Nicolo Publisher: International Monetary Fund ISBN: 1451853815 Category : Business & Economics Languages : en Pages : 25
Book Description
This study reinvestigates the theoretical relationship between competition in banking and banks' exposure to risk of failure. There is a large existing literature that concludes that when banks are confronted with increased competition, they rationally choose more risky portfolios. We briefly review this literature and argue that it has had a significant influence on regulators and central bankers, causing them to take a less favorable view of competition and encouraging anti-competitive consolidation as a response to banking instability. We then show that existing theoretical analyses of this topic are fragile, since they do not detect two fundamental risk-incentive mechanisms that operate in exactly the opposite direction, causing banks to aquire more risk per portfolios as their markets become more concentrated. We argue that these mechanisms should be essential ingredients of models of bank competition.
Author: David Wm. Finnie Publisher: John Wiley & Sons ISBN: 1119794226 Category : Business & Economics Languages : en Pages : 224
Book Description
Discover the interplay between strategy and risk in this insightful new resource from two experts in the financial industry who have applied their knowledge to multiple industries In The Two Headed Coin, accomplished authors James L. Darroch and David Wm. Finnie deliver an insightful exploration of the interplay between strategy and risk that underlies the operational framework of successful organizations. You’ll learn which risks are fundamental to the strategic positioning and goals of your organization and which are not. You’ll also discover the importance of an independent risk function, e,g., the CRO, and its invaluable role as part of the strategic process. You’ll also find: A thorough discussion of the notion of competitive advantage and how it relates to risk An exploration of consumer perception and reputation as an asset to be managed How to use scenario planning and real options to provide a framework for managing uncertainty How a focus on culture and ethics can minimize the risk of large losses due to adverse behaviors Perfect for risk management and strategy professionals The Two Headed Coin will also earn a place in the libraries of executives and managers who wish to improve their ability to integrate strategic and risk thinking to create competitive advantage.
Author: Mónica López-Puertas Lamy Publisher: Ed. Universidad de Cantabria ISBN: 8486116813 Category : Languages : en Pages : 32
Book Description
El principal objetivo de este trabajo consiste en analizar los efectos que la estructura de propiedad bancaria tiene sobre la toma de riesgos, a nivel microeconómico y sobre el riesgo sistémico, a nivel macroeconómico. Para ello se desarrolla un modelo de competencia oligopolística y se analizan las propiedades del equilibrio de mercado en términos de beneficios, cuota de mercado y micro y macro estabilidad financiera cuando un banco comercial, maximizador de beneficios, compite contra un banco no orientado hacia los beneficios (stakeholder bank). Los resultados teóricos son validados empíricamente usando datos bancarios de 72 países durante el periodo 1997-2007. Concretamente se muestra que a) los stakeholder banks son menos arriesgados que los bancos comerciales, b) cualquier banco es más arriesgado cuando compite contra un stakeholder bank en lugar de contra un banco comercial, c) a nivel sistémico la presencia de stakeholder banks aumenta la estabilidad financiera, d) el efecto de la regulación bancaria y de la competencia en la toma de riesgos depende de la estructura de propiedad del banco, e) la concentración accionarial incrementa el riesgo bancario, f) el diseño de los incentivos gerenciales tiene un efecto muy significativo sobre la toma de riesgos bancarios.
Author: Jiuping Xu Publisher: Springer Nature ISBN: 3030498891 Category : Technology & Engineering Languages : en Pages : 831
Book Description
This book gathers the proceedings of the 14th International Conference on Management Science and Engineering Management (ICMSEM 2020). Held at the Academy of Studies of Moldova from July 30 to August 2, 2020, the conference provided a platform for researchers and practitioners in the field to share their ideas and experiences. Covering a wide range of topics, including hot management issues in engineering science, the book presents novel ideas and the latest research advances in the area of management science and engineering management. It includes both theoretical and practical studies of management science applied in computing methodology, highlighting advanced management concepts, and computing technologies for decision-making problems involving large, uncertain and unstructured data. The book also describes the changes and challenges relating to decision-making procedures at the dawn of the big data era, and discusses new technologies for analysis, capture, search, sharing, storage, transfer and visualization, as well as advances in the integration of optimization, statistics and data mining. Given its scope, it will appeal to a wide readership, particularly those looking for new ideas and research directions.
Author: James Owen Ostler
Author: James Owen Ostler
Author: Krista Burrill Lewellyn
Author: Aswath Damodaran
Author: Daniel Kern
Author: Jiyeon Yun
Author: Mr.Gianni De Nicolo
Author: United States. Commission on Marihuana and Drug Abuse
Author: David Wm. Finnie
Author: Mónica López-Puertas Lamy
Author: Jiuping Xu