Costs Of Flexibility Research Articles

Credibility and Flexibility: Political Institutions, Governance, and Foreign Direct Investment

This article argues that the relationship between political institutions and foreign direct investment is both nonlinear and conditional upon status quo policies. The empirical analysis demonstrates an inverted U-shaped relationship between political institutions and foreign direct investment in developing countries, with four veto players being the most attractive institutional arrangement. Countries with too few or too many veto players are not favored because of either high policy uncertainty or high policy rigidity. In addition, the benefits and costs of credibility and flexibility vary in good times and hard times. The benefits of maintaining status quo tend to outweigh the costs in countries with good initial regulatory environment. The costs of maintaining status quo tend to outweigh the benefits when countries are more vulnerable to exogenous shocks.

Gas market distorting effects of imbalanced gas balancing rules: Inefficient regulation of pipeline flexibility

This paper analyzes the value and cost of line-pack flexibility in liberalized gas markets through examination of the techno-economic characteristics of gas transport pipelines and the trade-offs between different ways to use the infrastructure: transport and flexibility. Line-pack flexibility is becoming increasingly important as a tool to balance gas supply and demand over different periods. In the European liberalized market context, a monopolist unbundled network operator offers regulated transport services and flexibility (balancing) services according to the network code and balancing rules. Therefore, gas policy makers should understand the role and consequences of line-pack regulation. The analysis shows that the line-pack flexibility service has an important economic value for the shippers and the TSO. Furthermore, the analysis identifies distorting effects in the gas market due to inadequate regulation of line-pack flexibility: by disregarding the sunk costs of flexibility in the balancing rules, the overall efficiency of the gas system is decreased. Finally, the analysis demonstrates that the actual costs of line-pack flexibility are related to the peak cumulative imbalance throughout the balancing period. Any price for pipeline flexibility should, therefore, be based on the related trade-off between the right to use the line-pack flexibility and the provision of transport services.

Research Commentary—Weighing the Benefits and Costs of Flexibility in Making Software: Toward a Contingency Theory of the Determinants of Development Process Design

In recent years, flexibility has emerged as a divisive issue in discussions about the appropriate design of processes for making software. Partisans in both research and practice argue for and against plan-based (allegedly inflexible) and agile (allegedly too flexible) approaches. The stakes in this debate are high; questions raised about plan-based approaches undermine longstanding claims that those approaches, when realized, represent maturity of practice. In this commentary, we call for research programs that will move beyond partisan disagreement to a more nuanced discussion, one that takes into account both benefits and costs of flexibility. Key to such programs will be the development of a robust contingency framework for deciding when (in what conditions) plan-based and agile methods should be used. We develop a basic contingency framework in this paper, one that models the benefit/cost economics described in narratives about the transition from craft to industrial production of physical products. We use this framework to demonstrate the power of even a simple model to help us accomplish three objectives: (1) to refocus discussions about the appropriate design of software development processes, concentrating on when to use particular approaches and how they might be usefully combined; (2) to suggest and guide a trajectory of research that can support and enrich this discussion; and (3) to suggest a technology-based explanation for the emergence of agile development at this point in history. Although we are not the first to argue in favor of a contingency perspective, we show that there remain many opportunities for information systems (IS) research to have a major impact on practice in this area.

UNDOCUMENTED INDONESIAN WORKERS IN MACAU

Presenting new research findings on undocumented Indonesian migrant workers in Macau, this article explicates the dovetailing arrangements between public and private sector interests that are systemically creating undocumented labor migration flows. It then shows how these arrangements are structurally inherent in the mutual competitiveness of globalizing nodes of wealth creation. Undocumented migration cheapens production costs and results in a flexible black market of vulnerable, right-less, and exploited workers. Contrary to illusions of an urbanizing Asia with expanding spaces for civil liberties, the development of globally competitive megacities, built and supported by low-skilled migrant workers, rests on a global underclass of transient workers who bear the human costs of transience and labor flexibility, enabling megacities to externalize such costs and enhance their global competitiveness. The article analyzes the vulnerabilities of undocumented Indonesian workers in the context of Macau's rapid economic development as an aspiring megacity The Macau government's laissez-faire tolerance of such workers is grounded in its need for human labor that is abundant, cheap, marginal, and disposable. The flow of Indonesian migrant workers into Macau is linked to Hong Kong's exclusionary immigration policies, which aim at extricating surplus migrant labor. Meanwhile, the Indonesian government refuses responsibility for its migrant workers in Macau because Macau is not recognized as an official destination. The article shows how public and private interests motivate increasing numbers of migrants to become undocumented overstayers in Macau, as they try to avoid oppressive practices in labor migration from Indonesia and the exclusionary policies of Hong Kong.

A conversation with George Stalk about “disposable strategies”

PurposeThis interview aims to discuss how the disposable model can also be applied to many other aspects of business. In fast‐changing environments, any number of a business's elements may prove disposable, including organizational structures, management teams, distribution channels, and even strategies.Design/methodology/approachThe paper takes the form of an interview with George Stalk, a Boston Consulting Group senior partner, about “disposable strategies”FindingsThe paper finds that when strategies are at risk of being quickly made obsolete by changing market conditions, businesses must find ways to replace them with ones that are disposable.Practical implicationsThe main implication for innovators is that disposable factories and disposable strategies relax constraints on trying new products and new strategies. If higher costs of temporary solutions buy time and flexibility, then business outcomes can be more manageable.Originality/valueThe author explains how companies can get the most strategic advantage from disposable factories and other disposable strategies. The model should be considered when, for example, a firm faces extreme uncertainty owing to a highly dynamic, competitive market or the potential for disruptive innovation.

Investigating noise effects on the call amplitude of endangered Southern Resident killer whales (Orcinus orca)

Anthropogenic sound exposure has been identified as a potential threat to endangered Southern Resident killer whales (SRKWs). Such exposure can mask important biological sounds including those used for social functions. Vocal animals might compensate for increased background noise by calling louder (the Lombard effect). In this study, amplitude compensation was investigated in SRKW communication calls recorded off of San Juan Island, WA, U.S.A. Data were obtained from two calibrated recording systems, a shore-based hydrophone array [V. Veirs, J. Acoust. Soc. Am., 116, 2615 (2004)] and a boat-based vertical array. Calls were localized using time of arrival differences to estimate range and apparent source levels after background levels were subtracted from the signal. Call levels were calculated assuming spreading loss functions determined from sound propagation observations made in situ. Results demonstrated a positive relationship between call levels and background levels. Costs of such vocal flexibility are unknown, but may include changes in energetic demand and/or communicative functionality. Within the data ranges measured in this study, killer whales communicatively adjusted for fluctuating background noise levels. However, other sounds detected during passive listening (e.g. prey sounds) might be more susceptible to masking effects [Work supported by NOAA and Colorado College.]

00/01104 Marginal abatement costs of CO2 emission reductions, geographical flexibility and concrete ceilings: an assessment using the POLES model

00/01104 Marginal abatement costs of CO2 emission reductions, geographical flexibility and concrete ceilings: an assessment using the POLES model

The Corrosion of Character: The Personal Consequences of Work in the New Capitalism

Workplace flexibility is the topic of Richard Sennett's new book, “The Corrosion of Character: The Personal Consequences of Work in the New Capitalism,” his latest analysis of class, work, and social relations. Sennett seeks to remind us that stability—currently so maligned by business writers and consultants--has distinct benefits for individuals and society. More important, he raises a warning flag about the costs of flexibility and the toll it can take on our energy, our relationships, and our very characters.

Eurosklerose?

Conservative critics of European economic policies argue that high and persistent European unemployment is caused by institutional rigidities which are traced back to welfare states and union strength. By contrast, low US unemployment is attributed to high labour market flexibility. These claims are examined. The high social costs of US style flexibility in terms of income inequality and poverty suggest that the „cure“ for high unemployment should be sought elsewhere, namely by relying on policies - as in the Netherlands and Denmark - which combine high levels of social security with increased labour market flexibility.

Non-Exclusive Conventions and Social Coordination

We study the long run outcome when communities with different conventions interact. We introduce the notion of non-exclusive conventions to model the idea that, by incurring some additional costs, agents can remain flexible and hence coordinate their activities more successfully. We show that if these costs of flexibility are low (high) and interaction is local then the Pareto-efficient (risk-dominant) convention prevails in both communities. At intermediate cost levels, the conventions coexist. We also show that the importance of relative size of the two communities varies across interaction structures.Journal of Economic LiteratureClassification Numbers: C7, D6, F15, Z1.

Costs of flexibility and equilibrium selection

This paper studies equilibrium selection in coordination games with the help of a dynamic model of social learning. Existing research on this subject proceeds under the assumption that players can choose one or the other action. In contrast, we allow players to choose several actions at the same time (thereby ensuring coordination) by incurring some additional costs. We refer to these costs as the costs of flexibility. Our analysis suggests that if risk-dominance and payoff-dominance considerations conflict, then for low (resp. high) costs of flexibility the long-run equilibrium corresponds to the Pareto-efficient (resp. risk-dominant) equilibrium. We also show that when there is no such conflict the costs of flexibility are irrelevant and the long-run equilibrium always corresponds to the Pareto-efficient equilibrium.

The performance impact of flexibility in the Stanford FLASH multiprocessor

A flexible communication mechanism is a desirable feature in multiprocessors because it allows support for multiple communication protocols, expands performance monitoring capabilities, and leads to a simpler design and debug process. In the Stanford FLASH multiprocessor, flexibility is obtained by requiring all transactions in a node to pass through a programmable node controller, called MAGIC. In this paper, we evaluate the performance costs of flexibility by comparing the performance of FLASH to that of an idealized hardwired machine on representative parallel applications and a multiprogramming workload. To measure the performance of FLASH, we use a detailed simulator of the FLASH and MAGIC designs, together with the code sequences that implement the cache-coherence protocol. We find that for a range of optimized parallel applications the performance differences between the idealized machine and FLASH are small. For these programs, either the miss rates are small or the latency of the programmable protocol can be hidden behind the memory access time. For applications that incur a large number of remote misses or exhibit substantial hot-spotting, performance is poor for both machines, though the increased remote access latencies or the occupancy of MAGIC lead to lower performance for the flexible design. In most cases, however, FLASH is only 2%–12% slower than the idealized machine.

The performance impact of flexibility in the Stanford FLASH multiprocessor

A flexible communication mechanism is a desirable feature in multiprocessors because it allows support for multiple communication protocols, expands performance monitoring capabilities, and leads to a simpler design and debug process. In the Stanford FLASH multiprocessor, flexibility is obtained by requiring all transactions in a node to pass through a programmable node controller, called MAGIC. In this paper, we evaluate the performance costs of flexibility by comparing the performance of FLASH to that of an idealized hardwired machine on representative parallel applications and a multiprogramming workload. To measure the performance of FLASH, we use a detailed simulator of the FLASH and MAGIC designs, together with the code sequences that implement the cache-coherence protocol. We find that for a range of optimized parallel applications the performance differences between the idealized machine and FLASH are small. For these programs, either the miss rates are small or the latency of the programmable protocol can be hidden behind the memory access time. For applications that incur a large number of remote misses or exhibit substantial hot-spotting, performance is poor for both machines, though the increased remote access latencies or the occupancy of MAGIC lead to lower performance for the flexible design. In most cases, however, FLASH is only 2%–12% slower than the idealized machine.

Benefits and costs of flexibility—Short-lead-time power plants

Electric utilities face unprecedented uncertainties that complicate long-term resource planning. As a consequence, many utilities emphasize small resources that can be constructed quickly. However, insufficient data and analysis exist to adequately assess this risk-reduction strategy. This paper compares the benefits of such flexible resources (including energy-efficiency and load-management programs) with their costs, relative to large, long-lead-time power plants. The program flexibility benefits computed for various examples amount to 2–20 per cent. Cost estimates from the Northwest Power Planning Council suggest that these benefits are generally not enough to justify the higher costs of small power plants. However, the benefits are more than sufficient to justify the incremental costs associated with expansion of simple-cycle combustion turbines to combined-cycle operation. Also, the benefits amply justify application of the Council's option-and-build strategy. The first stage of their strategy involves the time-consuming but inexpensive activities of siting, designing, and licensing the plant. Then, the plant can be constructed, the site can be held as an option for several years, or the plans can be terminated. This strategy permits the second stage (construction) to be timed to match changes in load growth at very little cost. Utility conservation and load-management programs can provide substantial flexibility benefits. These benefits are a consequence of the ease with which such programs can be adjusted to match load growth. Relative to construction of a single 600 MW power plant, implementing the demand-side program described here cuts electricity price by 10 per cent, 50–100 per cent more than do small, short-lead-time power plants.

On the social costs of rent-seeking versus the social costs of production flexibility

In this paper an analysis is provided of two alternative methods of defensive behaviour by a firm. First, rent-seeking and, second, potential adjustment by way of investing in product flexibility. From the analysis it emerges that at times rent-seeking may be socially superior (less socially wasteful) to other, more traditional, means of responding to threats. This paper therefore suggests that in circumstances where some type of defensive or aggressive activity by firms is available, rent-seeking, while constituting gross social waste, may be a net social gain, given the alternative options available to the firm.

On the social costs of rent-seeking versus the social costs of production flexibility: Comment

On the social costs of rent-seeking versus the social costs of production flexibility: Comment