Browsing by Subject "Risk"

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A computational study on the effects of the organizational structures on the risk of different types of banking groups
(2023) Jamshidisafari, Saeed; Burghof, Hans-Peter
In this dissertation, two theoretical models are used to compare centralized and decentralized banking structures. In the first approach, the problem for both banks is to choose an expansive or restrictive credit policy without having complete knowledge of the state of the overall and local economies. Observing and appraising verifiable information (hard information) is the benefit of the centralized banks, whereas considering unverifiable information (soft information) about the local economies, so-called soft signals, is the important asset of the decentralized banks. To compare two banking systems, the risk-return trade-off method is used to determine which type of banking system might have better performance. Although the overestimation of the local economy may have a negative impact, this soft signal has a quite positive impact on risk measures in general. As a result, decentralized bank managers are better at detecting bad loans in their banks. In addition, because small banks have less bureaucracy, the borrower can obtain credit more effortlessly and swiftly. In the second approach, a theoretical bank run model based on Chari and Jagannathan (1988) is developed by implementing a cheap talk game to compare banking structures during bank shocks when managers communicate strategically with depositors to prevent non-efficient bank runs. These two banks behaved considerably differently in the local economy, and this issue is directly tied to regional culture. The limitation of punishment in the legal system incentivizes the management system in centralized banks at some point to be cunning. Consequently, based on the modified model, the higher the punishment or the lower the salary, the less likely the manager is to be persuaded to lie. On the other hand, in small banks, trust and soft information between bank management and depositors protect inefficient bank runs. A decentralized banking system can improve the financial systems credibility by mitigating undesirable shocks during times of crisis. Hence, having decentralized banks in the banking structure increases the depositors’ welfare.
Bringing light into the dark side of digitalization : consequences, antecedents, and mitigation mechanisms
(2023) Schmied, Fabian; Gimpel, Henner
As digital technologies permeate all aspects of our professional and private lives, digitalization causes profound changes for individuals, organizations, and societies. The use of digital technologies makes many activities easier, safer, faster, or more comfortable. In addition to many positive changes, digital technologies are also associated with numerous risks and side effects. The use of digital technologies might come along with severe negative consequences for individuals, organizations, and societies. The negative consequences can be triggered by various antecedents. In addition to identifying the negative consequences of digitalization and their antecedents, it is particularly important to develop appropriate mitigation mechanisms. This dissertation provides novel insights for IS researchers to better understand the negative consequences of using digital technologies. It contains a broad overview of the risks and side effects of digitalization and investigates related antecedents and mitigation mechanisms. To reach this goal, regarding research methods, this dissertation relies on the structured analysis of (scientific) literature and (expert) interviews as well as the analysis and interpretation of empirical data. Chapter 2 contributes to the research on the negative consequences of digitalization. Section 2.1 provides a comprehensive multi-level taxonomy of the risks and side effects of digitalization (RSEDs). Section 2.2 builds on Section 2.1 and is a substantial expansion and improvement of Section 2.1. The iterative taxonomy development process was complemented by four additional cycles. The final taxonomy comprises 11 RSEDs and their 39 subtypes. Both articles show that there is a wide range of risks and side effects of digitalization that need to be explored in more detail in the future. Chapter 3 focuses on the antecedents of digitalization’s negative consequences. Section 3.1 sheds light on individuals’ concerns towards automated decision-making. The concerns are derived from academic literature and semi-structured interviews with potential users of algorithm-based technologies. Section 3.2 focuses on the evaluation of specific mHealth app features by potential users in Germany and Denmark. The study draws on survey data from both countries analyzed using the Kano method. Further, it comprises a quartile-based sample split approach to identify the underlying relationships between users’ characteristics and their perceptions of the mHealth app features. The results show significant differences between Germans and Danes in the evaluation of the app features and demonstrate which of the user characteristics best explain these differences. Both articles shed light on possible antecedents of negative consequences (i.e., user dissatisfaction, non-use) and thus contribute to a better understanding of the occurrence of negative consequences. Chapter 4 shows exemplary mitigation mechanisms to cope with the negative consequences of digitalization. Section 4.1 takes an organizational perspective and identifies data privacy measures that can be implemented by organizations to protect the personal data of their customers and address their privacy concerns. These measures were evaluated by analyzing data from two independent online surveys with the help of the Kano method. Section 4.2 focuses on an individual perspective by presenting the concept of a privacy bot that contributes to strengthening the digital sovereignty of internet users. With the help of the privacy bot, page-long privacy statements can be checked against previously stored individual data protection preferences. Both articles provide appropriate mitigation mechanisms to cope with users’ privacy concerns. These two examples show that there are a variety of ways to counter the risks and side effects of digitalization. The research articles included in this dissertation identify various risks and side effects of digitalization that need to be explored in more detail in future research. The two articles on antecedents help to better understand the occurrence of negative consequences of digitalization. The development of appropriate countermeasures, two of which are exemplified in this dissertation, should result in the benefits of digital technologies outweighing their risks.
Land use management under climate change : a microeconomic analysis with emphasis on risk
(2018) Reinmuth, Evelyn; Dabbert, Stephan
This cumulative dissertation was conducted under a grant from the German Research Foundation (DFG) for the research group FOR 1695 - “Agricultural Landscapes under Global Climate Change – Processes and Feedbacks on a Regional Scale”. The goal of the sub-project from which this dissertation stems from was to explore, extend and strengthen the scientific basis for learning and risk strategies and the adaptation behavior of farmers’ economic planning decisions in crop production under the influence of climate change. The integrated bioeconomic simulation model FarmActor, was to be used as an experimental tool to develop an interdisciplinary methodological approach supported by empirical work in two study regions in Southwest Germany, the Kraichgau and the Swabian Alb. This dissertation examines risk in the context of land use management and specifically crop production. Risk in this context is related to how outcome distributions are affected by climatic influences. Risk strategies assess these contributions and account for them in the resulting decisions. The thesis is written as a cumulative dissertation and is composed of five articles. Four articles have been published by peer-reviewed journals. A fifth article has been published as a peer-reviewed conference proceeding. The article at fifth place represents the results of the main focus of this dissertation as presented in the following. Available economic models assume that farmers assess climatic risks only through yields or costs when building their land use management risk strategy for crop production. However, the available methodological approaches have been criticized for either under- or overestimating farmers’ actual behavior. In reality, and as a basis for field allocation planning, farmers have additional knowledge from monitoring crop development throughout the whole season. Yield is actually just the last point in a long sequence of (economic) evaluative observations about the production process. This influences how farmers define not only the riskiness of a yield distribution but also its costs. We hypothesize that, because it is not possible to methodologically integrate process evaluations in economic planning decisions, models lack performance, and as a consequence, it is very difficult to conduct proper research on the climate’s influences on land use management decisions. In this original research, we present a newly developed downside risk measure based on evaluations throughout the production process that can be included in the planning process as an additional parameter—so-called Annual Risk Scores. A comparative static analysis was performed to demonstrate how ARS scores assess future climatic conditions in the example of winter wheat production in the Kraichgau region as supported by empirical data. It was shown that the mechanism is sensitive to different climatic conditions. Furthermore, the ARS scores provide a different picture of climatic influence compared to an analysis based only on yields. The last article presented in this dissertation represents an integrative review that promotes more efficient model development and the reuse of newly developed methodologies in the field of integrated bio-economic simulation models. The review is based on lessons learned from working with the simulation model. Thus, the intended and outstanding full implementation of the ARS mechanism is presented in the last part of the synthesis, where we advise including the ARS scores as another constraint in the field allocation mechanisms of the FarmActor model. This is expected to improve the integration of both bio-physical and economic dimensions for complex integrated bio-economic simulation models.