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A Prospect on Global Economy Post-G20: A Game Theory Vision

Alex Kung-Hsiung Chang

Keywords: Game Theory, Financial Crisis, G20, A Prisoner’s Dilemma, A Game of Ice Cream Store on the Beach, A Wise Pig Game, A Welfare Game.

A road to recovery after G20 is an important public policy around the world since financial crisis in 2008. It will be an interesting issue to discuss the topics using the game theory. This paper discusses four related topics about the financial crisis after G20. First of all, I use a prisoner’s dilemma to discuss the cooperation among G20. I use a game of ice cream store on the beach to discuss the position of main money around the world. A wise pig game is used to discuss the Ma’s economic policy on China. And a welfare game is sued to discuss the fat cat phenomenon of rescued firms in a lot of countries.

A Case Analysis of the Transformational Path in Traditional Industry Using Dynamic Business Model

Henry H. Y. Hsieh / Yu-Ting Wu

Keywords: Business model、Dynamic capability、Dynamic capability matrix、Business model wheel

There have been many significant changes in Taiwan traditional industry, i.e. industrial environment, social structures and customs. Traditional confectionary industry encounters two challenges, one is product and capability restricted in the traditional operational model. The other is its definition confined in the traditional boundary and business scope. However the fast changing external environment becomes more threatening to existing traditional business. It is inadequate to cope with the impending challenge by exploiting only internal resources or capability argued by Resources-Based View or industry positioning to discover new opportunity supported by Industry Organization theory. By taking the Jiu Zhen Nan Taiwan Pastry as an example. This study takes Case study as its research methodology by Pattern-Matching、Explanation-Building、Time-Series. We find a firm how to regulate the business model.
After a long period of field studying and analyzing, we find that business model is dynamic, like a wheel. By the Dynamic Capability matrix (DC matrix), company should expand its industry boundary and redefine the industry, such as redefine its Industry as culture and innovation industry. In addition, company can extend its product and core competence by learning, innovation, remodeling, and networking to increase its competitiveness. In summary this research focuses these two dimensions of the company to explore the future development direction, diversification, multi-brand strategy and new business model.

Institutional Investors and CEO Compensation in High-Tech Businesses

Ying-Fen Lin / Yi-Chen Liao

Keywords: Active Institutional Investors, Outside Directors, CEO Compensation

Most previous researches believe that the connection between CEO compensation and company performance will resolve agency problems between the principal and the agent. However, this method will cause unlimited increase of agency cost and make CEO pay attention to only short term company performance and therefore ignore the long term growth. Thus, this research includes two other mechanisms, institutional investors and outside directors, to find out the impact of the two on CEO compensation. This study classifies the characteristics of institutional investors into active institutional investors and inactive institutional investors. The samples of this study are listed companies in high tech businesses during 2002 and 2003 in Taiwan. Result shows a positive relationship between concentration of stock holding by active institutional investors and CEO pay for performance sensitivity but a negative relationship between that and CEO compensation standard when company scale, research and development intensity, profit variance and performance are held constant. This result is not found in inactive institutional investors. Outside directors do not have a negative relationship with CEO compensation. This shows that an active institutional investor plays the role of sharing compensation with CEO to reduce agency problems. Also, the attention an active institutional investor pays to CEO compensation structure also influences standard and composition of CEO compensation.

Building an Integrated System of Long-term Care in Taiwan: On Resources Coordination

Wei-Wen Huang / Peter Hsien-Chueh Yang / Alex Kung-Hsiung Chang / Tsung-Tao Chen

Keywords: Long-term healthcare, Long-term healthcare insurance, The ageing society, Life expectancy, Birthrate.

Due to the less-children trend, low birthrate as well as the advancements in medical technology, life quality has progressed and life expectancy extended. Significantly, such a drastic change has a great impact on the senior citizens. Particularly in aspect of medical care, the chronic diseases along with their high-frequency functional disorders so often relentlessly plague the senior citizens, so the daily healthcare expense will rise in correspondence with their aging. By and large, healthcare for the seniors has become a threatening social issue at stake.
In the present, the long-term medical healthcare system in Taiwan is much scattered among a variety of institutions: the chronic-disease hospitals belonging to the public health bureaus and many healthcare institutions supported by the social welfare system. In addition, the honored citizen healthcare system also functions to provide related services for the honored citizens. Nonetheless, all of them are in lacking of a complete and continuous central system that combines the necessary resources.
Comparing USA (with mixed system of long-term healthcare insurance and the tax revenue), England (with taxation) and Japan’s (with long-term healthcare insurance) three systems of long-term healthcare, we thus conclude that the government should set up an integrated system of long-term healthcare and encourage some private companies to develop about long-term care services.