We develop a discretization and solution technique for elliptic problems whose solutions may present strong variations, singularities, boundary layers and oscillations in localized regions. We start with a coarse finite element discretization with a mesh size H, and we superpose to it local patches of finite elements with finer mesh size h much less-than H to capture local behaviour of the solution. We discuss the implementation and illustrate the method on an industrial example.
Financial service providers are facing a major paradigm shift. The understanding of what eventually constitutes customer value is being extended; economic value as the sole core of exchange is a far too limited perspective in contemporary competition. To address this emerging shift, the purpose of this study is to reframe the logic of value creation in financial services. As a result, a tentative framework for value creation logic in financial services is developed and discussed. On the basis of the framework, financial service providers should not limit their attention and resources to the exchange process, but identify innovative value-creating mechanisms through which they could contribute to the customer value actualization process. Our tentative framework (i) offers financial service providers guidance on which innovative value-creating mechanisms would enable them to participate in their customers' value actualization process; (ii) shows how a product becomes a channel for a service, specifically a solution possessing value in the customer's routine processes; (iii) illustrates that researchers and service providers should develop their understanding of customers beyond the traditional loan, insurance and/or investment product orientation.
This study aims to develop a complementary and more comprehensive measurement to assess the nature of investment value affecting consumers' investment behavior. Recent research suggests that consumers may desire and obtain certain outcomes from investments that have not been anticipated in mainstream finance and economics literature. These benefits might be hedonistic or altruistic, self-expressive or emotional and experiential. Yet, while an increasing amount of attention has been paid to this topic, little effort has been made to develop an appropriate measurement scale for the subjective consumer perceptions of investments. To address this gap in the literature, this study introduces the concept of Perceived Investment Value (PIV), and develops and validates a measurement scale for the concept. The ultimate 18-item PIV scale parsimoniously represents six perceived investment value dimensions: Economic value-Monetary savings; Economic value-Efficiency; Functional value-Convenience; Emotional value-Emotions and Experiences; Symbolic value-Altruism; and Symbolic value-Esteem. The final measurement scale demonstrates acceptable reliability and validity. Implications related to the developed scale are discussed in terms of their potential to inform a future research agenda
This paper evaluates how playing an insurance game affects insurance enrollment. Insurance games not only allow individuals to learn about insurance, but also experience it. Based on a randomized experiment in the Philippines involving an insurance game in 2010, complemented by a follow-up survey in 2013, I find that playing the insurance game significantly increases real-life enrollment in the country's social health insurance scheme. Furthermore, I explore whether this result is related to changes in knowledge and attitude. When comparing the outcomes for the treated and the control groups, the game has no impact on either knowledge about or attitude toward insurance. However, when estimating the impact of the game on risk attitudes, I find that those who played the game in 2010 are significantly more risk averse than the control group.
In comparing an immediate life annuity with a payout-equivalent investment fund payout plan (self-annuitization), research to date has focused mainly on shortfall probabilities of self-annuitization. As an exception, Schmeiser and Post (2005) propose a family strategy where the chances of self-annuitization (i.e., bequests) are taken into consideration as well. In such a family strategy, potential heirs must bear shortfall risks, but in return have a chance of receiving a bequest. This paper analyzes under which conditions heirs will be willing to agree to a family strategy. The idea of a family strategy is integrated into a realistically calibrated intertemporal expected utility framework, taking into account risks arising from stochastic life span, asset returns, and nontradable labor income. A family strategy is shown to be accepted for many parameter combinations, especially in families with low marginal tax rates, if the heirs are wealthy, or in a case where the retiree has an average population life expectancy. We also work out how family self-annuitization decisions interact with asset allocation, saving decisions, and labor income risk. Under realistic conditions our results support two explanations for the empirically observable low demand for annuities (the so-called annuity puzzle), namely intra-family risk sharing and high cost of market-annuitization.
For creating or adjusting credit scoring rules, usually only the accepted applicant's data and default information are available. The missing information for the rejected applicants and the sorting mechanism of the preceding scoring can lead to a sample selection bias. In other words, mostly inferior classification results are achieved if these new rules are applied to the whole population of applicants. Methods for coping with this problem are known by the term "reject inference." These techniques attempt to get additional data for the rejected applicants or try to infer the missing information. We apply some of these reject inference methods as well as two extensions to a simulated and a real data set in order to test the adequacy of different approaches. The suggested extensions are an improvement in comparison to the known techniques. Furthermore, the size of the sample selection effect and its influencing factors are examined.
