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20 December 2015, Volume 23 Issue 12 Previous Issue    Next Issue

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Bank Equity Connection, Banking Competition and Financing Constraints of Private Enterprises LIU Xing, JIANG Shui-quan 2015, 23 (12):  1-10.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.001 Abstract ( 1808 )   PDF (1032KB) ( 1749 )   Save Under the unified analytical frame for the integration of behavioral finance theory、enterprise organization theory and credit rationing theory, the holding of bank ownership is selected as a research perspective and constructs a bank credit allocation model based on the heterogeneous expectations to analysis the impact of bank equity connection and banking competition on the financing constraints of private enterprises. Based on the data collected about A-share private listed companies from 2006 to 2013,the objective of this paper to explore the relationships among bank equity connection, banking competition and the financing constraints of private enterprises by Heckman two-stage model, cash-cash flow sensitivity model etc. It's found that holding bank ownership or improving banking competition can significantly ease the financing constraints of private enterprises, this effect is positively correlated with the shareholding proportion, and their roles are interchangeable in easing financing constraints. However, the further study indicates that the impact of bank equity connection on the capital allocation efficiency of private enterprise is two-fold. On the one hand, the financing advantages of bank equity connection can alleviate the under-investment caused by the shortage of funds. On the other hand, the existence of agency problems may lead to the part alienation of bank equity connection. If so, the positive effect of bank equity connection on the capital allocation efficiency will be weakened and may even reverse. The above findings not only enrich the related research achievement of principal-agent theory and corporate financial theory, but also contribute to a comprehensive and in-depth understanding of the "bright side" and "dark side" of bank equity connection, and provide some theoretical and experimental evidence to the gradual reform of banking industry. References | Related Articles | Metrics

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Natural Hedging Strategy for Longevity Risk Based on Price Adjustment ZENG Yan, ZENG Qing-zou, KANG Zhi-lin 2015, 23 (12):  11-19.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.002 Abstract ( 1900 )   PDF (1644KB) ( 1941 )   Save In the framework of longevity risk hedging, a price-adjusted longevity risk natural hedging model is established by introducing the exogenous product prices. Firstly, the analytical solution of the optimal product mix of the model is derived by adopting the optimization theory. Then, optimal prices for life insurance products and annuities are obtained under the constraint that the actual product mix equals to the optimal product mix of the model. Under the optimal prices, the optimal product mix of the model is truly realized, that is, the actual product mix is exactly the optimal product mix which minimizes the longevity risk. Finally, the effectiveness of the natural hedging strategy based on the effect of price adjustment is illustrated by using numerical examples. Furthermore, the impact of the interest rates, age and gender on the natural hedging strategy is also examined. References | Related Articles | Metrics

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Stock Returns Prediction Based on Error-Correction Grey Neural Network YU Zhi-jun, YANG Shan-lin, ZHANG Zheng, JIAO Jian 2015, 23 (12):  20-26.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.003 Abstract ( 1867 )   PDF (1379KB) ( 1495 )   Save In the stock market, it is a crucial issue concerned by all market participants to predict stock returns accurately. However, due to the complicated factors affecting stock market, experience shows that it is very difficult to improve the accuracy of forecasting by setting up single forecasting model. In this article, the deficiencies of the present methods for stock returns forecasting are described and a new approach on forecasting stock returns with the improvement of prediction accuracy is proposed by performing error analysis and correction. First, the grey neural network forecasting model is established by using the training sample data, and then it is used to carry out the preliminary prediction of stock returns. Second, the EGARCH is introduced to analyze the prediction error sequence and predict the subsequent error. Third last, the correction of preliminary prediction values is calibrated. The simulation calculation of the Shanghai composite index as an example is performed and the results show that the precision of prediction is increasing by 9.3 percent significantly compared with the prediction accuracy before correction. Researches also suggest that the error correction process is valid, and then thus the feasibility of this method is verified. References | Related Articles | Metrics

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Comparative Research on the Cost and Profit efficiency of Commercial Banks under Systemic Risk Constraints LIU Meng-fei, WANG Jun 2015, 23 (12):  27-34.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.004 Abstract ( 1625 )   PDF (1426KB) ( 1359 )   Save In this paper, the unbalanced panel data of 16 listed banks in China from 2006 to 2012 was used. Firstly, systemic risk and non-systemic risk were decomposed through the risk estimate of the three-factor model. Then by constructing a stochastic frontier cost function, the cost and profit efficiency of listed banks was estimated under systemic risk constraint, and the conclusion of risk and risk-free models was compared. It was found that ignoring risk factors will lead to efficiency values underestimated. In both cost and profit efficiency models the inefficiency effect of systemic risk is significantly positive, which means that higher risk causes more inefficiency effects. To strengthen risk management and prevent large fluctuations of systemic risk is conducive to improvement of commercial banks' efficiency. References | Related Articles | Metrics

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Deficiency Pledge Financing Contract Design with Accounts Receivable for SMEs MA Ben-jiang, JIANG Yun-fang, CHEN Xiao-hong 2015, 23 (12):  35-44.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.005 Abstract ( 2891 )   PDF (1011KB) ( 1535 )   Save Managers' moral hazard problem exists in debt financing contracts and equity financing contracts so that efficiency improvement is available compared with symmetric information situation.For this problem,under the premise of the deficiency pledge of small and medium enterprises and existence of accounts receivable,the conditional financing contracts with accounts receivable are presented based on asymmetric information game theory.This research shows that the conditional financing contracts can effectively reduce small and medium enterprises lie about real project benefits and move capital for investment of higher risk projects compared with debt contracts,at the same time,the conditional financing contracts can ensure managers pay more efforts compared with equity contracts.Furthermore,the conditional financing contracts can achieve strict Pareto improvement of both the equity and debt contracts,but the latter is under certain conditions.At the end,an example is used to explain the effectiveness of research conclusions. References | Related Articles | Metrics

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Research on Fund Companies Competition Strategy——Based on Product Innovation and Mechanism Innovation Perspective JIANG Yun-bing, WANG Yan-ming, WANG Shu-hui, LI Sheng-lan 2015, 23 (12):  45-52.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.006 Abstract ( 1782 )   PDF (1317KB) ( 1855 )   Save In this paper, the effectiveness of product innovation strategy and mechanism innovation strategy in fund company competition during 2004-2012 are examined. Taking market share as entry point with a dynamic panel data model estimated by system general moment method (system GMM), the empirical result shows that historical performance is an important factor that affects the market competition results. Meanwhile investors prefer the fund company with superior product innovation ability and enterprising spirit of mechanism innovation, rather than fund companies with a long history and many funds under management. The fund company ownership is irrelevant. Segmenting the fund market by investment targets, it's demonstrated that in the stock fund market, star strategy is particularly important, while in the bond fund market, the increasing supply of new funds and relative supply intensity is the optimal strategy. The same as in the stock fund company, to gain more market share fund company should provide new funds with substantial innovation characteristics and increase the number of funds that fund practitioners hold. Therefore, decision-makers of fund company should take fund investors' improved cognitive ability of product innovation and the need to bind the interests of related agents into consideration, and formulate the competition strategy according to different types of fund. References | Related Articles | Metrics

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Game Model Analysis of Asymmetry Based on Environmental Information and Financial Markets QU Guo-hua, ZHANG Han-peng, LIU Zeng-liang, XU Ling, ZHANG Zhen-hua, ZHANG Qiang 2015, 23 (12):  53-62.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.007 Abstract ( 1734 )   PDF (941KB) ( 1326 )   Save Due to a lack of essential environmental information, asymmetric information can lead to some problems such as incomplete information for investment decisions and misallocation of financial markets funds in financial markets. Another game model which include three players, government, financial markets and firm is developed by incorporating government moves based on the game model of Nikolaou, Chymis and Evangelinos[5] financial markets, environmental information asymmetry. By setting the relevant parameters, it is revealed that Nikolaou, Chymis and Evangelinos[5] model could be covered by above mentioned game model and proved, under the conditions for participation in the government's case, that asymmetric information problem due to the lack of accurate environmental information can be solved by introducing third-party international environmental audit, so as to providing a new research angle for China's environmental problem resolution mechanism. References | Related Articles | Metrics

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Optimal Portfolio Choice under the Mean-Variance Model with General Uncertainty HE Chao-lin 2015, 23 (12):  63-70.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.008 Abstract ( 1641 )   PDF (912KB) ( 1859 )   Save The problem of model uncertainty is the model's basic characteristic in the system of society and economy, the portfolio choice often studies the characteristic of investment decision under a specific environment based on an asset return model that describs the process of asset price. Since the investor is often hard to imagine all states of nature relevant to his portfolio choice problem which causes an uncertainty concerning an asset return model, the uncertainty is characterized as general uncertainty where neither states of nature nor their probabilities are known. So, in this paper, the problem of optimal portfolio choice is studied under the mean-variance model with general uncertainty by introducing a stochastic variable to measure its general uncertainty, which is characterized by the memory and indifference parameter, and reflects the investor's model belief degree. Based on the theory of capital market line, it builds that the optimal portfolio choice is a linear function of the model belief degree and the conventional portfolio choice based on the mean-variance model; based on the different pairs of memory and indifference parameter, the method of case-based reasoning is applied to determine the optimal model belief degree of the investor with quadratic utility function, obtain the optimal portfolio choice under the mean-variance model with general uncertainty, and do an empirical study based on the sample of Shanghai Exchange Composite Index monthly returns from January 1997 to August 2014. Empirical results show, the investor with a large risk aversion, characterized by high memory parameter and small indifference parameter, quickly adjusts its model belief degree and the portfolio choice. Such an investor may exhibit availability and representativeness biases, and often take the active portfolio strategy; on the contrary, the model belief degree and the portfolio choice is gradually adjusted, the investor may exhibit anchoring and conservatism biases, and often take the passive portfolio strategy; the effect of the nearer stock market information on optimal portfolio choice is stronger than that of the farther stock market information on optimal portfolio choice, but the effect of model general uncertainty on optimal portfolio choice is strongest. This study reflects the investor's bounded rationality and extends the problem of portfolio choice to the field of behavioral finance. References | Related Articles | Metrics

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Realization and Implementation of Mechanism Design with Right in Land Use ZHANG Xue-feng 2015, 23 (12):  71-76.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.009 Abstract ( 1647 )   PDF (1264KB) ( 1418 )   Save The objective of a mechanism designer is to optimize the social welfare function based on environment parameter spaces; however, relevant information about environment parameters is scattered in the economy. While mechanism designers would like to collect as much relevant information as possible, their aim is to make full use of the gathered information to develop a social decision. Mechanism is usually discussed under the framework or realization and implementation. The essential difference between these two frameworks is that the latter uses strategic interactions. The realization of mechanism with right in land use was discussed under a two dimensional message spaces. A mechanism can be designed to implement dominant equilibrium which addresses both information efficiency and incentive compatibility. The results showed that there exists a information efficient mechanism which can realize the goal function of government with truth-telling constraint. If the agents have private information, their truth-telling strategies may not be Nash equilibrium, but it could be a dominant equilibrium implemented by a mechanism. References | Related Articles | Metrics

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Evolutionary Game Model on Competition and Cooperation between Counties in Land-supplied Process GUO Ben-hai, LI Jun-qiang, LIU Si-feng 2015, 23 (12):  77-85.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.010 Abstract ( 1795 )   PDF (2071KB) ( 1753 )   Save Based on the land supply competition and cooperation relationships between developed and developing counties, a evolutionary game model is established; According to this model and lots of research on different typical cases,the directions and tendencies of convergence of evolutionary stable strategy are finally analyzed; The results prove that, whether the county governments will take the strategy of mutual cooperation in land supply policy, is largely depended on the inspection from the superior governments, value-added benefits from the local industry and the costs of infrastructure construction. References | Related Articles | Metrics

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The Running Mechanism and Prediction of the Growth Rate of China's Carbon Emissions ZHANG Guo-xing, ZHANG Zhen-hua, LIU Peng, LIU Ming-xing 2015, 23 (12):  86-93.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.011 Abstract ( 1632 )   PDF (2121KB) ( 1598 )   Save It can provide theoretical guidance for the development of low-carbon policies to research and forecast the growth rate of carbon emissions since carbon emissions have become an important reason for global warming. The growth rate of China's carbon emissions was decomposed into short-term volatility and trend term these two sequences by the use of empirical mode decomposition method, and the national policy, the domestic macroeconomic changes and the financial crisis influence to the short-term volatility and trend term were analyzed respectively. On this basis, using dynamic neural network to forecast the short-term volatility and trend term, and sum the two predicted values as the final growth rate of carbon emissions. Finally, from the error sequence of absolute value maximum, minimum, mean and standard deviation of the four angles to compare this prediction method with neural network model that separate input variables of carbon emissions or the growth rate of carbon emission, and found that the model presented in this paper can predict the growth rate effectively. References | Related Articles | Metrics

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Stochastic Differential Game Models for Vertical Cooperative Mitigation in Electricity Market with Combined Application of Low-carbon Technologies HUANG Shou-jun, CHEN Qi-an, REN Yu-long 2015, 23 (12):  94-104.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.012 Abstract ( 2090 )   PDF (975KB) ( 2012 )   Save In the criterion of low-carbon power dispatching,the impacts of mitigation technologies and their synergy effects on low carbon load demand and the bounded rationality learning process of grid corporation purchasing electricity are considered. The stochastic differential game models for vertical cooperative mitigation when a power supplier applies three low-carbon technologies are developed. The equilibrium application of mitigation technologies,stable expectation and variance of electricity purchases in Stackelberg game and cooperative game are obtained respectively,and the optimal mitigation payment proportion in Stackelberg game is got with Hamilton-Jacobi-Bellman Equation. The effects of symmetry and application quantity of mitigation technologies on the feedback equilibria are investigated,and the feedback equilibria in these two game structures are comparatively analyzed. A profit-sharing contract based on bidirectional weighted Rubinstein-Stahl bargaining model to coordinate the decision system is presented,and the basic models are extended to cooperative mitigation models with multiple mitigation technologies. The results indicate that mitigation input increases electricity purchases of the grid corporation in a certain condition and range,and the power supplier is to accept greater risk for the attempt. The cooperative game is more suitable for optimizing the power source structure of electricity market and complying with the policy orientation of low-carbon power dispatching. The optimal application of mitigation technologies,stable expectation and variance of electricity purchases,and systemic equilibrium profits are positively correlated with the investment efficiency,synergy effects between technologies and the quantity of the selected low-carbon technologies. References | Related Articles | Metrics

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Study on Channel Mode, Efforts Input & Efficiency of Fresh Agricultural Products Supply Chains PU Xu-jin, FAN Wang-da, WU Ya 2015, 23 (12):  105-112.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.013 Abstract ( 1672 )   PDF (1525KB) ( 1486 )   Save In this paper, the feature and implications of three main different channel modes of fresh agricultural products supply chain in China are summarized. Using game theory approach to build different channel modes, production efforts, sales efforts and the total utility of the supply chain are analyzed. The results show that farmer's risk-aversion preference is the key factor to the choice of different channel modes, when the farmer holds a low degree of risk-aversion, he should choose the "direct to consumers" mode, and production and sales efforts will be higher than others. While the farmer holds a high degree of risk-aversion, it is better for him to take part in the "farmers to supermarket" mode for the reason of a higher utility, and the production and sales efforts will be higher. In particularly, compared with loose-type "farmers to supermarket" mode, symbiotic-type "farmers to supermarket" mode can both improve the production efforts of farmers and the sales efforts of the supermarket. This study will provide a valuable guidance to the decision of fresh agricultural products supply chains. References | Related Articles | Metrics

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Comparison and Analysis on Pricing Policies for Fresh Agricultural Produce Supply Chain with Dominant Retailer LI Lin, FAN Ti-jun 2015, 23 (12):  113-123.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.014 Abstract ( 2129 )   PDF (1671KB) ( 1968 )   Save Monitoring and control of time-sensitive perishable products can be facilitated by the application of radio frequency identification (RFID) technology, which enables retailer take more flexible pricing and ordering polices based on real-time data of product quality and values collected by RFID. Highly perishable nature and time-sensitive demand are considered as typical characteristics of fresh agricultural product. Under different pricing strategies including fixed pricing, dynamic pricing and pricing with markdown timing, the single-period pricing and ordering decision making models are developed, from which the optimal decisions are obtained. All the optimal retail prices in the above three strategies would be lower with the smaller value of parameters of value deteriorating rate and inventory cost. However, these two parameters exert the opposite effects on the time point of pricing reduction. In terms of optimal retail price, total demand, and optimal profit for retailer, the comparison and analysis of three pricing strategies are then studied, which shows promising benefits of applying the flexible pricing strategy with RFID technology. Finally, a numerical example is provided to support the ndings. References | Related Articles | Metrics

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Decision Analysis of Retailer-dominated Hybrid Channel Supply Chain Under the Asymmetric Cost Information YAN Bo, LIU Yan-ping, LI Hong-yuan 2015, 23 (12):  124-134.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.015 Abstract ( 1774 )   PDF (3437KB) ( 1718 )   Save With the development of society,an increasing number of supply chains consisting of manufacturers and retailers are dominated by large retailers, among which, some manufacturers begin to open direct channel to sale goods besides the traditional distribution channel. Vertical and horizontal competitions lead to the manufacturers to hide true cost information in pursuit of self-interest maximization. To discuss the misreporting impact on the supply chain, a hybrid channel supply chain is estabished, which is dominated by a common retailer who acts as the leader of Stackelberg game, and contains a manufacturer (Manufacturer 1) in a dual-channel supply chain and a manufacturer (Manufacturer 2) with only a traditional channel. First, the optimal pricing of the supply chain in the situation of cost information asymmetry and the manufacturers' optimal lied factor for the sake of profit maximization are discussed. Then, three misreporting strategies are compared with the situation of complete information respectively to analyze misreporting's impact on supply chain performance, and some conclusions are derived through MATLAB by a numerical example. The conclusions are: (1) Manufacturers will report their cost information higher than the true cost for profit maximization and different manufacturers' optimal lied factors have different relationship with the cross-price sensitivity and cost. (2) If the cross-price sensitivity of the customer is not very high, Manufacturer 1's reporting his cost information higher will reduce his own profit but increase Manufacturer 2's profit. If not, all the participants' profit will decrease. (3) That Manufacturer 2 reports his cost information higher is good for traditional channel of Manufacturer 1, but will hurt his direct channel. That Manufacturer 2 reports his cost information higher is bad for his own profit if the cross-price sensitivity of the customer is not very high, conversely, all the supply chain members will benefit. (4) If the two manufacturers both misreport their cost information, the profits of supply chain members and the whole supply chain will reduce. Furthermore, the bigger one manufacturer's lied factor is, the smaller his profit is and the smaller the whole profit is. Besides, the bigger the cross-price sensitivity of the customer is, the more obvious the change trend is. Theoretical system of the hybrid channel supply chain further and these conclusions can enhance the efficiency of the hybrid channel supply chain and provide decision-making basis for its participants can be improved in this paper. References | Related Articles | Metrics

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Model and Algorithm for Order Acceptance on Multi-node Production Environment with Limited Buffer WANG Lei, XU Shao-yun, ZHAO Yang, ZHAO Qiu-hong 2015, 23 (12):  135-141.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.016 Abstract ( 1428 )   PDF (1346KB) ( 1311 )   Save Order acceptance exists in production management, however, the influences of buffers on order acceptance have not been considered in existing order acceptance in multi-nodes. To study this problem, an order acceptance model is set up based on multi-nodes production of buffers constraints. The hybrid algorithm with improved NEH algorithm, discrete harmony search and variable neighborhood search is proposed for solving the model. Experiments show that when the size of problem is small, good results are abtained and when the size of problem is large, general results are obtained. Completion time of order is less affected by the size of buffer and is similar to results of unlimited buffer. The computation speed of hybrid algorithm is better than other algorithms. The hybrid algorithm can solve the model. References | Related Articles | Metrics

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Advertising and R&D Innovation under Debt Constraint CHEN You-hua, NIE Pu-yan, PENG Bi-yu 2015, 23 (12):  142-149.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.017 Abstract ( 1763 )   PDF (913KB) ( 1414 )   Save Combining output market with capital market and based on the capital structure industrial organization theory, how debt affects firm's advertising and R&D investment behavior along with what are the relationships between advertising and R&D innovation are studied in this paper. After theoretical and empirical analyzing, the following conclusions are achieved. Firstly, debt increases firm's advertising but inhibits R&D investment and different kinds of debts have different effects. Besides, firm's advertising and R&D behavior are different between different industries and manufacturing firms invest both of them while non-manufacturing firms only perform one of them. Moreover, advertising investment is complementary with R&D investment in manufacturing firms but it is competitive with R&D innovation in non-manufacturing firms. This study is valuable for the improving of capital structure industrial organization theory and helpful for firm's advertising as well as R&D competition strategy. References | Related Articles | Metrics

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Research on the GSP Mechanism with Advertiser Reputation and User Experience HE Ji-wei, LIU Shu-lin 2015, 23 (12):  150-156.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.018 Abstract ( 1657 )   PDF (1556KB) ( 1479 )   Save At present, the bid for online advertising position is an important way for many advertisers to promote their products, and online advertising position auction has become the most important means to make profits for the search engine. In our country, the profit-driven nature of the advertising position auction mechanism causes a large number of false advertising and a wide public controversy. Those advertisers with high bids do not always bring good experience to search engine users. This has become important issues needed to be solved by search engine. In this paper, a creditable effective auction mechanism is presented, considering not only the reputation of advertisers but also the experience of users. A symmetric Nash equilibrium is defined, characterizing the equilibrium bidding strategy of the advertisers and showing that the allocation is effective under our mechanism. Compared with the GSP mechanism of ranking only by bid, it is found that user satisfaction is improved, which increases the competitive advantage of the search engine. In addition, our mechanism may help to improve advertisers' reputation and has advantage in raising search engine's long-term balanced revenue and auction efficiency. Our conclusion is demonstrated by numerical simulation. References | Related Articles | Metrics

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How Fairness Preference Affects Open Innovation: A Research Based on Agent-Based Computational Economics MI Jie, LIN Run-hui 2015, 23 (12):  157-166.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.019 Abstract ( 1760 )   PDF (2360KB) ( 1560 )   Save In this paper, how innovators of different fairness preference types choose their innovation strategies with the method of Agent-based Computational Economics and EWA learning model is analyzed. Through giving the agents different types of fairness preference (narrow self-interest type, competitive preference type, difference aversion type and social welfare preference type), agents' choosing behaviors among four kinds of innovation strategies are observed, such as inside-out open innovation, outside-in open innovation, coupled open innovation and closed innovation. The results showed that when the innovators possess the characteristic of narrow self-interest, the number of innovators who choose the strategy of closed innovation is the same as that who choose the strategy of outside-in open innovation, and they are more than numbers who choose the strategies of inside-out open innovation and coupled open innovation. When the innovators possess competitive preference, the ones who choose the strategy of closed innovation are more than those who choose the strategy of outside-in open innovation. When the innovators possess the characteristic of difference aversion, the innovators who choose the strategy of inside-out open innovation will reduce, who choose the strategy of coupled open innovation will nearly disappear. When the type of innovators is social welfare preferences, the innovators who choose the strategy of closed innovation can increase. References | Related Articles | Metrics

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Airline Crew Pairing Model with Stochastic Disruptions LAN Bo-xiong, ZHANG Mi 2015, 23 (12):  167-176.  doi: 10.16381/j.cnki.issn1003-207x.2015.12.020 Abstract ( 1823 )   PDF (1015KB) ( 2730 )   Save The crew pairing problem is one of the fundamental elements in strategic planning of airline companies. So far, crew pairing is mostly modeled as a deterministic problem, not concerning about flight delays. However, the airline industry is currently under great pressure to improve its on-time performance, so researches on robust models and solutions are in great need. Based on the literature review, a robust crew pairing model with consideration of stochastic disruptions is proposed in this paper. A deeper analysis of interdependencies of flight delays is given first in order to model the problem more accurately. For the purpose of better evaluating the costs caused by flight delays, delay costs are distinguished into normal delay cost and cancel cost according to whether those delays would result in partial flights cancellation. Due to the complexity of the crew paring problem itself, as well as the stochastic and interdependent features of flight delays, it is highly difficult to find feasible or optimal solutions of the model. Therefore, a heuristic column generation algorithm is introduced in this paper, which is proved to be highly efficient. The computational test shows that problems of real-world size can be solved efficiently within reasonable time. Furthermore, simulations are given to compare performances of our model with traditional deterministic model under same disruptions, and the results show that our model could highly increase robustness of crew pairing process. References | Related Articles | Metrics