Mutual bootstrapping between language and analogical processing

Gentner, D. & Christie, S. (2010). Mutual bootstrapping between language and
analogical processing. Language and Cognition, 2(2). 261-283.
Mutual bootstrapping between language and
analogical processing
DEDRE GENTNER AND STELL A CHRISTIE
Northwestern University
$EVWUDFW
:KDW PDNHV XV VR VPDUW DV D VSHFLHV DQG ZKDW PDNHV FKLOGUHQ VXFK UDSLG
OHDUQHUV":HDUJXHWKDWWKHDQVZHUWRERWKTXHVWLRQVOLHVLQDPXWXDOERRW
VWUDSSLQJV\VWHPFRPSULVHGRIRXUH[FHSWLRQDOFDSDFLW\IRUUHODWLRQDOFRJ
QLWLRQDQGV\PEROLFV\VWHPVWKDWDXJPHQWWKLVFDSDFLW\7KHDELOLW\WRFDUU\
RXW VWUXFWXUHPDSSLQJ SURFHVVHV RI DOLJQPHQW DQG LQIHUHQFH LV LQKHUHQW LQ
KXPDQFRJQLWLRQ,WLVDUJXDEO\WKHNH\LQKHUHQWGLIIHUHQFHEHWZHHQKXPDQV
DQGRWKHUJUHDWDSHV%XWDQHTXDOO\LPSRUWDQWGLIIHUHQFHLVWKDWKXPDQVSRV
VHVVDV\PEROLFODQJXDJH
7KHDFTXLVLWLRQRIODQJXDJHLQÀXHQFHVFRJQLWLYHGHYHORSPHQWLQPDQ\ZD\V
:HIRFXVKHUHRQWKHUROHRIODQJXDJHLQDPXWXDOO\IDFLOLWDWLQJSDUWQHUVKLS
ZLWKUHODWLRQDOUHSUHVHQWDWLRQDQGUHDVRQLQJ:HVXJJHVWDSRVLWLYHIHHGEDFN
UHODWLRQ LQ ZKLFK VWUXFWXUDO DOLJQPHQW SURFHVVHV VXSSRUW WKH DFTXLVLWLRQ RI
ODQJXDJH DQG LQ WXUQ ODQJXDJH࣠²࣠HVSHFLDOO\ UHODWLRQDO ODQJXDJH࣠²࣠VXSSRUWV
VWUXFWXUDODOLJQPHQWDQGUHDVRQLQJ
:H UHYLHZ WKUHH NLQGV RI HYLGHQFH D HYLGHQFH WKDW DQDORJLFDO SURFHVVHV
VXSSRUW FKLOGUHQ¶V OHDUQLQJ LQ D YDULHW\ RI GRPDLQV ࣠E PRUH VSHFL¿FDOO\
HYLGHQFH WKDW DQDORJLFDO SURFHVVLQJ IRVWHUV WKH DFTXLVLWLRQ RI ODQJXDJH
HVSHFLDOO\ UHODWLRQDO ODQJXDJH DQG F LQ WKH RWKHU GLUHFWLRQ HYLGHQFH WKDW
DFTXLULQJ ODQJXDJH IRVWHUV FKLOGUHQ¶V DELOLW\ WR SURFHVV DQDORJLHV IRFXVLQJ
RQVSDWLDOODQJXDJHDQGVSDWLDODQDORJLHV:HFRQFOXGHZLWKDQDQDO\VLVRI
WKH DFTXLVLWLRQ RI FDUGLQDOLW\࣠²࣠ZKLFK ZH RIIHU DV D FDQRQLFDO FDVH RI KRZ
WKH FRPELQDWLRQ RI ODQJXDJH DQG DQDORJLFDO SURFHVVLQJ IRVWHUV FRJQLWLYH
GHYHORSPHQW
&
RUUHVSRQGHQFH DGGUHVV 'HGUH *HQWQHU 'HSDUWPHQW RI 3V\FKRORJ\ 1RUWKZHVWHUQ 8QL
YHUVLW\ 6KHULGDQ 5RDG 6ZLIW +DOO (YDQVWRQ ,/ 86$ (PDLO JHQWQHU#
QRUWKZHVWHUQHGX7KLVUHVHDUFKZDVVXSSRUWHGE\16)JUDQW6%(WKH6SDWLDO,QWHO
OLJHQFHDQG/HDUQLQJ&HQWHU6,/&
/DQJXDJHDQG&RJQLWLRQ±±
'2,/ /$1*&2*
±//±௘
‹:DOWHUGH*UX\WHU
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
'*HQWQHUDQG6&KULVWLH
.H\ZRUGV
ODQJXDJHDQGFRJQLWLRQDQDORJ\UHODWLRQDOODQJXDJHDQDORJLFDOSURFHVVLQJ
,QWURGXFWLRQ
+XPDQV DUH SURGLJLRXV OHDUQHUV 0RUH WKDQ DQ\ RWKHU IHDWXUH RXU DELOLW\ WR
OHDUQ DQG DGDSW WR GLIIHUHQW FLUFXPVWDQFHV ZLWKLQ WKH VDPH JHQRPH GLVWLQ
JXLVKHV XV IURP RWKHU VSHFLHV 6RPH RI RXU FRJQLWLYH SURZHVV VWHPV IURP
DELOLWLHVVKDUHGZLWKRWKHUVSHFLHVVXFKDVDVVRFLDWLYHOHDUQLQJ%XWLQPDQ\
DVSHFWVRILQWHOOLJHQFH௘²௘VXFKDVWKHDELOLW\WROHDUQDQGXVHDEVWUDFWLRQVDQG
WRJHQHUDOL]HWKHPIURPSDUWLFXODUV௘²௘ZHVHHPWREHSDUDJRQV,QSDUWLFXODU
ZHH[FHODWWKHDELOLW\WRHQJDJHLQUHODWLRQDOPDWFKLQJDQGUHDVRQLQJHYHQ
FRPSDUHGWRRWKHULQWHOOLJHQWVSHFLHV*HQWQHU3HQQHWDO3UHPDFN
2XU ODQJXDJH DELOLWLHV DUH HTXDOO\ RXWVWDQGLQJ )RU H[DPSOH ZH DUH
DEOHWROHDUQDUELWUDU\V\PEROVLQFOXGLQJV\PEROVIRUDEVWUDFWLRQVDQGUHFXU
VLYHV\PEROVVXFKDVWKHVHWRIDOOVHWV&UXFLDOO\ZHDUHDEOHWRLQYHQWDQG
OHDUQWHUPVIRUUHODWLRQVDVZHOODVWKLQJV
7KH =HLWJHLVW RYHU WKH SDVW VHYHUDO GHFDGHV KDV EHHQ WKDW WKHVH FRP
SHWHQFLHV௘²௘ODQJXDJH DQG FRJQLWLRQ௘²௘DUH VHSDUDWH V\VWHPV +RZHYHU LQ
UHFHQW\HDUV:KRUI¶VFODLPWKDWWKHODQJXDJHZHVSHDNLQÀXHQFHVWKH
ZD\ZHWKLQNKDVDJDLQDWWUDFWHGDWWHQWLRQVHH*HQWQHUDQG*ROGLQ0HDGRZ
*XPSHU]DQG/HYLQVRQ/HYLQVRQDIWHUGHFDGHVRILOOIDYRU
7KHH[WUHPH:KRU¿DQK\SRWKHVLVWKDWODQJXDJHGHWHUPLQHVDVSHDNHU¶VSHU
FHSWLRQRIWKHZRUOGKDVJLYHQZD\WRPRUHFRQVWUDLQHGYHUVLRQVRIWKHTXHV
WLRQ DV GHVFULEHG EHORZ ,Q DGGLWLRQ WR DVNLQJ ZKHWKHU DGXOW VSHDNHUV RI
GLIIHUHQWODQJXDJHVWKLQNGLIIHUHQWO\UHVHDUFKLVDOVRDGGUHVVLQJHIIHFWVRIODQ
JXDJHZLWKLQDODQJXDJHGXULQJFRJQLWLYHGHYHORSPHQWLQFKLOGUHQDQGDGXOWV௘²௘
RXUPDLQFRQFHUQKHUH
,QWKLVSDSHUZHGHYHORSWKUHHFODLPVDVWRµZK\ZH¶UHVRVPDUW¶7KH¿UVWLV
WKDWDQDORJLFDOSURFHVVHVFRQWULEXWHLQVSHFL¿FZD\VWRFRJQLWLYHGHYHORSPHQW
7KHVHFRQGFODLPLVWKDWSRVVHVVLQJDKXPDQODQJXDJH௘²௘HVSHFLDOO\UHODWLRQDO
ODQJXDJH௘²௘VXEVWDQWLDOO\DXJPHQWVRXUUHODWLRQDODELOLW\7KHWKLUGLVWKDWUHOD
WLRQDODELOLW\LVFUXFLDOO\LQYROYHGLQODQJXDJHOHDUQLQJHVSHFLDOO\LQOHDUQLQJ
UHODWLRQDOWHUPVDQGJUDPPDWLFDOFRQVWUXFWLRQV7KLVUHVXOWVLQDSRVLWLYHIHHG
:KRUIKLPVHOIDOVRFRQVLGHUHGPRUHFRQVWUDLQHGYHUVLRQVRIWKHODQJXDJHDQGWKRXJKW$ORQJ
ZLWKKLVVWURQJHUFRQMHFWXUHVDERXWWKHUROHRIODQJXDJHLQWKRXJKW:KRUIDOVR
ZURWH³0\RZQVWXGLHVVXJJHVWWRPHWKDWODQJXDJHIRUDOOLWVNLQJO\UROHLVLQVRPHVHQVH
DVXSHU¿FLDOHPEURLGHU\XSRQGHHSHUSURFHVVHVRIFRQVFLRXVQHVVZKLFKDUHQHFHVVDU\EHIRUH
DQ\FRPPXQLFDWLRQVLJQDOLQJRUV\PEROLVPZKDWVRHYHUFDQRFFXU´
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
0XWXDOERRWVWUDSSLQJEHWZHHQODQJXDJHDQGDQDORJLFDOSURFHVVLQJ EDFNV\VWHPRXUUHODWLRQDODELOLW\SHUPLWVXVWROHDUQODQJXDJHDQGWKHDFTXL
VLWLRQRIODQJXDJHDXJPHQWVRXUUHODWLRQDODELOLW\
2XU YLHZ LV WKDW ODQJXDJH SURYLGHV WRROV IRU FRJQLWLRQ$FFRUGLQJ WR WKLV
YLHZGXEEHGWKHODQJXDJHDVFRJQLWLYHWRRONLWYLHZE\*HQWQHUDQG*ROGLQ
0HDGRZODQJXDJHSURYLGHVQHZUHSUHVHQWDWLRQDOUHVRXUFHVWKDWDXJ
PHQWKXPDQFRJQLWLYHFDSDFLWLHVEXWLWGRHVQRWUHSODFHRWKHUHQFRGLQJIRU
PDWV *HQWQHU *HQWQHU DQG *ROGLQ0HDGRZ /RHZHQVWHLQ DQG
*HQWQHUVHHDOVR)UDQNHWDO:ROIIDQG+ROPHVLQSUHVV2XU
DVVXPSWLRQLVWKDWKXPDQVDUHSOXUDOLVWLFWKLQNHUVDQGRWKHUPRGHVRIWKRXJKW
VXFKDVVSDWLDOLPDJHU\RUTXDOLWDWLYHHVWLPDWLRQFRH[LVWZLWKRXUOLQJXLVWLFDOO\
LQÀXHQFHGWKLQNLQJ7KXVWKHWRRONLWYLHZVKRXOGEHGLVWLQJXLVKHGIURPWKH
VWURQJOLQJXLVWLFGHWHUPLQLVPYLHZRIWHQDWWULEXWHGWR:KRUI:HDOVRGRQRW
DVVXPH WKDW DOO WKLQNLQJ LV GRQH E\ LQWHUQDO VSHHFK 1RQHWKHOHVV ODQJXDJH
SOD\VDODUJHUROHLQRXUDFFRXQWRIKXPDQFRJQLWLRQ
2XUFHQWUDOFODLPLVWKDWODQJXDJHLQYLWHVDQGPDNHVDFFHVVLEOHUHSUHVHQWD
WLRQVWKDWFDQWKHQEHXVHGPRUHJHQHUDOO\ZLWKRUZLWKRXWWKHFRQVFLRXVXVH
RILQWHUQDOODQJXDJH7KLVSRVLWLRQGUDZVRQERWK:KRUIDQG9\JRWVN\
DVZHOODVRQPRUHUHFHQWDFFRXQWV%RURGLWVN\*XPSHU]DQG
/HYLQVRQ +XQW DQG $JQROL 6ORELQ ,W LV FRQVLVWHQW ZLWK
&DUH\¶VSURSRVDOWKDWDQLPSRUWDQWIDFWRULQFRJQLWLYHGHYHORSPHQWLV
WKDWFKLOGUHQDFTXLUH³WRROVRIZLGHDSSOLFDWLRQ´WKDWIDFLOLWDWHIRUPLQJSDUWLF
XODUUHSUHVHQWDWLRQVDQGFDUU\LQJRXWSDUWLFXODUSURFHVVHV$SSOLHGWRFRJQLWLYH
GHYHORSPHQWWKHWRRONLWYLHZSUHGLFWVWKDWDFTXLULQJODQJXDJHFDQLQÀXHQFH
FKLOGUHQ¶VDELOLW\WRUHSUHVHQWDQGUHDVRQ
:H¿UVWUHYLHZDQDORJLFDOSURFHVVLQJLQFOXGLQJLWVUROHLQOHDUQLQJ7KHQ
ZHGHVFULEHVRPHLPSRUWDQWZD\VLQZKLFKDQDORJLFDOSURFHVVLQJHQWHUVLQWR
ODQJXDJHOHDUQLQJHVSHFLDOO\WKHDFTXLVLWLRQRIUHODWLRQDOODQJXDJH7KHQZH
WXUQWDEOHVDQGGLVFXVVKRZODQJXDJHSURPRWHVDQGVXSSRUWVDQDORJLFDOSUR
FHVVLQJ )LQDOO\ ZH GLVFXVV D FDVH LQ ZKLFK DQDORJ\ DQG ODQJXDJH ZRUN LQ
FORVHWDQGHP௘²௘QDPHO\WKHDFTXLVLWLRQRIQXPEHUZRUGVDQGWKHLGHDRIFDUGL
QDOQXPEHU
+RZDQDORJLFDOSURFHVVLQJIRVWHUVOHDUQLQJ
$FFRUGLQJ WR VWUXFWXUHPDSSLQJ WKHRU\ *HQWQHU FRPSDULVRQ WDNHV
SODFH YLD D VWUXFWXUHPDSSLQJ SURFHVV WKDW ¿QGV D VWUXFWXUDO DOLJQPHQW EH
WZHHQWZRUHSUHVHQWHGVLWXDWLRQVDQGWKHQSURMHFWVLQIHUHQFHVFRQVLVWHQWZLWK
WKDWDOLJQPHQW7KHDOLJQPHQWSURFHVVLVJXLGHGE\DVHWRIWDFLWFRQVWUDLQWV
WKDWOHDGWRVWUXFWXUDOFRQVLVWHQF\DWKHUHPXVWEHRQHWRRQHFRUUHVSRQGHQFH
EHWZHHQ WKH PDSSHG HOHPHQWV LQ WKH WDUJHW DQG EDVH DQG E WKHUH PXVW EH
SDUDOOHOFRQQHFWLYLW\LHLIWZRSUHGLFDWHVFRUUHVSRQGWKHQWKHLUDUJXPHQWV
PXVW FRUUHVSRQG DV ZHOO$ FHQWUDO FKDUDFWHULVWLF RI DQDORJ\ DQG VLPLODULW\
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
'*HQWQHUDQG6&KULVWLH
FRPSDULVRQV LV V\VWHPDWLFLW\ D ELDV IRU LQWHUSUHWDWLRQV LQ ZKLFK WKH ORZHU
RUGHUPDWFKHVVXFKDVHYHQWVDUHFRQQHFWHGE\KLJKHURUGHUFRQVWUDLQLQJUH
ODWLRQVVXFKDVFDXVDORUPDWKHPDWLFDOUHODWLRQV7KHV\VWHPDWLFLW\SULQFLSOH
FDSWXUHVDWDFLWSUHIHUHQFHIRUFRKHUHQFHDQGSUHGLFWLYHSRZHU7KXVZKHQD
JLYHQDQDORJ\DIIRUGVPRUHWKDQRQHFRQVLVWHQWLQWHUSUHWDWLRQSHRSOHSUHIHU
WKHPRUHV\VWHPDWLFLQWHUSUHWDWLRQDOOHOVHEHLQJHTXDO&OHPHQWDQG*HQWQHU
)XUWKHULIJLYHQWZRH[DPSOHVWRFRPSDUHSHRSOHWHQGWRFKRRVHWKH
RQHZLWKGHHSHUFDXVDORUH[SODQDWRU\VWUXFWXUHDVWKHEDVHGRPDLQDQGXVHLW
WRVWUXFWXUHWKHOHVVV\VWHPDWLFFDVH%RZGOHDQG*HQWQHU$VDQDWXUDO
RXWFRPHRIWKHDOLJQPHQWSURFHVVFDQGLGDWHLQIHUHQFHVDUHSURMHFWHGIURPWKH
EDVHWRWKHWDUJHW7KHVHLQIHUHQFHVDUHSURSRVLWLRQVFRQQHFWHGWRWKHFRPPRQ
V\VWHPLQRQHDQDORJEXWQRW\HWSUHVHQWLQWKHRWKHU
$QDGYDQWDJHRIWKHV\VWHPDWLFLW\SUHIHUHQFHLVWKDWLWELDVHVLQWKHGLUHFWLRQ
RIGHHSVWUXFWXUDODOLJQPHQWVZLWKRXWWKHQHHGIRUDGYDQFHNQRZOHGJHRIWKH
SRLQWRIWKHFRPSDULVRQ$SURFHVVWKDWUHTXLUHVDGYDQFHNQRZOHGJHZRXOGEH
LPSODXVLEOHDVDQDFFRXQWRIGHYHORSPHQWDOOHDUQLQJ,QIDFWKRZHYHUVWUXF
WXUDODOLJQPHQWFDQEHUHDOL]HGZLWKDSURFHVVWKDWEHJLQVEOLQGDQGORFDODV
ORQJDVLWKDVDELDVIRUPDWFKLQJSUHGLFDWHVWKDWDUHUHODWLRQDOO\FRQQHFWHGRYHU
LQGHSHQGHQW PDWFKHV LH IRU V\VWHPDWLFLW\ LQ PDWFKLQJ )RU H[DPSOH WKH
6WUXFWXUH0DSSLQJ (QJLQH 60( XWLOL]HV DQ DOLJQPHQW SURFHVV WKDW EHJLQV
ZLWKSXUHO\ORFDOPDWFKHVDQGFXOPLQDWHVZLWKRQHRUDIHZGHHSVWUXFWXUDOO\
FRQVLVWHQWDOLJQPHQWV)DONHQKDLQHUHWDO)RUEXVHWDO
$FKLHYLQJDVWUXFWXUDODOLJQPHQWVHWVWKHVWDJHIRUIRXUNLQGVRIOHDUQLQJ
DEVWUDFWLRQ UHUHSUHVHQWDWLRQ LQIHUHQFHSURMHFWLRQ DQG GLIIHUHQFHERRVWLQJ
,Q DEVWUDFWLRQ WKH FRPPRQ V\VWHP UHVXOWLQJ IURP WKH DOLJQPHQW EHFRPHV
PRUHVDOLHQWDQGPRUHDYDLODEOHIRUIXWXUHXVH)LJXUHD*HQWQHU*LFN
DQG+RO\RDN0DUNPDQDQG*HQWQHUD1DP\DQG*HQWQHU,Q
UHUHSUHVHQWDWLRQWZRQRQLGHQWLFDOUHODWLRQVDUHUHUHSUHVHQWHGWRSHUPLWWKH
RYHUDOOPDWFK7KLVRFFXUVZKHQWKHUHLVUHDVRQWREHOLHYHWKDWDPDWFKLVSRV
VLEOHDQGWKDWWKHUHZRXOGEHDJUHDWHUDOLJQPHQWLIWKH\PDWFKHG*HQWQHUDQG
5DWWHUPDQQ <DQ HW DO ,QIHUHQFHSURMHFWLRQ RFFXUV ZKHQ RQH
PHPEHURIWKHSDLULVPRUHFRPSOHWHLQLWVVWUXFWXUHWKDQWKHRWKHULQWKLVFDVH
VSRQWDQHRXVFDQGLGDWHLQIHUHQFHVZLOOEHPDGHWKDWHQULFKWKHOHVVFRPSOHWH
LWHP)LJXUHE%RZGOHDQG*HQWQHU&OHPHQWDQG*HQWQHU)L
,QDGGLWLRQWRV\VWHPDWLFLW\WZRRWKHUFULWHULDHQWHULQWRWKHFKRLFHRIDQLQWHUSUHWDWLRQWKH
IDFWXDOFRUUHFWQHVVRUIDOVLW\RIWKHLQIHUHQFHVLQWKHWDUJHWDQGWKHFRQWH[WXDOUHOHYDQFHRI
WKHLQWHUSUHWDWLRQDQGLWVLQIHUHQFHV
$QDORJ\ LV DOVR D PDMRU FRQWULEXWRU WR DQRWKHU IRUP RI NQRZOHGJH FKDQJH QDPHO\
UHVWUXFWXULQJ௘²௘DOWHULQJWKHGRPDLQVWUXFWXUHRIRQHGRPDLQLQWHUPVRIWKHRWKHU7KLVLVDWUXH
FDVHRIFRQFHSWXDOFKDQJHLQ&DUH\¶VVHQVH+RZHYHUWUXHUHVWUXFWXULQJDOPRVWFHU
WDLQO\UHTXLUHVPRUHRWKHUSURFHVVHVLQDGGLWLRQWRDQDORJ\'XQEDU
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
0XWXDOERRWVWUDSSLQJEHWZHHQODQJXDJHDQGDQDORJLFDOSURFHVVLQJ )LJXUH &
RPSDULVRQDV6WUXFWXUHPDSSLQJD6WUXFWXUDODOLJQPHQWSURPRWHVDEVWUDFWLRQRI
FRPPRQVWUXFWXUHDQGKLJKOLJKWVDOLJQDEOHGLIIHUHQFHV࣠E6WUXFWXUDODOLJQPHQWVXS
SRUWVWKHSURMHFWLRQRIFDQGLGDWHLQIHUHQFHV
QDOO\ LQ GLIIHUHQFHERRVWLQJ DOLJQDEOH GLIIHUHQFHV௘²௘GLIIHUHQFHV WKDW RFFXS\
WKHVDPHUROHLQWKHWZRV\VWHPV௘²௘DUHKLJKOLJKWHG)LJXUHD*HQWQHUDQG
0DUNPDQ0DUNPDQDQG*HQWQHUE
,Q WKLV SDSHU ZH IRFXV RQ WKH ¿UVW WKUHH VXESURFHVVHV௘²௘DEVWUDFWLRQ UH
UHSUHVHQWDWLRQ DQG LQIHUHQFHSURMHFWLRQ௘²௘OHDYLQJ DVLGH GLIIHUHQFHERRVWLQJ
%HIRUH SUHVHQWLQJ HPSLULFDO HYLGHQFH ZH ¿UVW LOOXVWUDWH WKHVH WKUHH VXESUR
FHVVHVZLWKDQLOOXVWUDWLYHH[DPSOHFRPSDULVRQ
:DOOFRUSGLYHVWHGLWVHOIRI%HVW7LUHV
/LNHZLVH0DUWKDGLYRUFHG*HRUJH
6WXGHQWVSUHVHQWHGZLWKWKLVSDLUUHDGLO\IRUPDFRPPRQDEVWUDFWLRQ³%RWK
JRWULGRIVRPHWKLQJWKH\QRORQJHUZDQWHG´7RIRUPWKLVDEVWUDFWLRQUHTXLUHV
QRWRQO\DOLJQLQJWKHWZRVWDWHPHQWVEXWUHUHSUHVHQWLQJWKHUHODWLRQVWRDUULYH
DWWKHFRPPRQUHODWLRQJRWULGRIVRPHWKLQJWKH\QRORQJHUZDQWHG7KLVNLQG
RIUHUHSUHVHQWDWLRQYLDPLQLPDODVFHQVLRQWRDFRPPRQUHODWLRQDOVXSHURUGL
QDWHLVFRPPRQLQDQDORJLFDODEVWUDFWLRQ
7RREVHUYHWKHDQDORJLFDOLQIHUHQFHSURFHVVZHWKHQJLYHDELWPRUHLQIRU
PDWLRQDERXWWKHEDVHVLWXDWLRQ:DOFRUS
:DOOFRUSGLYHVWHGLWVHOIRI%HVW7LUHVDQGERXJKWDPRUHSUR¿WDEOHWLUH
FRPSDQ\
/LNHZLVH0DUWKDGLYRUFHG*HRUJHDQG
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
'*HQWQHUDQG6&KULVWLH
6WXGHQWVDOPRVWDOZD\VLQIHUWKDW0DUWKDPDUULHGDQHZKXVEDQGZKRLVULFKHU
PRUHKDQGVRPHRUPRUHSRZHUIXOWKDQWKHSUHYLRXVRQH1RWHWKDWWKH\GRQ¶W
LQIHUWKDWVKHERXJKWDWLUHFRPSDQ\WKHLULQIHUHQFHVDUHVWUXFWXUDOO\JRYHUQHG
7KDWLVZKDWLVSURMHFWHGLVQRWDVSHFL¿FIDFW௘ERXJKWDWLUHFRPSDQ\DIWHU
VHOOLQJDQRWKHUEXWUDWKHUWKHUHODWLRQRIUHSODFLQJVRPHWKLQJDWLUHFRPSDQ\
RUDKXVEDQGZLWKDPRUHSUR¿WDEOHRUEHWWHULQVWDQFHRIWKHVDPHFDWHJRU\
7KLVLVEHFDXVHLQIHUHQFHSURMHFWLRQOLNHRWKHUDQDORJLFDOSURFHVVHVSUHVHUYHV
UHODWLRQVLQVRIDUDVSRVVLEOHEXWVXEVWLWXWHVFRUUHVSRQGLQJREMHFWV6LQFHWKH
FXUUHQWWLUHFRPSDQ\FRUUHVSRQGVWRWKHFXUUHQWKXVEDQGWKHLQIHUHQFHLVWKDW
WKHFXUUHQWKXVEDQGZDVUHSODFHGE\DPRUHSUR¿WDEOHPHPEHURIWKHKXVEDQG
FDWHJRU\0RVWSHRSOHJLYHQWKLVDQDORJ\UHUHSUHVHQWWKHPRUHSUR¿WDEOHWKDQ
UHODWLRQDVEHWWHUWKDQZKLFKWKH\WKHQPD\IXUWKHUVSHFLI\WR¿WWKHWDUJHWHJ
³VRPHRQHULFKHURUKDQGVRPHU´
$V WKLV H[DPSOH VXJJHVWV DGXOWV FDQ UHDGLO\ H[WUDFW FRPPRQ UHODWLRQDO
VWUXFWXUHIURPDFRPSDULVRQDQGGUDZIXUWKHULQIHUHQFHVHYHQZKHQWKHPDWFK
UHTXLUHV VRPH UHUHSUHVHQWDWLRQ :H KDYH IRXQG WKDW FRPSDULVRQ FDQ IRVWHU
DEVWUDFWLRQDQGDGHJUHHRIUHUHSUHVHQWDWLRQLQFKLOGUHQ$VZHZLOOGLVFXVV
PDQ\ VWXGLHV EHDU RXW WKH FODLP WKDW FRPSDULVRQ PDNHV FRPPRQ UHODWLRQDO
VWUXFWXUH PRUH VDOLHQW WR FKLOGUHQ +RZHYHU ZKHQ FRQVLGHULQJ FKLOGUHQ¶V
OHDUQLQJZHQHHGWRWDNHVHULRXVO\WKHIDFWWKDW\RXQJFKLOGUHQGRQRWKDYH
DQ\WKLQJFORVHWRDFRPSOHWHVWRFNRIUHODWLRQDONQRZOHGJH7KXVWKH\DUHRIWHQ
XQDEOH WR PDNH SXUHO\ UHODWLRQDO PDSSLQJV /HIW WR WKHLU RZQ GHYLFHV SUH
VFKRROFKLOGUHQRIWHQIRFXVRQREMHFWFRPPRQDOLWLHVDIWHUDOOWKH\RIWHQKDYH
JRRGNQRZOHGJHRIKRZWKLQJVORRN)RUH[DPSOHD\HDUROGDVNHG³+RZLV
D SODQW VWHP OLNH D GULQNLQJ VWUDZ´ UHVSRQGV ³%RWK DUH ORQJ DQG WKLQ´ DQG
UHMHFWV WKH UHVSRQVH ZKHQ RIIHUHG LQ D TXL] VKRZ IRUPDW WKDW ³%RWK EULQJ
ZDWHU WR VRPHWKLQJ WKDW QHHGV LW´ *HQWQHU $ \HDUROG LQ FRQWUDVW
SUHIHUVWKHUHODWLRQDOPDWFKRYHUWKHPDWFKLQREMHFWSURSHUWLHV௘²௘DFKDQJHWKDW
*HQWQHUWHUPHGWKHUHODWLRQDOVKLIW࣠
$W ¿UVW JODQFH WKH DERYH GLVFXVVLRQ VHHPV WR OHDG WR WKH FRQFOXVLRQ WKDW
VWUXFWXUDODOLJQPHQWFDQRFFXURQO\DIWHUFKLOGUHQKDYHPDVWHUHGWKHUHOHYDQW
UHODWLRQV௘²௘DFRQFOXVLRQWKDWZRXOGODUJHO\REYLDWHLWVYDOXHLQHDUO\OHDUQLQJ
+RZHYHUWKHUHLVDWHFKQLTXHWKDWFDQERRWVWUDSFKLOGUHQ¶VUHODWLRQDOHQFRGLQJ
LQ D GRPDLQ QDPHO\ SURJUHVVLYH DOLJQPHQW ,Q SURJUHVVLYH DOLJQPHQW FKLO
GUHQDUH¿UVWJLYHQFORVHFRQFUHWHFRPSDULVRQVDQGWKHQJLYHQPRUHDEVWUDFW
SXUHO\UHODWLRQDOFRPSDULVRQVLQYROYLQJWKHVDPHUHODWLRQDOVWUXFWXUH.RWR
YVN\DQG*HQWQHU,QDFORVHVLPLODULW\FRPSDULVRQWKHREMHFWPDWFKHV௘²௘
7KLVVKLIWPD\EHGXHLQSDUWWRLQFUHDVHVLQSURFHVVLQJFDSDFLW\+DOIRUGRULQH[HFX
WLYHIXQFWLRQ5LFKODQGHWDOKRZHYHUZHPDLQWDLQWKDWDPDMRUFDXVHRIWKHVKLIWLV
LQFUHDVHVLQUHODWLRQDONQRZOHGJHLQFOXGLQJWKDWJDLQHGWKURXJKODQJXDJH*HQWQHUDQG5DW
WHUPDQQ
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
0XWXDOERRWVWUDSSLQJEHWZHHQODQJXDJHDQGDQDORJLFDOSURFHVVLQJ ZKLFKDUHHDV\IRUWKHFKLOGWRJUDVS௘²௘VXSSRUWWKHFRUUHFWVWUXFWXUDODOLJQPHQW
%HFDXVHWKHVWUXFWXUHPDSSLQJSURFHVVIDYRUVFRPPRQUHODWLRQVDFKLHYLQJD
VWUXFWXUDODOLJQPHQW௘²௘HYHQEHWZHHQDKLJKO\VLPLODUSDLU௘²௘ZLOOLQFUHDVHWKH
VDOLHQFHRIWKHFRPPRQUHODWLRQDOVWUXFWXUHVRPHZKDW7KLVLQWXUQLQFUHDVHV
WKHOLNHOLKRRGWKDWWKHFKLOGZLOOVXEVHTXHQWO\EHDEOHWRDOLJQWKHHDUO\H[DP
SOHVZLWKDIXUWKHUOHVVVXUIDFHVLPLODULQVWDQFHRIWKHVDPHUHODWLRQDOVWUXF
WXUH0DQ\VWXGLHVKDYHERUQHRXWWKHVHSUHGLFWLRQV*HQWQHUHWDOLQSUHVV
*HQWQHUHWDO.RWRYVN\DQG*HQWQHU/RHZHQVWHLQDQG*HQWQHU
1DP\DQG*HQWQHU7KRPSVRQDQG2SIHULQSUHVV:D[PDQDQG
.OLEDQRII:HH[HPSOLI\SURJUHVVLYHDOLJQPHQWEHORZ
:LWKWKHVHSUHOLPLQDULHVLQSODFHZHQRZWXUQWRDQDORJLFDOSURFHVVHVLQ
ODQJXDJH OHDUQLQJ 7R SUHYLHZ WKHUH LV LQFUHDVLQJ HYLGHQFH WKDW FRPSDULQJ
H[HPSODUVLVDQLPSRUWDQWSDUWRIWKHSURFHVVE\ZKLFKOHDUQHUVDUULYHDWZRUG
PHDQLQJV
+RZDQDORJLFDOSURFHVVLQJVXSSRUWVODQJXDJHOHDUQLQJ
&RPSDULVRQLQUHODWLRQDOOHDUQLQJ&RPSDULVRQDFURVVH[HPSODUVSOD\VDQLP
SRUWDQWUROHLQFKLOGUHQ¶VDFTXLVLWLRQRIZRUGPHDQLQJ&KLOGHUV*HQWQHU
DQG1DP\)RUH[DPSOH*HQWQHUDQG1DP\1DP\DQG*HQWQHU
IRXQGWKDWFKLOGUHQZHUHPRUHOLNHO\WRH[WHQGDQHZZRUGRQWKHEDVLV
RIFRQFHSWXDOFRPPRQDOLWLHVDVRSSRVHGWRSXUHO\SHUFHSWXDOFRPPRQDOLWLHV
ZKHQWKH\FRPSDUHGWZRLQVWDQFHVRIWKHVWDQGDUGWKDQZKHQWKH\VDZRQO\
RQH6HHDOVR/LXHWDO$VWULNLQJH[DPSOHRIWKHSRZHURIFRPSDULVRQ
FRPHV IURP D VWXG\ E\ &KULVWLH DQG *HQWQHU LQ SUHVV ZKR WDXJKW DQG
\HDUROGFKLOGUHQQDPHVIRUQRYHOVSDWLDOUHODWLRQVDQGDVNHGWKHPWRH[WHQG
WKHQDPHWRDQRWKHULQVWDQFH7KUHH\HDUROGVJLYHQRQHVWDQGDUGFKRVH
RIWKHWLPHRQWKHEDVLVRIPDWFKLQJREMHFWVGLVUHJDUGLQJWKHVSDWLDOFRQ¿JXUD
WLRQ7KRVH ZKR KDG FRPSDUHG WZR VWDQGDUGV FKRVH WKH PDWFKLQJ UHODWLRQDO
FRQ¿JXUDWLRQZLWKQHZREMHFWVRIWKHWLPH,QRWKHUZRUGVWKHFRP
SDULVRQJURXSZDVURXJKO\WLPHVPRUHOLNHO\WRFKRRVHRQWKHEDVLVRIUHOD
WLRQVDVZDVWKHVRORJURXS
&RPSDULVRQLVSDUWLFXODUO\HIIHFWLYHDWKLJKOLJKWLQJWKHUHODWLRQDOLQIRUPD
WLRQQHFHVVDU\IRUOHDUQLQJYHUEVDQGRWKHUUHODWLRQDOWHUPV&KLOGHUVLQSUHVV
&KLOGHUVDQG3DLN*HQWQHUDQG1DP\+DU\X,PDLDQG2NDGDLQ
SUHVV 3UXGHQ HW DO )RU H[DPSOH &KLOGHUV LQ SUHVV IRXQG WKDW 21
\HDUROGVZHUHEHWWHUDWOHDUQLQJQRYHOYHUEVLIWKH\FRPSDUHGPXOWLSOHLQ
VWDQFHVWKDWYDULHGLQWKHLUVSHFL¿FGHWDLOV:KHQ\RXQJFKLOGUHQDUHXQDEOHWR
DOLJQKLJKO\YDULDEOHH[HPSODUVSURJUHVVLYHDOLJQPHQWFDQKHOSWKHPOHDUQ
)RU H[DPSOH +DU\X HW DO LQ SUHVV IRXQG WKDW -DSDQHVH DQG \HDUROGV
ZHUHVXFFHVVIXOLQOHDUQLQJDQHZYHUEPHDQLQJIURPPXOWLSOHH[HPSODUVZKHQ
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
'*HQWQHUDQG6&KULVWLH
WKHHYHQWVDOOLQYROYHGVLPLODUREMHFWVPDNLQJWKHPKLJKO\DOLJQDEOHEXWOHVV
VXFFHVVIXOZKHQWKHHYHQWVLQYROYHGGLIIHUHQWORRNLQJREMHFWV
$VHFRQGVWXG\VKRZHGHIIHFWVRISURJUHVVLYHDOLJQPHQW7KHSURJUHVVLYH
DOLJQPHQWJURXSZDV¿UVWJLYHQIRXUWULDOVRIWKHYHUEZLWKKLJKO\VLPLODURE
MHFWVDQGWKHQIRXUWULDOVZLWKKLJKO\GLVVLPLODUREMHFWVWKHFRQWUROJURXSUH
FHLYHGDQHTXDOQXPEHUHLJKWWULDOVZLWKGLVVLPLODUREMHFWV$VH[SHFWHGWKH
SURJUHVVLYHDOLJQPHQWJURXSZDVPRUHVXFFHVVIXORQWKH¿UVWIRXUDOOVLPLODU
WULDOVWKDQZDVWKHFRQWUROJURXS%XWWKHLPSRUWDQW¿QGLQJFRQFHUQVWKHODVW
IRXUWULDOVLQZKLFKERWKJURXSVUHFHLYHGGLVVLPLODUREMHFWV7KHSURJUHVVLYH
DOLJQPHQW JURXS GLG IDU EHWWHU WKDQ WKH FRQWURO JURXS ZKHUHDV WKH FRQWURO
JURXSSHUIRUPHGDWFKDQFHWKURXJKRXWWKHSURJUHVVLYHDOLJQPHQWJURXS
ZDV FRUUHFW RQ WKH ODVW IRXU WULDOV 7KLV SDWWHUQ SDUDOOHOV ¿QGLQJV E\
*HQWQHUHWDOIRU\HDUROGV¶OHDUQLQJRIQHZERG\SDUWWHUPV
+RZODQJXDJHDXJPHQWVDQDORJLFDOSURFHVVLQJ
5HFHQWVWXGLHVKDYHIRXQGHYLGHQFHIRUDYDULHW\RIZD\VLQZKLFKODQJXDJH
PD\VXSSRUWFRQFHSWXDOOHDUQLQJDQGSURFHVVLQJ,QNHHSLQJZLWKRXUWKHPH
ZHIRFXVVSHFL¿FDOO\RQZD\VLQZKLFKODQJXDJHHQWHUVLQWRDQDORJLFDOSUR
FHVVLQJ :H VXJJHVW IRXU VSHFL¿F ZD\V LQ ZKLFK ODQJXDJH LQÀXHQFHV WKH
VWUXFWXUHPDSSLQJSURFHVV*HQWQHU*HQWQHUDQG/RHZHQVWHLQ
&RPPRQODEHOVLQYLWHFRPSDULVRQDQGDEVWUDFWLRQ%\JLYLQJWZRWKLQJV
WKHVDPHQDPHZHLQYLWHFKLOGUHQWRFRPSDUHWKHPWKHLPSOLFLWPHVVDJHLV
WKDWWKHWZRWKLQJVVKDUHVRPHFRPPRQDOLWLHVWKDWPDWWHU*HQWQHUDQG0H
GLQD*HQWQHUDQG1DP\&KULVWLHDQG*HQWQHULQSUHVV7KH
FRPPRQ V\VWHP WKDW UHVXOWV IURP WKLV FRPSDULVRQ ZLOO EH PRUH VDOLHQW WKDQ
EHIRUHDQGPD\IRUPWKHVHHGIRUDQHZFDWHJRU\*HQWQHUDQG1DP\
.RWRYVN\DQG*HQWQHU)XUWKHUWKHDEVWUDFWLRQSURFHVVRIWHQUHTXLUHV
VRPHUHUHSUHVHQWDWLRQRIWKHUHODWLRQVWRUHQGHUWKHPDSSOLFDEOHWRERWKVLWX
DWLRQV7KLVPRUHDEVWUDFWHQFRGLQJUHQGHUVWKHUHODWLRQPRUHSRUWDEOHWRRWKHU
FRQWH[WV
1DPLQJSURPRWHVUHL¿FDWLRQ$OLQJXLVWLFODEHOFRQIHUVVWDELOLW\RQWKHDE
VWUDFWLRQJDLQHGIURPDFRPSDULVRQPDNLQJLWPRUHOLNHO\WREHUHWDLQHGDQG
DFFHVVHGLQWKHIXWXUH*HQWQHU/XS\DQHWDO;X$QRWKHU
DGYDQWDJH RI UHL¿FDWLRQ EHVLGHV PHPRU\ DFFHVVLELOLW\ LV WKDW LW IDFLOLWDWHV
PDNLQJQHZDVVHUWLRQVDERXWWKDWDEVWUDFWLRQ$QDPHGUHODWLRQDOVFKHPDFDQ
VHUYHDVDQDUJXPHQWWRDKLJKHURUGHUSURSRVLWLRQ)RUH[DPSOHFRQVLGHUWKLV
VHQWHQFH IURP WKH 1HZ <RUN 7LPHV %RRN 5HYLHZ ³7KH HFRQRPLF DGYHUVLW\
FDXVHGE\GURXJKWVRUÀRRGVIDUH[FHHGVWKHGLUHFWLPSDFWRQWKHIRRGVXSSO\´
7KHHFRQRP\PDGHSRVVLEOHE\WKHUHODWLRQDOQRXQVDGYHUVLW\GURXJKWÀRRG
DQGLPSDFWDQGWKHKLJKHURUGHUFRQQHFWLQJUHODWLRQVFDXVHDQGH[FHHGPDNHV
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
0XWXDOERRWVWUDSSLQJEHWZHHQODQJXDJHDQGDQDORJLFDOSURFHVVLQJ LW SRVVLEOH WR VWDWH D FRPSOH[ HPEHGGHG SURSRVLWLRQ FRPSDFWO\ ([SUHVVLQJ
FRPSOH[ DVVHUWLRQV OLNH WKH DERYH ZRXOG EH SURKLELWLYHO\ DZNZDUG ZLWKRXW
VXFKUHODWLRQDOFRPSDFWLRQ
1DPLQJ SURPRWHV XQLIRUP UHODWLRQDO HQFRGLQJ 7KLV SRLQW LV UHODWHG WR
SRLQW௘²௘FRPSDULVRQDEVWUDFWLRQDQGUHUHSUHVHQWDWLRQ&RPPRQODEHOVLQ
YLWH FKLOGUHQ WR DEVWUDFW D UHODWLRQDO VWUXFWXUH DZD\ IURP WKH LQLWLDO FRQWH[W
DQGRIWHQWRUHUHSUHVHQWWKHLQLWLDOUHODWLRQVWRDUULYHDWDVOLJKWO\PRUHDE
VWUDFWUHODWLRQ6XFKDUHODWLRQZLOOEHPRUHZLGHO\DSSOLFDEOHWKDQWKHLQLWLDO
PRUHVSHFL¿FUHODWLRQVSRWHQWLDWLQJDPRUHXQLIRUPUHODWLRQDOYRFDEXODU\7KH
LGHD RI XQLIRUP UHODWLRQDO HQFRGLQJ LV DOVR UHODWHG WR SRLQW ௘²௘UHL¿FDWLRQ
7KHLGHDLVWKDWQDPLQJDUHODWLRQSURPRWHVLWVUHXVHDQGKDELWXDOXVHRID
JLYHQ UHODWLRQDO WHUP SURPRWHV HQFRGLQJ WKH UHODWLRQ LQ WKH VDPH PDQQHU LQ
GLIIHUHQWFRQWH[WV
:K\ GRHV XQLIRUP UHODWLRQDO HQFRGLQJ PDWWHU" :H WKHRUL]H WKDW LW LV D
GHWHUPLQDQWRIUHODWLRQDOWUDQVIHU)RUEXVHWDO5HODWLRQDOWUDQVIHU௘²௘
UHWULHYLQJ D SULRU VLWXDWLRQ WKDW VKDUHV UHODWLRQDO VWUXFWXUH ZLWK WKH FXUUHQW
VLWXDWLRQ௘²௘LV JHQHUDOO\ TXLWH SRRU FRPSDUHG WR UHWULHYDO EDVHG RQ VXUIDFH
PDWFKHVHYHQIRUDGXOWVZKRKDYHQRWURXEOHUHFRJQL]LQJWKHUHODWLRQDOPDWFK
ZKHQ ERWK LWHPV DUH SUHVHQW *HQWQHU HW DO *LFN DQG +RO\RDN 5RVV:HVXJJHVWWKDWWKLVLVLQSDUWEHFDXVHUHODWLRQDOLQIRUPDWLRQLV
W\SLFDOO\HQFRGHGLQDPRUHFRQWH[WGHSHQGHQWPDQQHUWKDQLVREMHFWLQIRUPD
WLRQ$VPXWKDQG*HQWQHU*HQWQHUF*HQWQHUDQG)UDQFH7R
WKHH[WHQWWKDWSHRSOHHQFRGHUHODWLRQVLQDXQLIRUPPDQQHUDFURVVPDQ\FRQ
WH[WVWKH\VKRXOGVKRZKLJKHUUHODWLRQDOUHWULHYDO,QGHHG)RUEXVHWDO
VSHFXODWHGWKDWRQHUHDVRQH[SHUWVVKRZEHWWHUUHODWLRQDOUHWULHYDOWKDQQRYLFHV
௘1RYLFNLVWKDWWKH\KDELWXDOO\XVHDVWDEOHV\VWHPRIFRQFHSWVDFTXLUHG
LQSDUWE\UHL¿FDWLRQRIWHFKQLFDOWHUPVLQWKHGRPDLQ7KLVXQLIRUPUHODWLRQDO
HQFRGLQJLQFUHDVHVWKHOLNHOLKRRGRIUHODWLRQDOUHPLQGLQJEHFDXVHLWLQFUHDVHV
WKHOLNHOLKRRGWKDWDQHZVLWXDWLRQZLOOEHFRQVWUXHGDFFRUGLQJWRWKHVDPHUH
ODWLRQDO VFKHPD DV SULRU H[SHULHQFHV7KH JURZWK RI WHFKQLFDO YRFDEXODU\ LV
WKXVERWKDV\PSWRPDQGDFDXVHRILQFUHDVLQJH[SHUWLVH
/LQJXLVWLF VWUXFWXUH LQYLWHV FRQFHSWXDO VWUXFWXUH 6\VWHPDWLF VWUXFWXUH LQ
WKH ODQJXDJH FDQ LQYLWH FRUUHVSRQGLQJO\ V\VWHPDWLF FRQFHSWXDO VWUXFWXUH
&DUH\/RHZHQVWHLQDQG*HQWQHU$VRQHLQVWDQFHOH[LFDO
FRQWUDVW PD\ VRPHWLPHV LQYLWH SDUDOOHO FRQFHSWXDO FRQWUDVW )RU H[DPSOH LQ
&DUH\DQG%DUWOHWW¶VIDVWPDSSLQJVWXG\FKLOGUHQZHUHVKRZQWZRRE
MHFWVDQGDVNHGWRJLYH³WKHFKURPLXPRQHQRWWKHUHGRQH´7KLVOLQJXLVWLF
FRQWUDVWLQYLWHVWKHLQIHUHQFHWKDWFKURPLXPDQGUHGEHORQJWRWKHVDPHFDWH
JRU\EXWDUHQRWLGHQWLFDO%HFDXVHRIWKHRQHWRRQHFRUUHVSRQGHQFHEHWZHHQ
REMHFWVDQGZRUGVWKLVVWUXFWXUHFDQEHPDSSHGWRWKHWZRREMHFWVSHUPLWW
LQJWKHFKLOGWRLQIHUZKLFKRQHLVWKHFKURPLXPRQHDQGDWOHDVWIRUVRPH
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
'*HQWQHUDQG6&KULVWLH
FKLOGUHQ ZKDW FKURPLXP PHDQV :H GLVFXVV WZR PRUH H[WHQVLYH H[DPSOHV
EHORZRQHIURPVSDWLDOODQJXDJHDQGRQHIURPQXPEHUODQJXDJHLOOXVWUDWLQJ
KRZODQJXDJHOHDUQLQJFDQGULYHFRQFHSWXDOOHDUQLQJ
7KHDERYHVXESURFHVVHVDUHQRWVSHFL¿FWRUHODWLRQDOODQJXDJHWKH\DSSO\WR
HQWLW\WHUPVDVZHOO)RUH[DPSOHFDOOLQJWKLQJVE\WKHVDPHQDPHOHDGVFKLO
GUHQWRFRFDWHJRUL]HWKHP6PLWKHWDO:D[PDQDQG0DUNRZ
DQG LQ DGXOW OHDUQLQJ /XS\DQ HW DO IRXQG WKDW FDWHJRULHV ODEHOHG E\
QRXQVZHUHOHDUQHGIDVWHUWKDQXQODEHOHGFDWHJRULHVHYHQWKRXJKWKHODEHOVGLG
QRW FRQYH\ DGGLWLRQDO LQIRUPDWLRQ ;X¶V VWXGLHV VXJJHVW IXUWKHU WKDW
OHDUQLQJ QDPHV IRU REMHFW FDWHJRULHV KHOSV LQIDQWV UHLI\ WKH FDWHJRULHV 6KH
¿QGVWKDWPRQWKROGVDUHEHWWHUDWNHHSLQJWUDFNRIWZRGLIIHUHQWNLQGVRI
REMHFWVHJDWUXFNYHUVXVDGXFNLIWKH\DOUHDG\KDYHQDPHVIRUWKHP
:HVXVSHFWWKDWWKHHIIHFWVRINQRZLQJOLQJXLVWLFODEHOVLVOLNHO\WREHHYHQ
JUHDWHUIRUUHODWLRQDOFRQFHSWVVXFKDVPRWLRQHYHQWVRUVSDWLDOUHODWLRQVWKDQ
IRU FRQFUHWH HQWLW\ FRQFHSWV VXFK DV REMHFW FDWHJRULHV EHFDXVH UHODWLRQDO
FRQFHSWV௘²௘ERWKYHUEVDQGQRPLQDOUHODWLRQVVXFKDVEURWKHU௘²௘DUHLQJHQHUDO
VORZHUWREHOHDUQHGE\FKLOGUHQDQGKDUGHUWRUHWDLQLQPHPRU\E\DGXOWVDV
FRPSDUHGWRHQWLW\FRQFHSWV*HQWQHU*HQWQHUDQG%RUR
GLWVN\ *ROLQNRII DQG +LUVK3DVHN +LUVK3DVHN DQG *ROLQNRII
7KXVWKH\KDYHPRUHWRJDLQIURPUHL¿FDWLRQ'XHWRVSDFHFRQVWUDLQWV
ZHZLOOQRWJRWKURXJKWKHHYLGHQFHKHUHH[FHSWWRQRWHWKDWWKHIXOOPHDQLQJV
RI QRPLQDO UHODWLRQDO FDWHJRULHV VXFK DVEURWKHU DUH DFTXLUHG UHODWLYHO\ ODWH
DQG DUH RIWHQ LQLWLDOO\ WDNHQ WR EH HQWLW\ FDWHJRULHV LH GH¿QHG E\ LQWULQVLF
SURSHUWLHV7KXVDIRXU\HDUROGPD\EHOLHYHWKDWEURWKHUPHDQVDER\ZLWK
IUHFNOHVDQGRQO\ODWHUJUDVSLWVUHODWLRQDOPHDQLQJ&ODUN2EVHUYLQJ
XVHVRIWKHWHUP³EURWKHU´RYHUWLPHSURYLGHVHYLGHQFHDJDLQVWWKHVLPSO\HQ
WLW\LQWHUSUHWDWLRQ)XUWKHULIWKHWHUPLVXVHGIRUWZRH[HPSODUVWKDWWKHFKLOG
LVDEOHWRFRPSDUHDVGLVFXVVHGEHORZWKLVFDQKHOSWKHFKLOGGLVFRYHUWKH
UHODWLRQDOLQWHUSUHWDWLRQ:HQH[WUHYLHZHYLGHQFHIRUWKHFODLPWKDWODQJXDJH
DXJPHQWVDQDORJLFDOSURFHVVLQJ
&RPSDULVRQDQGDEVWUDFWLRQ
7RSDUDSKUDVH5RJHU%URZQDFRPPRQODEHOLVDQLQYLWDWLRQWRFRP
SDUHWZRWKLQJV7KLVµLQYLWDWLRQWRFRPSDUH¶LVLPSRUWDQWLQFKLOGUHQ¶VOHDUQ
LQJ$VGLVFXVVHGDERYHFRPSDULVRQLVDJRRGZD\௘²௘LQVRPHFDVHVWKHRQO\
YLDEOHZD\௘²௘WRDUULYHDWDQHZUHODWLRQDODEVWUDFWLRQ%XW\RXQJFKLOGUHQGR
QRWVSRQWDQHRXVO\FRPSDUHWZRWKLQJVLQWKHDEVHQFHRIDFRPPRQODEHOXQ
OHVVWKHWZRWKLQJVORRNYHU\VLPLODUDQGRFFXULQFORVHMX[WDSRVLWLRQ7KXVD
\RXQJFKLOGZLOOVSRQWDQHRXVO\FRPSDUHDFKLFNHQZLWKDWXUNH\EXWZLWKRXW
WKHDLGRIDFRPPRQODEHOELUGWKHFKLOGPD\QRWVSRQWDQHRXVO\FRPSDUHHL
WKHURIWKHVHWRDURELQ%\JLYLQJWZRWKLQJVWKHVDPHQDPHZHLQYLWHFKLOGUHQ
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
0XWXDOERRWVWUDSSLQJEHWZHHQODQJXDJHDQGDQDORJLFDOSURFHVVLQJ WRFRPSDUHWKHPZKHWKHURUQRWWKH\ORRNDOLNHDQGZKHWKHURUQRWWKH\RFFXU
LQLPPHGLDWHMX[WDSRVLWLRQ*HQWQHUDQG0HGLQDUHIHUWRWKLVDVV\P
EROLFMX[WDSRVLWLRQ
$QH[DPSOHRIODQJXDJHDVDQLQYLWDWLRQWRFRPSDUHLVDVWXG\E\&DVDVROD
RQ LQIDQW OHDUQLQJ RI WKH VSDWLDO UHODWLRQDO WHUP RQ 7KH (QJOLVK RQ HQFRP
SDVVHVDUDQJHRIHYHQWVIURPD/HJRWLJKWO\¿WWHGRQWRSRIDQRWKHU/HJRWRD
OLWWOHGROOVWDQGLQJRQDWR\FDUHYHQWVWKDWZRXOGEHFODVVL¿HGDVWLJKW¿WDQG
ORRVH¿WUHVSHFWLYHO\LQ.RUHDQ%RZHUPDQDQG&KRLVHHDOVR*HQWQHU
DQG%RZHUPDQ$VWXG\E\&DVDVRODVKRZHGWKDWPRQWKROG
(QJOLVKVSHDNLQJLQIDQWVZHUHDEOHWRLQGXFHWKLVDEVWUDFWFDWHJRU\RIVXSSRUW
IURPGLVSDUDWHH[DPSOHVEXWRQO\ZKHQWKH\KHDUGWKHZRUGRQGXULQJKDELWX
DWLRQWULDOV,QIDQWVLQWKLVVWXG\ZHUHDOOKDELWXDWHGWRIRXUVXSSRUWHYHQWV௘²௘WZR
WLJKWVXSSRUWDQGWZRORRVHVXSSRUWHYHQWVDOOZLWKUDWKHUGLVVLPLODUREMHFWV
,QIDQWVWKHQYLHZHGIRXUWHVWHYHQWVLQVHTXHQFHIDPLOLDUREMHFWVLQWKHIDPLOLDU
RQUHODWLRQLHDUHSHDWRIDKDELWXDWLRQHYHQWQHZREMHFWVLQWKHIDPLOLDURQ
UHODWLRQ IDPLOLDU REMHFWV LQ D QHZ UHODWLRQ LQ௘²௘LH FRQWDLQPHQW DQG QHZ
REMHFWVLQDQHZUHODWLRQLQ7KHUHVXOWVZHUHVWULNLQJ,QIDQWVZKRKDGKHDUG
JHQHUDO ODQJXDJH ³/RRN DW WKDW´ GXULQJ KDELWXDWLRQ IDLOHG WR QRWLFH WKH
FKDQJHLQUHODWLRQVWKH\RQO\QRWLFHGDFKDQJHLQREMHFWV,QFRQWUDVWLQIDQWV
ZKRKDGKHDUGWKHVSDWLDOZRUGRQGXULQJKDELWXDWLRQORRNHGORQJHUDWHYHQWV
LQYROYLQJWKHQHZUHODWLRQLQZLWKERWKIDPLOLDUDQGQHZREMHFWVLQGLFDWLQJ
WKDWWKH\KDGIRUPHGDQDEVWUDFWUHSUHVHQWDWLRQRIWKHVXSSRUWUHODWLRQ:HVXJ
JHVW WKDW UHSHDWLQJ WKH WHUP RQ DFURVV WKH VWXG\ LWHPV LQYLWHG FRPSDULVRQ
ZKLFK IRVWHUHG WKH DEVWUDFWLRQ RI WKH VXSSRUW UHODWLRQ ,W PD\ DOVR KDYH LQ
YRNHG FKLOGUHQ¶V SULRU H[SHULHQFH ZLWK WKH WHUP FRQVLVWHQW ZLWK WKH VHFRQG
WKHPHUHL¿FDWLRQ
5HL¿FDWLRQ
/DEHOLQJDSDWWHUQRIUHODWLRQVZLWKDOLQJXLVWLFWHUPKHOSVWR¿[WKDWSDWWHUQLQ
PHPRU\PDNLQJLWPRUHDFFHVVLEOHLQPHPRU\DQGLQFUHDVLQJWKHOLNHOLKRRG
WKDWWKHOHDUQHUZLOOSHUFHLYHWKHSDWWHUQDJDLQDFURVVGLIIHUHQWFLUFXPVWDQFHV
7KHPRVWREYLRXVLQVWDQFHRIWKLVLQFUHDVHGDFFHVVLELOLW\LVWKDWDQDPHGSDW
WHUQFDQEHUHLQYRNHGE\XVLQJWKHQDPH)RUH[DPSOH6LPPVDQG*HQWQHU
KDYHIRXQGWKDWSUHVFKRROHUVDUHEHWWHUDEOHWRVROYHDµWUHDVXUHKXQW¶
VHDUFKWDVNZKHUHWKHUXOHLVWRORRNH[DFWO\EHWZHHQWZRODQGPDUNVLIWKH\DUH
UHPLQGHG RI WKH WHUP ³PLGGOH´ GXULQJ WKH WDVN $OWKRXJK ZH WDNH WKLV IRU
JUDQWHGLWLVZRUWKQRWLQJWKDWFDOOLQJIRUWKDFRQFHSWXDOVWUXFWXUHDWZLOOVLP
SO\E\XVLQJLWVQDPHLVDQHVVHQWLDODVSHFWRIWKHKXPDQSRZHUWRUHDVRQDERXW
WKH³WKHUHDQGWKHQ´LQVWHDGRIRQO\WKH³KHUHDQGQRZ´%XWOLQJXLVWLFODEHOV
KDYHHIIHFWVEH\RQGWKHLUGLUHFWXVHLQLQYRNLQJFRQFHSWVDVLOOXVWUDWHGE\WKH
IROORZLQJUHVXOWV
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
'*HQWQHUDQG6&KULVWLH
)LJXUH D7DVNXVHGLQ/RHZHQVWHLQDQG*HQWQHU࣠E7KHVHWRIWHUPVWRSPLGGOHERW
WRPFRQYH\VPRUHV\VWHPDWLFVWUXFWXUHWKDQVHWRIWHUPVRQLQXQGHU7KLVV\VWHPDWLF
VWUXFWXUHIDFLOLWDWHVPDSSLQJWKHFRUUHFWUHODWLRQDOPDWFKLQWDVND
5HFHQWHYLGHQFHIRUWKHEHQH¿WRIVSDWLDOUHODWLRQDOODQJXDJHZDVRIIHUHGE\
/RHZHQVWHLQDQG*HQWQHULQDVSDWLDOPDSSLQJVWXG\3UHVFKRROFKLO
GUHQ VDZ WZR LGHQWLFDO WKUHHWLHUHG ER[HV WKH\ ZDWFKHG WKH ³ZLQQHU´ EHLQJ
SODFHGLQRQHER[WKH+LGLQJER[DQGWKHQVHDUFKHGIRUWKHLURZQ³ZLQQHU´
ZKLFKZDVDOZD\VLQWKHVDPHUHODWLYHORFDWLRQLQWKH)LQGLQJER[VHH)LJXUH
D &KLOGUHQ SHUIRUPHG EHWWHU ZKHQ WKH +LGLQJ ER[ ZDV GHVFULEHG XVLQJ
VSDWLDOUHODWLRQDOWHUPVVXFKDVRQLQXQGHURUWRSPLGGOHERWWRP)RUH[
DPSOHLQRQHVWXG\WKHH[SHULPHQWHUEHJDQE\VD\LQJ³:H¶UHJRLQJWRSOD\
WKHRQLQXQGHUJDPH´DQGDVNHGWKHFKLOGWRSRLQWWRWKHWKUHHORFDWLRQVLQWKH
+LGLQJ ER[ 7KH FRQWURO JURXS VLPSO\ SRLQWHG EDFN DQG IRUWK EHWZHHQ WKH
ER[HVZLWKRXWKHDULQJDQ\VSHFL¿FVSDWLDOODQJXDJH7KHKLGHDQG¿QGWDVN
ZDVLGHQWLFDOIRUWKHWZRJURXSVWKHH[SHULPHQWHUWROGWKHFKLOGUHQWKDWWKH\
FRXOG¿QGWKHLUZLQQHU³LQWKHVDPHSODFH´DVWKH+LGLQJZLQQHU7KHQRQHDFK
WULDOVKHVLPSO\VDLG³,¶PSXWWLQJLWKHUH´DVVKHSODFHGWKHZLQQHULQWKH+LG
LQJER[
1RWRQO\GLGFKLOGUHQSHUIRUPEHWWHULQLWLDOO\ZKHQJLYHQVSDWLDOODQJXDJH
EXWWKH\UHWDLQHGWKHVSDWLDOSDWWHUQEHWWHU,QRQHVWXG\FKLOGUHQZHUHEURXJKW
EDFNWRWKHODEWZRWRIRXUGD\VDIWHUFRPSOHWLQJWKHVSDWLDOPDSSLQJWDVNDQG
ZHUH VKRZQ D VRPHZKDW DOWHUHG VHW RI ER[HV$OO FKLOGUHQ௘²௘ZKHWKHU LQ WKH
ODQJXDJHJURXSRUWKHFRQWUROJURXS௘²௘ZHUHVLPSO\DVNHGWR³SOD\WKHVDPH
JDPH DJDLQ´ &KLOGUHQ ZKR KDG LQLWLDOO\ UHFHLYHG UHODWLRQDO ODQJXDJH SHU
IRUPHGVLJQL¿FDQWO\EHWWHUWKDQWKRVHZKRKDGQRW/RHZHQVWHLQDQG*HQWQHU
VXJJHVWLQJWKDWKHDULQJWKHVSDWLDOUHODWLRQDOWHUPVQRWRQO\LQYLWHGFKLO
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
0XWXDOERRWVWUDSSLQJEHWZHHQODQJXDJHDQGDQDORJLFDOSURFHVVLQJ GUHQWRUHSUHVHQWWKHWZRER[HVLQDVSDWLDOO\GHOLQHDWHGZD\EXWKHOSHGWKHP
UHWDLQWKLVUHSUHVHQWDWLRQ
6WUXFWXUH/LQJXLVWLFVWUXFWXUHLQYLWHVFRUUHVSRQGLQJFRQFHSWXDO
VWUXFWXUH
$VMXVWUHYLHZHGDUHODWLRQDOWHUP௘²௘VXFKDVPLGGOHRURSSRVLWHRUSDUDOOHO௘²௘
FDQLQYLWHDWWHQWLRQWRDUHODWLRQDOFRQVWUXDORIDVLWXDWLRQUDWKHUWKDQWRWKH
REMHFWV௘²௘DFRQVWUXDOWKDWPD\EHDGYDQWDJHRXVIRUFHUWDLQSXUSRVHV2QHSDU
WLFXODUO\SRZHUIXONLQGRIUHODWLRQDOFRQVWUXDOLVDV\VWHPDWLFUHSUHVHQWDWLRQ
WKDWLVRQHLQZKLFKWKHORZHURUGHUUHODWLRQVDUHLQWHUFRQQHFWHGE\DKLJKHU
RUGHUFRQVWUDLQLQJUHODWLRQ:HLOOXVWUDWHWKLVE\UHWXUQLQJWRWKH/RHZHQVWHLQ
DQG*HQWQHUVWXG\GLVFXVVHGDERYHVHHDOVR*HQWQHUDQG5DWWHUPDQQ
5HFDOOWKDWFKLOGUHQSHUIRUPHGEHWWHUZKHQJLYHQVSDWLDOWHUPV௘²௘HLWKHU
WRSPLGGOHERWWRPRURQLQXQGHU௘²௘GHVFULELQJWKHWKUHHORFDWLRQV%XWWKHVH
WZRVHWVRIWHUPVGLIIHULQDQLPSRUWDQWZD\WRSPLGGOHERWWRPIRUPVDV\V
WHPDWLFVWUXFWXUHJRYHUQHGE\WKHKLJKHURUGHUUHODWLRQRIPRQRWRQLFLW\LQWKH
YHUWLFDOGLPHQVLRQLQFRQWUDVWRQLQDQGXQGHUHDFKGHVFULEHD¿JXUHJURXQG
UHODWLRQVHH)LJXUHE:KHQWKHER[PDSSLQJWDVNZDVPDGHPRUHGLI¿FXOW
E\ LQWURGXFLQJ D FRPSHWLQJ REMHFW PDWFK D FURVVPDSSLQJ *HQWQHU DQG
7RXSLQFKLOGUHQSHUIRUPHGIDUEHWWHUDWWKHVSDWLDOPDSSLQJWDVNZKHQ
JLYHQWKHWHUPVWRSPLGGOHERWWRPWKDQZKHQJLYHQWKHWHUPVRQLQXQGHU
ZKLFK ODFN D XQLI\LQJ KLJKHURUGHU VWUXFWXUH :H VXJJHVW WKDW KHDULQJ WRS
PLGGOH ERWWRP LQYLWHG D FRQFHSWXDO UHSUHVHQWDWLRQ RI WKH PRQRWRQLF VSDWLDO
UHODWLRQDO VWUXFWXUH RI WKH WZR ER[HV7KLV KLJKHURUGHU VWUXFWXUH KHOSHG WKH
FKLOGUHQWRUHVLVWWKHWHPSWLQJREMHFWPDWFKHVDQGDFKLHYHDUHODWLRQDOPDS
SLQJ+HUHWKHQLVDQH[DPSOHRIWKHFRQWULEXWLRQRIODQJXDJHWRDQDORJLFDO
SURFHVVLQJ
)LQDOO\ LI ODQJXDJH LQVWLOOV HQGXULQJ GHOLQHDWHG UHSUHVHQWDWLRQV RI VSDWLDO
UHODWLRQVWKHQZHZRXOGH[SHFWFKLOGUHQZKRODFNVXFKLQSXWWREHDWDGLVDG
YDQWDJHLQWDVNVUHTXLULQJWKHUHSUHVHQWDWLRQ8VLQJWKHVDPHVSDWLDOPDSSLQJ
SDUDGLJPWKHER[WDVNDUHFHQWVWXG\LQ,VWDQEXOFRPSDUHG\HDUROGFKLO
GUHQ ZKR ZHUH OHDUQLQJ 7XUNLVK DW D W\SLFDO UDWH ZLWK GHDI FKLOGUHQ ZKRVH
KHDULQJORVVHVKDGSUHYHQWHGWKHPIURPOHDUQLQJDVSRNHQODQJXDJHDQGZKR
KDG QRW EHHQ H[SRVHG WR D VLJQ ODQJXDJH 7KH GHDI FKLOGUHQ XVHG JHVWXUHV
FDOOHGKRPHVLJQVWRFRPPXQLFDWHZLWKWKHKHDULQJLQGLYLGXDOVLQWKHLUZRUOGV
,PSRUWDQWO\ DOWKRXJK KRPHVLJQ FRQWDLQV PDQ\ RI WKH OLQJXLVWLF SURSHUWLHV
IRXQG LQ HDUO\ FKLOG ODQJXDJH *ROGLQ0HDGRZ D WKH KRPHVLJQV LQ
YHQWHGE\7XUNLVKGHDIFKLOGUHQGRQRWFRQWDLQJHVWXUHVIRURURWKHUOLQJXLVWLF
PHDQV RI FRQYH\LQJ VSDWLDO UHODWLRQV *HQWQHU HW DO 7KH 7XUNLVK
VSHDNLQJKHDULQJFKLOGUHQZHUHPDWFKHGWRWKHKRPHVLJQLQJGHDIFKLOGUHQRQD
UHSUHVHQWDWLYHVSDWLDOFRJQLWLRQWDVNVSDWLDOWUDQVIRUPDWLRQDQGDOOFKLOGUHQ
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
'*HQWQHUDQG6&KULVWLH
ZHUHJLYHQWKHER[WDVNZLWKRXWVSDWLDOODQJXDJH7KHKHDULQJFKLOGUHQDOORI
ZKRPKDGDJRRGFRPPDQGRI7XUNLVKVSDWLDOWHUPVSHUIRUPHGIDUEHWWHURQ
WKHWDVNWKDQWKHGHDIFKLOGUHQ*HQWQHUHWDOVXJJHVWWKDWWKHGHDIFKLOGUHQ
ODFNLQJDVWDEOHV\VWHPRIWHUPVIRUVSDWLDOUHODWLRQVZHUHOHVVOLNHO\WRUHSUH
VHQWWKHDUUD\VLQWKHWZRER[HVLQDXQLIRUPZD\DQGWKHUHIRUHOHVVDEOHWR
DOLJQWKHP
:HKDYHUHYLHZHGHYLGHQFHIRUWKHPHFKDQLVPVGLVFXVVHGDERYHE\ZKLFK
ODQJXDJHLQÀXHQFHVFKLOGUHQ¶VFRJQLWLYHGHYHORSPHQWWKDWFRPPRQODEHOVLQ
YLWHFRPSDULVRQDQGDEVWUDFWLRQ*HQWQHUHWDOLQSUHVV*HQWQHUDQG1DP\
WKDWODEHOVFDQLQGXFHDVWDEOHHQGXULQJUHSUHVHQWDWLRQ&DVDVROD
/RHZHQVWHLQDQG*HQWQHUDQGWKDWVWUXFWXUHGODQJXDJHLQYLWHVDVWUXF
WXUHGUHSUHVHQWDWLRQ/RHZHQVWHLQDQG*HQWQHU0RVWRIWKHVHH[DPSOHV
KDYHFRPHIURPWKHGRPDLQRIVSDWLDOODQJXDJH1RZZHWXUQWRWKHGRPDLQRI
QXPEHUIRUDQH[DPSOHWKDWLOOXVWUDWHVKRZODQJXDJHDQGDQDORJLFDOSURFHVVLQJ
LQWHUDFWWRERRWVWUDSFRJQLWLYHGHYHORSPHQW
%RRWVWUDSSLQJQXPEHU
/DQJXDJHHQWHUVLQWRWKHXQGHUVWDQGLQJRIQXPEHU
,QWXLWLYHO\PDWKHPDWLFDOVWUXFWXUHVHHPVVRFRPSHOOLQJWKDWLWPXVWEHDQLQ
HYLWDEOHGLVFRYHU\RIKXPDQGHYHORSPHQW7KH)UHQFKPDWKHPDWLFLDQ&KDUOHV
+HUPLWHEHOLHYHG³WKDWWKHQXPEHUVDQGIXQFWLRQVRIDQDO\VLVDUHQRWWKHDUEL
WUDU\SURGXFWRIRXUVSLULWV,EHOLHYHWKDWWKH\H[LVWRXWVLGHRIXVZLWKWKHVDPH
FKDUDFWHURIQHFHVVLW\DVWKHREMHFWVRIREMHFWLYHUHDOLW\´TXRWHGLQ'H
KDHQHS<HWWKHUHLVHYLGHQFHWKDWHYHQVLPSOHQXPHULFDOLQVLJKWLV
QRWLQHYLWDEOHDQGWKDWODQJXDJHSOD\VDUROHLQVXSSRUWLQJQXPHULFDOFRJQL
WLRQ)RUH[DPSOH6SHONHDQG7VLYNLQIRXQGWKDW5XVVLDQ(QJOLVKELOLQ
JXDOVZKRZHUHWUDLQHGRQH[DFWFDOFXODWLRQSUREOHPVLQRQHODQJXDJHGHWHULR
UDWHGVKDUSO\ZKHQDVNHGWRGRVLPLODUSUREOHPVLQWKHLURWKHUODQJXDJH<HW
ZKHQWUDLQHGRQDSSUR[LPDWLRQSUREOHPVZKLFKSUHVXPDEO\GRQRWGHSHQGRQ
ODQJXDJHWKHELOLQJXDOVFRXOGUHDGLO\WUDQVIHUIURPRQHODQJXDJHWRWKHRWKHU
7KLVSDWWHUQOHG6SHONHDQG7VLYNLQWRVXJJHVWWKDWODQJXDJHLVLQVWUXPHQWDOLQ
WKHUHSUHVHQWDWLRQRIH[DFWQXPEHU
$QDFFRXQWRIWKHDFTXLVLWLRQRIQXPEHUPXVWEHJLQZLWKWZRSUHYHUEDOFD
SDFLWLHV WKDW KDYH EHHQ LPSOLFDWHG LQ DFFRXQWV RI QXPEHU GHYHORSPHQW WKH
DQDORJPDJQLWXGHV\VWHPDQGDQREMHFWWUDFNLQJV\VWHP7KHDQDORJPDJQL
WXGHV\VWHPDV\VWHPVKDUHGEURDGO\ZLWKRWKHUVSHFLHVDOORZVDSSUR[LPDWH
MXGJPHQWVRITXDQWLW\DQGLVRIWHQPRGHOHGZLWKDQDFFXPXODWRUPRGHO0HFN
DQG&KXUFK*DOOLVWHODQG*HOPDQ7KLVVNLOORSHUDWHVRYHUHYHQ
YHU\ODUJHTXDQWLWLHVEXWLWVDFFXUDF\LVOLPLWHGE\:HEHU¶V/DZWKHGLVFULP
LQDELOLW\EHWZHHQWZRDPRXQWVLVDIXQFWLRQRIWKHLUUDWLR7KXVLQDFFXUDFLHV
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
0XWXDOERRWVWUDSSLQJEHWZHHQODQJXDJHDQGDQDORJLFDOSURFHVVLQJ RFFXU IRU PDJQLWXGHV WKDW DUH YHU\ FORVH 7KH REMHFWWUDFNLQJ V\VWHP NHHSV
WUDFNRIVPDOOQXPEHUVRILWHPV,WLVSDUWRIRXUJHQHUDODELOLW\WRUHSUHVHQW
PHQWDOPRGHOVRIWKHZRUOG&DUH\6SHONH,QFRQWUDVWWRWKHDQD
ORJPDJQLWXGHV\VWHPWKHREMHFW¿OHV\VWHPRSHUDWHVRYHUGLVFUHWHUHSUHVHQWD
WLRQVDQGLVFDSDFLW\OLPLWHGWRURXJKO\WKUHHRUIRXUREMHFWV
'UDPDWLFHYLGHQFHWKDWQXPEHUODQJXDJHDXJPHQWVWKHVHSUHYHUEDOFDSDFL
WLHVFRPHVIURPVWXGLHVRIWZR$PD]RQLDQSHRSOHVZKRVHODQJXDJHV௘²௘3LUDKm
DQG 0XQGXUXN~௘²௘ODFN D IXOO FRXQWLQJ V\VWHP )UDQN HW DO *RUGRQ
3LFDHWDO,QKLVSLRQHHULQJVWXGLHV*RUGRQLQYHVWLJDWHG
WKH3LUDKmZKRVHODQJXDJHIRUQXPEHUVFDQEHGHVFULEHGDV³RQHWZRPDQ\´
*RUGRQ JDYH D YDULHW\ RI VLPSOH QXPHULFDO WDVNV WR 3LUDKm SDUWLFLSDQWV DQG
IRXQG VWULNLQJ IDLOXUHV HYHQ RQ DSSDUHQWO\ VLPSOH WDVNV )RU H[DPSOH SDU
WLFLSDQWVZHUHVKRZQDQDUUD\RIQXWVIRUVHFRQGVDIWHUZKLFKWKHQXWVZHUH
SXWLQWRDFDQ7KHQWKHH[SHULPHQWHUWRRNRXWWKHQXWVRQHE\RQHHDFKWLPH
DVNLQJSDUWLFLSDQWVZKHWKHUWKHFDQVWLOOFRQWDLQHGQXWVRUZDVHPSW\7KH3L
UDKm ZHUH IDLUO\ DFFXUDWH IRU DPRXQWV RI WKUHH RU IHZHU EXW ZHUH RQO\ DS
SUR[LPDWHO\FRUUHFWIRUODUJHQXPEHUV*RUGRQ7KLVEDVLFSDWWHUQZDV
UHSOLFDWHGE\)UDQNHWDOZRUNLQJZLWKWKH3LUDKmDQGE\3LFDHWDO
ZRUNLQJZLWKWKH0XQGXUXN~$OOWKUHHRIWKHVHVWXGLHVIRXQGJUHDWHU
LQDFFXUDFLHVIRUODUJHUQXPEHUV௘²௘DVLJQDWXUHRIWKHDQDORJPDJQLWXGHV\VWHP
3LFDHWDODOVRFRPSDUHG)UHQFKVSHDNHUVZLWK0XQGXUXN~VSHDNHUVRQDVHW
RIQXPHULFDOWDVNVDQGIRXQGWKDWWKH0XQGXUXN~ZHUHFRPSDUDEOHWR)UHQFK
VSHDNHUVRQQXPHULFDOHVWLPDWLRQWDVNVEXWJUHDWO\GH¿FLHQWRQWDVNVWKDWUH
TXLUHH[DFWQXPEHUVEH\RQGWZRRUWKUHH,WDSSHDUVWKDWODQJXDJHSURIRXQGO\
LQÀXHQFHVQXPHULFDOFRJQLWLRQFRQVLVWHQWZLWKWKHWRRONLWDFFRXQW+RZHYHU
DQGDJDLQFRQVLVWHQWZLWKWKHWRRONLWDFFRXQWODQJXDJHGRHVQRWUHSODFHWKH
SUHYHUEDOFDSDFLW\IRUPDJQLWXGHHVWLPDWLRQVHHDOVR)UDQNHWDO
$PRPHQWRXVDQDORJ\/HDUQLQJWKHOLQJXLVWLFFRXQWOLVWLQYLWHV
FRUUHVSRQGLQJQXPHULFDOVWUXFWXUH
:KDWDUHWKHPHFKDQLVPVE\ZKLFKODQJXDJHPLJKWLQÀXHQFHGHYHORSPHQWRI
QXPEHU"2QHIDVFLQDWLQJSRVVLELOLW\LVWKDWWKHRUGHUHGFRXQWLQJURXWLQHVHUYHV
DVDQDQDORJ\WKDWLQYLWHVFKLOGUHQWRRUJDQL]HQXPHULFDOTXDQWLWLHVLQWRDQRU
GLQDOVHTXHQFH&DUH\8QGHUWKLVDFFRXQWFKLOGUHQ¿UVWOHDUQWKH
FRXQWLQJURXWLQHDVDNLQGRIODQJXDJHJDPHZLWKRQO\DYDJXHFRQQHFWLRQWR
QXPEHUV$WWKLVVWDJHDW\SLFDO\HDUROGPD\EHTXLWHSUR¿FLHQWDWFRXQWLQJ
+RZHYHULWQRZVHHPVOLNHO\WKDWWKHFRUUHFWLQWHUSUHWDWLRQRIWKH3LUDKmWHUPVLV³IHZPRUH
HYHQPRUH´LQZKLFKFDVHWKH\ZRXOGHQWLUHO\ODFNWHUPVIRUQXPEHUV)UDQNHWDO
IRXQG WKDW WKH 3LUDKm DVVLJQHG WKHLU TXDQWLW\ WHUPV GLIIHUHQWO\ ZKHQ WKH\ QDPHG TXDQWLWLHV
EHJLQQLQJZLWKDQGZRUNHGGRZQWRWKDQZKHQWKH\QDPHGWKHPIURPWR
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
'*HQWQHUDQG6&KULVWLH
IURPWRZKLOHDWWKHVDPHWLPHVKRZLQJOLWWOHRUQRLQVLJKWLQWRFDUGLQDOLW\
6XFKDFKLOGFDQUHDGLO\FRXQWWRIRXUEXWLIDVNHGWR³VKRZPHIRXUPDUEOHV´
ZLOO SURGXFH WKUHH ¿YH RU HLJKW PDUEOHV )XVRQ :\QQ (YHQ
ZKHQD\RXQJFKLOGKDVMXVWFRUUHFWO\FRXQWHGDVHWRIREMHFWV³´VKH
W\SLFDOO\FDQQRWUHVSRQG³IRXU´WRWKHTXHVWLRQ³6RKRZPDQ\DUHWKHUH"´
*UDGXDOO\WKHFKLOGOHDUQVWRDWWDFKQXPEHUZRUGVWRYHU\VPDOOVHWVL]HV
ZKLFKFDQEHWUDFNHGE\WKHREMHFWWUDFNLQJV\VWHP7KHOHDUQLQJLVDW¿UVWVORZ
DQG SLHFHPHDO௘²௘HYHQ DIWHU ELQGLQJWZR WR VHWV RI FDUGLQDOLW\ WZR ZHHNV RU
PRQWKVPD\HQVXHEHIRUHWKHFKLOGUHDOL]HVWKDWWKUHHUHIHUVWRDVHWZLWKWKUHH
LWHPV0L[0L[HWDO&DUH\%XWRQFHDFKLOGUHDFKHVDQ
XQGHUVWDQGLQJRIURXJKO\WKUHHRUIRXUWKHSDWWHUQFKDQJHV7KHFKLOGUDSLGO\
ELQGVWKHVXFFHHGLQJQXPEHUVWRWKHLUFDUGLQDOLWLHV$FFRUGLQJWR&DUH\
WKHFKLOGDWWKLVSRLQWKDVJUDVSHGWKHDQDORJLFDOPDSSLQJEHWZHHQWKH
OLQJXLVWLFQXPEHUVHTXHQFHDQGWKHFRQFHSWXDOVHTXHQFHRIZKROHQXPEHUVHW
VL]HVFRXQWLQJRQHIXUWKHULQWKHFRXQWVHTXHQFHPDSVRQWRLQFUHDVLQJE\RQH
LQWKHVHWVL]H$WWKLVSRLQWWKHFKLOGZLOODOVRVKRZXQGHUVWDQGLQJRIWKHVXF
FHVVRU SULQFLSOH WKDW HYHU\ QDWXUDO QXPEHU KDV D QDWXUDO VXFFHVVRU PRUH
VSHFL¿FDOO\³,IQXPEHUZRUG;UHIHUVWRDVHWZLWKFDUGLQDOYDOXHQWKHQH[W
QXPEHUZRUGLQWKHOLVWUHIHUVWRDVHWZLWKFDUGLQDOYDOXHQ´&DUH\
௘EXWVHH5LSVHWDOIRUDGLIIHUHQWDFFRXQW
2IFRXUVHWKHDQDORJ\RISDUDOOHOLQFUHDVHEHWZHHQFRXQWLQJRQHIXUWKHULQ
WKH FRXQW VHTXHQFH DQG DGGLQJ RQH LQ TXDQWLW\ LV TXLWH DEVWUDFW ,W UHTXLUHV
PDSSLQJIURPDOLQJXLVWLFUHSUHVHQWDWLRQRUGHUHGLQWLPHVXSSRUWHGFKLHÀ\E\
DXGLWRU\ LQSXW WR D UHSUHVHQWDWLRQ RUGHUHG LQ TXDQWLW\ VXSSRUWHG FKLHÀ\ E\
YLVXDO LQSXW &RQVLVWHQW ZLWK JHQHUDO SDWWHUQV LQ DQDORJLFDO GHYHORSPHQW
*HQWQHUDQG0HGLQDFKLOGUHQ¶V¿UVWIRUD\VLQWRWKHPDSSLQJEHWZHHQ
QXPEHUDQGVHWVL]HDUHORFDODQGFRQWH[WVSHFL¿F0L[0L[HWDO
)RUH[DPSOHLQ0L[¶VGLDU\VWXG\DWPRQWKV6SHQFHUVSRQWDQHRXVO\
EURXJKWIURPDQRWKHUURRPH[DFWO\WZRWUHDWVIRUWKHIDPLO\¶VWZRGRJVDQG
UHSHDWHGWKLVIHDWZLWKSHUIHFWDFFXUDF\VHYHUDOWLPHVRYHUWKHQH[WIHZZHHNV
%XWKLVXQGHUVWDQGLQJRI³WZRQHVV´ZDVKLJKO\FRQWH[WERXQGKHIDLOHGZKHQ
DVNHGWRJRJHW³WUDLQWUHDWV´IRUKLVWZRWR\WUDLQV
0L[ DQG FROOHDJXHV VXJJHVW WKDW KHDULQJ WZR VHWV ODEHOHG ZLWK WKH VDPH
FRXQWZRUGSURPSWVDFRPSDULVRQSURFHVVWKDWOHDGVWKHFKLOGWRQRWLFHWKHLU
FRPPRQQXPEHU0L[HWDO7KLVLVFRQVLVWHQWZLWKRXU¿UVWFODLPWKDW
FRPPRQ ODEHOV LQYLWH FRPSDULVRQ DQG DEVWUDFWLRQ 7KXV KHDULQJ WKH FRXQW
ODEHO ³WKUHH´ DSSOLHG WR WKUHH DSSOHV WKUHH SLJHRQV DQG VR RQ PD\ SURPSW
FRPSDULVRQDFURVVWKHVHWVDQGDEVWUDFWLRQRIWKHLUFRPPRQVHWVL]H1XPEHU
ODQJXDJHDOVRDSSHDUVWRKHOSUHLI\DQGVWDELOL]HQXPHULFDOUHSUHVHQWDWLRQVR
WKDWH[DFWQXPEHUVEHFRPHDYDLODEOHIRUXVHDWZLOO௘²௘DVHYLGHQFHGE\WKHGLI
¿FXOWLHVH[SHULHQFHGE\3LUDKmVSHDNHUVDVFRPSDUHGWR(QJOLVKVSHDNHUVDQG
HYHQE\5XVVLDQVSHDNHUVFDOFXODWLQJLQWKHLUVHFRQGODQJXDJHDVFRPSDUHGWR
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
0XWXDOERRWVWUDSSLQJEHWZHHQODQJXDJHDQGDQDORJLFDOSURFHVVLQJ )LJXUH 7
KH DQDORJ\ OLQNLQJ FRXQW VHTXHQFH DQG QXPHULFDO RUGHU ࣠EDVHG RQ &DUH\¶V SURSRVDOD:KHQWKHFKLOGKDV³´FRQQHFWHGWRVHWVL]HDQG³´WRVHWVL]H
WKLV PDNHV WZR LQVWDQFHV RI WKH VDPH UHODWLRQDO SDWWHUQ࣠²࣠SHUPLWWLQJ DQ DQDORJ\
7KLVDQDORJ\LQYLWHVWKHFDQGLGDWHLQIHUHQFHWKDWWKHVDPHUHODWLRQDOSDWWHUQZLOOKROG
IRU³´WKDWLVWKDWLWVVHWVL]HZLOOEHRQHJUHDWHUWKDQWKHVHWVL]HRI³´
࣠E7KHDQDORJ\DOVRLQYLWHVWKHDEVWUDFWLRQ
,03/,(6^)857+(5%<21(FRXQWOLVW*5($7(5%<21(VHWVL]H`
²࣠LHWKHLGHDWKDWWKHVHTXHQFHFRQWLQXHVLQGH¿QLWHO\
WKHVDPHVSHDNHUVFDOFXODWLQJLQWKHLU¿UVWODQJXDJH)LQDOO\DVWKH³SDUDOOHO
LQFUHDVH´DQDORJ\VKRZVQXPEHUODQJXDJHSURYLGHVDQHOHJDQWRUGHUHGVWUXF
WXUHWKDWFDQEHPDSSHGRQWRFRQFHSWXDOVWUXFWXUH
7KH SDUDOOHO LQFUHDVH DQDORJ\ IURP QXPEHU ODQJXDJH WR TXDQWLW\ RIIHUV D
VWULNLQJFDVHRIWKHSRZHURIV\VWHPDWLFODQJXDJHWRFRQIHUV\VWHPDWLFFRQFHS
WXDOVWUXFWXUH%XWWKLVH[DPSOHDOVRXQGHUOLQHVWKHLPSRUWDQFHRIDQDORJLFDO
DELOLW\LQUHDSLQJWKHSRWHQWLDOSRZHURIDV\PEROLFVWUXFWXUH2QO\ZKHQWKH
FKLOGDOLJQVWKHIHZH[DPSOHVLQKHUUHSHUWRLUHDQGQRWLFHVWKHFRPPRQUHOD
WLRQDOSDWWHUQWKDWKROGVDFURVVDQGFDQVKHPDNHWKHLQIHUHQFHWKDWWKH
VDPHSDWWHUQPLJKWKROGIRUDQGHYHQEH\RQG7KLVLVDTXLQWHVVHQWLDOFDVH
RIWKHUDWFKHWLQJRIDQDORJLFDODELOLW\ZLWKV\PEROLFVWUXFWXUHWRFUHDWHLQVLJKW
7KHDYDLODEOHHYLGHQFHVXJJHVWVWKDWERWKQXPEHUODQJXDJHDQGDQDORJLFDO
DELOLW\DUHQHHGHGIRUWKLVIHDW7KH¿QGLQJVGLVFXVVHGDERYHRQWKH3LUDKmDQG
WKH 0XQGDUXNX VXJJHVW WKDW KXPDQV ODFNLQJ QXPHULFDO ODQJXDJH GR QRW RU
QRW W\SLFDOO\ DUULYH DW WKLV LQVLJKW 7KH 3LUDKm GHDO ZLWK TXDQWLWLHV LQ WKHLU
RUGLQDU\OLIHEXWWKH\VHHPWRUHSUHVHQWWKHPRQO\LQWHUPVRIDSSUR[LPDWH
UHODWLYHPDJQLWXGH7XUQLQJWRWKHRWKHUVLGHRIWKHIHHGEDFNORRSZKDWLIRQH
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
'*HQWQHUDQG6&KULVWLH
SRVVHVVHVQXPEHUODQJXDJHEXWQRWJUHDWDQDORJLFDOSURZHVV")RUWKLVZHWXUQ
WRFKLPSDQ]HHVRXUFORVHVWFRXVLQVHYROXWLRQDULO\
5HODWLRQDO DELOLW\ DFURVV VSHFLHV 7KHUH LV HYLGHQFH WKDW D PDMRU
GLIIHUHQFH௘²௘SHUKDSVWKHPDMRUGLIIHUHQFH௘²௘LQFRJQLWLYHDELOLW\EHWZHHQRXU
VSHFLHV DQG WKH RWKHU JUHDW DSHV LV WKDW ZH JUHDWO\ H[FHHG WKH RWKHU DSHV LQ
UHODWLRQDO DELOLW\ *HQWQHU *HQWQHU DQG &KULVWLH +DXQ DQG &DOO
3HQQHWDO)RUH[DPSOHDOWKRXJKFKLPSDQ]HHVUHDGLO\OHDUQDQ
REMHFWPDWFKWRVDPSOHWDVNJLYHQ$DVVWDQGDUGFKRRVHDOWHUQDWLYH$UDWKHU
WKDQ%WKH\KDYHJUHDWGLI¿FXOW\OHDUQLQJDUHODWLRQDOPDWFKWRVDPSOHWDVN
JLYHQ$$ DV VWDQGDUG FKRRVH DOWHUQDWLYH %% UDWKHU WKDQ &' 2GHQ HW DO
3UHPDFN ௘²௘D WDVN WKDW KXPDQ FKLOGUHQ FDQ PDVWHU EHIRUH ¿YH
\HDUVRIDJH&KULVWLHDQG*HQWQHU
,QWHUHVWLQJO\WKHVHKLJKO\LQWHOOLJHQWDQLPDOVFDQOHDUQDQGXVHQXPEHUVXS
WRDURXQG%R\VHQHWDO)RUH[DPSOHFKLPSDQ]HHVLQ%R\VHQ¶VVWXG\
FRXOGSRLQWWRWKHFRUUHFW$UDELFQXPHUDOZKHQJLYHQDVHWRILWHPVDQGFRXOG
SRLQWWRDVHWRIREMHFWVZKHQJLYHQDQXPHULFV\PERO<HWWKHUHLVQRHYLGHQFH
WKDWWKH\HYHUH[SHULHQFHGWKHDQDORJLFDOLQVLJKWWKDWWKHVDPHSDUDOOHOLQFUHDVH
SDWWHUQRFFXUVRYHUDQGRYHU
&RQFOXGLQJUHPDUNV
7KHYLHZRIODQJXDJHHIIHFWVWDNHQKHUHLVLQVRPHZD\VDQDPDOJDPRIWKH
:KRU¿DQYLHZDQGWKH9\JRWVNLDQYLHZ:HDFFHSW9\JRWVN\¶VDFFRXQWWKDW
ODQJXDJHWKRXJKLQLWLDOO\DFTXLUHGVRFLDOO\EHFRPHVDQLQWHUQDOUHVRXUFHRQ
ZKLFKFKLOGUHQFDQGUDZ%XW9\JRWVN\¶VHPSKDVLVZDVRQWKHSRZHURIODQ
JXDJH TXD ODQJXDJH KH HPSKDVL]HG WKH UROH RI LQQHU VSHHFK LQ HVWDEOLVKLQJ
YROLWLRQDOFRQWUROSODQQLQJDELOLWLHVDQGVRIRUWK2QWKLVSRLQWRXUODQJXDJH
DVFRJQLWLYHWRRONLWYLHZLVPRUHDOLJQHGZLWKWKHPRGHUDWH:KRU¿DQSRVL
WLRQWKDWWKHVSHFL¿FVHPDQWLFVDQGJUDPPDURIDODQJXDJHLQÀXHQFHWKHFRJQL
WLYHFRQFHSWLRQVRILWVVSHDNHUV
7KH UHUHSUHVHQWDWLRQ SURFHVV ZH GHVFULEH PD\ EH UHOHYDQW WR .DUPLORII
6PLWK¶VLGHDRIUHSUHVHQWDWLRQDOUHGLVFULSWLRQ+HUDFFRXQWRIKRZWKH
DFFXPXODWLRQRIH[SHULHQFHOHDGVWRFRQFHSWXDOFKDQJHLVYHU\DSSHDOLQJEXW
LWKDVWKHVRPHZKDWP\VWHULRXVIHDWXUHWKDWUHSUHVHQWDWLRQDOUHGHVFULSWLRQRF
FXUVDIWHUPDVWHU\LVUHDFKHG7KHTXHVWLRQLVZKDWLQSDUWLFXODUFRPSHOVVXFK
DUHGHVFULSWLRQ:HVXJJHVWWKDWDVOHDUQHUVDFFXPXODWHH[SHULHQFHLQDGRPDLQ
2IFRXUVHWKLVFRXOGVLPSO\VWHPIURPVSHFL¿FDVSHFWVRIWKHZD\FKLPSDQ]HHVDUHWDXJKW
ODQJXDJH8QOLNHFKLOGUHQFKLPSDQ]HHVDUHQRWWDXJKWWRFKDQWWKHQXPEHUVDQGXQOLNHFKLO
GUHQZKRW\SLFDOO\KHDUQXPEHUVOLNH³´³´DQGDERYHFKLPSDQ]HHVPD\QRWUHFHLYH
PXFKHYLGHQFHWKDWWKHFRXQWVWULQJJRHVRQLQGH¿QLWHO\
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
0XWXDOERRWVWUDSSLQJEHWZHHQODQJXDJHDQGDQDORJLFDOSURFHVVLQJ WKH\EHJLQWRFRPSDUHOLNHSDLUVHDFKVXFKFRPSDULVRQVOLJKWO\LQFUHDVHVUHS
UHVHQWDWLRQDOXQLIRUPLW\DWOHDVWDWDORFDOOHYHO$VGRPDLQOHDUQLQJFRQWLQXHV
FRPSDULVRQVEHFRPHLQFUHDVLQJO\OLNHO\௘ERWKEHFDXVHWKHGHQVLW\RIH[HP
SODUVLQFUHDVHVDQGEHFDXVHSULRUFRPSDULVRQVZLOOKDYHDOUHDG\OHGWRJUHDWHU
XQLIRUPLW\7KHVHVPDOOHUVWHSVPD\VHWWKHVWDJHIRUDPRUHJOREDOUHSUHVHQ
WDWLRQDOUHGHVFULSWLRQ
7KHUHUHPDLQPDQ\RSHQTXHVWLRQV3HUKDSVFKLHIDPRQJWKHPLVKRZLWDOO
JHWVVWDUWHG,VWKHUHDVWRFNRILQQDWHUHODWLRQVWKDWVHHGVWKH¿UVWDQDORJLHV",I
VRZKDWPLJKWWKH\EH"$QGGRWKH\LQLWLDOO\VKRZXSDVSULPLWLYHFRPSRQHQWV
WKDW ODWHU FRPELQH ZLWK RWKHU SULPLWLYHV" 2U DUH WKHVH XUUHODWLRQV LQVWHDG
KLJKO\FRQFUHWHDQGFRQWH[WVSHFL¿F"5HVHDUFKHUVDUHRQO\EHJLQQLQJWRWDNH
RQWKHVHTXHVWLRQVHJ'RXPDVHWDO
:HKDYHUHYLHZHGHYLGHQFHIRUDIHHGEDFNV\VWHPLQZKLFKDQDORJLFDOSUR
FHVVHVVXSSRUWWKHDFTXLVLWLRQRIODQJXDJHZKLFKLQWXUQVXSSRUWVPRUHVRSKLV
WLFDWHG DQDORJL]LQJ 2Q WKLV DFFRXQW ODQJXDJH VHUYHV DV D FRJQLWLYH WRRO NLW
WKDW DPSOL¿HV RXU LQKHUHQW DELOLWLHV:H FRQVLGHUHG IRXU ZD\V LQ ZKLFK ODQ
JXDJHVXSSRUWVUHODWLRQDOFRJQLWLRQE\LQYLWLQJFRPSDULVRQDQGDEVWUDFWLRQ
E\IRVWHULQJUHL¿FDWLRQE\SURPRWLQJXQLIRUPUHODWLRQDOHQFRGLQJDQGE\SUR
YLGLQJV\VWHPLFOLQJXLVWLFVWUXFWXUHVWKDWFDQLQYLWHDQGVXSSRUWSDUDOOHOFRQ
FHSWXDOVWUXFWXUHV:HFRQFOXGHE\QRWLQJWKDWWKLVIUXLWIXOSDUWQHUVKLSEHWZHHQ
DQDORJ\DQGODQJXDJHGRHVQRWHQGZLWKFKLOGKRRG:HFRQWLQXHWRXVHDQD
ORJLFDOSURFHVVHV௘²௘RIWHQLQYLWHGE\ODQJXDJH௘²௘WROHDUQQHZFRQFHSWVDQGWR
UHUHSUHVHQWROGRQHVWKURXJKRXWDGXOWKRRG
5HIHUHQFHV
$VPXWK-'*HQWQHU&RQWH[WVHQVLWLYLW\RIUHODWLRQDOQRXQV3URFHHGLQJVRIWKHWK
DQQXDOPHHWLQJRIWKH&RJQLWLYH6FLHQFH6RFLHW\±
%RURGLWVN\/+RZGRHVRXUODQJXDJHVKDSHWKHZD\ZHWKLQN",Q%URFNPDQHG:KDW¶V
QH[W"'LVSDWFKHVRQWKHIXWXUHRIVFLHQFH9LQWDJH3UHVV
%RZGOH%'*HQWQHU,QIRUPDWLYLW\DQGDV\PPHWU\LQFRPSDULVRQV&RJQLWLYH3V\FKRO
RJ\±
%RZHUPDQ06&KRL6SDFHXQGHUFRQVWUXFWLRQ/DQJXDJHVSHFL¿FVSDWLDOFDWHJRUL]D
WLRQLQ¿UVWODQJXDJHDFTXLVLWLRQ,Q'*HQWQHU6*ROGLQ0HDGRZHGV/DQJXDJHLQPLQG
$GYDQFHVLQWKHVWXG\RIODQJXDJHDQGFRJQLWLRQ±௘&DPEULGJH0$0,73UHVV
%R\VHQ67**%HUQWVRQ0%+DQQDQ-7&DFLRSSR4XDQWLW\EDVHGLQWHUIHUHQFH
DQGV\PEROLFUHSUHVHQWDWLRQVLQFKLPSDQ]HHV3DQWURJORG\WHV-RXUQDORI([SHULPHQWDO3V\
FKRORJ\$QLPDO%HKDYLRU3URFHVVHV±
%URZQ5$¿UVWODQJXDJH7KHHDUO\VWDJHV&DPEULGJH0$+DUYDUG8QLYHUVLW\3UHVV
&DUH\6$UHFKLOGUHQIXQGDPHQWDOO\GLIIHUHQWNLQGVRIWKLQNHUVDQGOHDUQHUVIURPDGXOWV",Q
6)&KLSPDQ-:6HJDO5*ODVHUHGV7KLQNLQJDQGOHDUQLQJVNLOOV±+LOOV
GDOH1-/DZUHQFH(UOEDXP$VVRFLDWHV
&DUH\6%RRWVWUDSSLQJDQGWKHRULJLQRIFRQFHSWV'DHGDOXV
&DUH\67KHRULJLQRIFRQFHSWV1HZ<RUN2[IRUG8QLYHUVLW\3UHVV
&DUH\6(%DUWOHWW$FTXLULQJDVLQJOHQHZZRUG3DSHUVDQG5HSRUWVRQ&KLOG/DQ
JXDJH'HYHORSPHQW±
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
'*HQWQHUDQG6&KULVWLH
&DVDVROD0&DQODQJXDJHGRWKHGULYLQJ"7KHHIIHFWRIOLQJXLVWLFLQSXWRQLQIDQWV¶FDWHJR
UL]DWLRQRIVXSSRUWVSDWLDOUHODWLRQV'HYHORSPHQWDO3V\FKRORJ\±
&KLOGHUV-%7KHVWUXFWXUDODOLJQPHQWDQGFRPSDULVRQRIHYHQWVLQYHUEDFTXLVLWLRQ,Q
966ORXWVN\%&/RYH.0F5DHHGV3URFHHGLQJVRIWKHWKDQQXDO&RJQLWLYH6FL
HQFH6RFLHW\$XVWLQ7;&RJQLWLYH6FLHQFH6RFLHW\
1
&KLOGHUV-%,QSUHVV$WWHQWLRQWRPXOWLSOHHYHQWVKHOSV 2 \HDUROGVH[WHQGQHZYHUEV)LUVW
/DQJXDJH
&KLOGHUV-%-+3DLN.RUHDQDQG(QJOLVKVSHDNLQJFKLOGUHQXVHFURVVVLWXDWLRQDO
LQIRUPDWLRQWROHDUQQRYHOSUHGLFDWHWHUPV-RXUQDORI&KLOG/DQJXDJH±
&KULVWLH6'*HQWQHU5HODWLRQDOVLPLODULW\LQLGHQWLW\UHODWLRQ7KHUROHRIODQJXDJH
,Q69RVQLDGRX'.D\VHU$3URWRSDSDVHGV3URFHHGLQJVRIWKHVHFRQG(XURSHDQFRJQL
WLYHVFLHQFHFRQIHUHQFH±/RQGRQ7D\ORUDQG)UDQFLV
&KULVWLH 6 ' *HQWQHU ,Q SUHVV :KHUH K\SRWKHVHV FRPH IURP /HDUQLQJ QHZ UHODWLRQV E\
VWUXFWXUDODOLJQPHQW-RXUQDORI&RJQLWLRQDQG'HYHORSPHQW
&ODUN(9:KDW¶VLQDZRUG"2QWKHFKLOG¶VDFTXLVLWLRQRIVHPDQWLFVLQKLV¿UVWODQJXDJH
,Q 7 ( 0RRUH HG &RJQLWLYH GHYHORSPHQW DQG WKH DFTXLVLWLRQ RI ODQJXDJH ± 1HZ
<RUN$FDGHPLF3UHVV
&OHPHQW&$'*HQWQHU6\VWHPDWLFLW\DVDVHOHFWLRQFRQVWUDLQWLQDQDORJLFDOPDSSLQJ
&RJQLWLYH6FLHQFH±
'HKDHQH 6 7KH QXPEHU VHQVH +RZ WKH PLQG FUHDWHV PDWKHPDWLFV 1HZ<RUN 2[IRUG
8QLYHUVLW\3UHVV
'RXPDV/$$-(+XPPHO&06DQGKRIHU$WKHRU\RIWKHGLVFRYHU\DQGSUHGLFD
WLRQRIUHODWLRQDOFRQFHSWV3V\FKRORJLFDO5HYLHZ±௘
'XQEDU.+RZVFLHQWLVWVUHDOO\UHDVRQ6FLHQWL¿FUHDVRQLQJLQUHDOZRUOGODERUDWRULHV7KH
1DWXUHRI,QVLJKW±
)DONHQKDLQHU%.')RUEXV'*HQWQHU7KHVWUXFWXUHPDSSLQJHQJLQH$OJRULWKPDQG
H[DPSOHV$UWL¿FLDO,QWHOOLJHQFH±௘
)RUEXV.''*HQWQHU./DZ0$&/௘)$&$PRGHORIVLPLODULW\EDVHGUHWULHYDO
&RJQLWLYH6FLHQFH±
)UDQN0&'(YHUHWW()HGRUHQNR(*LEVRQ1XPEHUDVDFRJQLWLYHWHFKQRORJ\
(YLGHQFHIURP3LUDKmODQJXDJHDQGFRJQLWLRQ&RJQLWLRQ±
)XVRQ.&&KLOGUHQ¶VFRXQWLQJDQGFRQFHSWVRIQXPEHU1HZ<RUN6SULQJHU9HUODJ
*DOOLVWHO&55*HOPDQ3UHYHUEDODQGYHUEDOFRXQWLQJDQGFRPSXWDWLRQ&RJQLWLRQ
±
*HQWQHU'F6RPHLQWHUHVWLQJGLIIHUHQFHVEHWZHHQYHUEVDQGQRXQV&RJQLWLRQDQG%UDLQ
7KHRU\±
*HQWQHU':K\QRXQVDUHOHDUQHGEHIRUHYHUEV/LQJXLVWLFUHODWLYLW\YHUVXVQDWXUDOSDUWL
WLRQLQJ,Q6$.XF]DMHG/DQJXDJHGHYHORSPHQW9ROXPH/DQJXDJHWKRXJKWDQGFXO
WXUH±+LOOVGDOH1-/DZUHQFH(UOEDXP$VVRFLDWHV
*HQWQHU'6WUXFWXUHPDSSLQJ$WKHRUHWLFDOIUDPHZRUNIRUDQDORJ\&RJQLWLYH6FLHQFH
±
*HQWQHU ' 0HWDSKRU DV VWUXFWXUH PDSSLQJ7KH UHODWLRQDO VKLIW &KLOG 'HYHORSPHQW ±
*HQWQHU':K\ZH¶UHVRVPDUW,Q'*HQWQHUDQG6*ROGLQ0HDGRZHGV/DQJXDJHLQ
PLQG$GYDQFHVLQWKHVWXG\RIODQJXDJHDQGWKRXJKW±&DPEULGJH0$0,73UHVV
*HQWQHU'7KHGHYHORSPHQWRIUHODWLRQDOFDWHJRU\NQRZOHGJH,Q/*HUVKNRII6WRZH
'+5DNLVRQHGV%XLOGLQJREMHFWFDWHJRULHVLQGHYHORSPHQWDOWLPH±+LOOVGDOH1-
/DZUHQFH(UOEDXP$VVRFLDWHV
*HQWQHU':K\YHUEVDUHKDUGWROHDUQ,Q.+LUVK3DVHN5*ROLQNRIIHGV$FWLRQ
PHHWVZRUG+RZFKLOGUHQOHDUQYHUEV±2[IRUG8QLYHUVLW\3UHVV
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
0XWXDOERRWVWUDSSLQJEHWZHHQODQJXDJHDQGDQDORJLFDOSURFHVVLQJ *HQWQHU')$QJJRUR5.OLEDQRII,QSUHVV6WUXFWXUHPDSSLQJDQGUHODWLRQDOODQJXDJHVXS
SRUWFKLOGUHQ¶VOHDUQLQJRIUHODWLRQDOFDWHJRULHV&KLOG'HYHORSPHQW
*HQWQHU'/%RURGLWVN\,QGLYLGXDWLRQUHODWLYLW\DQGHDUO\ZRUGOHDUQLQJ,Q0%RZHU
PDQ6/HYLQVRQHGV/DQJXDJHDFTXLVLWLRQDQGFRQFHSWXDOGHYHORSPHQW±&DP
EULGJH8.&DPEULGJH8QLYHUVLW\3UHVV
*HQWQHU'0%RZHUPDQ:K\VRPHVSDWLDOVHPDQWLFFDWHJRULHVDUHKDUGHUWROHDUQWKDQ
RWKHUV7KH7\SRORJLFDO3UHYDOHQFHK\SRWKHVLV,Q-*XR(/LHYHQ6(UYLQ7ULSS1%XGZLJ
6 g]oDOLVNDQ . 1DNDPXUD HGV &URVVOLQJXLVWLF DSSURDFKHV WR WKH SV\FKRORJ\ RI ODQ
JXDJH5HVHDUFKLQWKHWUDGLWLRQRI'DQ,VDDF6ORELQ±௘1HZ<RUN/DZUHQFH(UOEDXP
$VVRFLDWHV
*HQWQHU'6&KULVWLH5HODWLRQDOODQJXDJHVXSSRUWVUHODWLRQDOFRJQLWLRQLQKXPDQVDQG
DSHV%HKDYLRUDODQG%UDLQ6FLHQFHV௘±
*HQWQHU',0)UDQFH7KHYHUEPXWDELOLW\HIIHFW6WXGLHVRIWKHFRPELQDWRULDOVHPDQ
WLFVRIQRXQVDQGYHUEV,Q6/6PDOO*:&RWWUHOO0.7DQHQKDXVHGV/H[LFDODPEL
JXLW\ UHVROXWLRQ 3HUVSHFWLYHV IURP SV\FKROLQJXLVWLFV QHXURSV\FKRORJ\ DQG DUWL¿FLDO LQWHOOL
JHQFH±6DQ0DWHR&$.DXIPDQQ
*HQWQHU'6*ROGLQ0HDGRZ:KLWKHU:KRUI,Q'*HQWQHUDQG6*ROGLQ0HDGRZ
HGV/DQJXDJHLQPLQG$GYDQFHVLQWKHVWXG\RIODQJXDJHDQGWKRXJKW±&DPEULGJH
0$0,73UHVV
*HQWQHU'-/RHZHQVWHLQ5HODWLRQDOODQJXDJHDQGUHODWLRQDOWKRXJKW,Q-%\UQHV(
$PVHOHGV/DQJXDJHOLWHUDF\DQGFRJQLWLYHGHYHORSPHQW±0DKZDK1-/DZUHQFH
(UOEDXP$VVRFLDWHV
*HQWQHU'-/RHZHQVWHLQ%+XQJ&RPSDULVRQIDFLOLWDWHVFKLOGUHQ¶VOHDUQLQJRIQDPHV
IRUSDUWV-RXUQDORI&RJQLWLRQDQG'HYHORSPHQW±
*HQWQHU'$%0DUNPDQ6WUXFWXUDODOLJQPHQWLQFRPSDULVRQ1RGLIIHUHQFHZLWKRXW
VLPLODULW\3V\FKRORJLFDO6FLHQFH±
*HQWQHU ' - 0HGLQD 6LPLODULW\ DQG WKH GHYHORSPHQW RI UXOHV &RJQLWLRQ ±
*HQWQHU'/1DP\&RPSDULVRQLQWKHGHYHORSPHQWRIFDWHJRULHV&RJQLWLYH'HYHORS
PHQW±
*HQWQHU'/1DP\7KHUROHRIFRPSDULVRQLQFKLOGUHQ¶VHDUO\ZRUGOHDUQLQJ,Q'*
+DOO65:D[PDQHGV:HDYLQJDOH[LFRQ±&DPEULGJH0$0,73UHVV
*HQWQHU'$2]\UHN6*ROGLQ0HDGRZ2*XUFDQOL6SDWLDOODQJXDJHSRWHQWLDWHV
VSDWLDOFRJQLWLRQ(YLGHQFHIURPGHDIKRPHVLJQHUV$PHULFDQ$VVRFLDWLRQIRUWKH$GYDQFHPHQW
RI6FLHQFHDQQXDOPHHWLQJ
*HQWQHU'0-5DWWHUPDQQ/DQJXDJHDQGWKHFDUHHURIVLPLODULW\,Q6$*HOPDQ
-3%\UQHVHGV3HUVSHFWLYHVRQWKRXJKWDQGODQJXDJH,QWHUUHODWLRQVLQGHYHORSPHQW±
/RQGRQ&DPEULGJH8QLYHUVLW\3UHVV
*HQWQHU'0-5DWWHUPDQQ.')RUEXV7KHUROHVRIVLPLODULW\LQWUDQVIHU6HSDUDWLQJ
UHWULHYDELOLW\IURPLQIHUHQWLDOVRXQGQHVV&RJQLWLYH3V\FKRORJ\±
*HQWQHU'&7RXSLQ6\VWHPDWLFLW\DQGVXUIDFHVLPLODULW\LQWKHGHYHORSPHQWRIDQDO
RJ\&RJQLWLYH6FLHQFH±
*LFN 0 / . - +RO\RDN $QDORJLFDO SUREOHP VROYLQJ &RJQLWLYH 3V\FKRORJ\ ௘±
*LFN0/.-+RO\RDN6FKHPDLQGXFWLRQDQGDQDORJLFDOWUDQVIHU&RJQLWLYH3V\FKRO
RJ\±
*ROGLQ0HDGRZ6D7KHUHVLOLHQFHRIODQJXDJH:KDWJHVWXUHFUHDWLRQLQGHDIFKLOGUHQFDQ
WHOOXVDERXWKRZDOOFKLOGUHQOHDUQODQJXDJH1HZ<RUN3V\FKRORJ\3UHVV
*ROLQNRII50.+LUVK3DVHN+RZWRGGOHUVEHJLQWROHDUQYHUEV7UHQGVLQ&RJQLWLYH
6FLHQFHV±௘
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
'*HQWQHUDQG6&KULVWLH
*RUGRQ 3 1XPHULFDO FRJQLWLRQ ZLWKRXW ZRUGV (YLGHQFH IURP$PD]RQLD 6FLHQFH ௘±௘
*XPSHU] - - 6 & /HYLQVRQ 5HWKLQNLQJ OLQJXLVWLF UHODWLYLW\&DPEULGJH 8. &DP
EULGJH8QLYHUVLW\3UHVV
+DOIRUG*6$QDORJLFDOUHDVRQLQJDQGFRQFHSWXDOFRPSOH[LW\LQFRJQLWLYHGHYHORSPHQW
+XPDQ'HYHORSPHQW±
+DU\X(0,PDL+2NDGD,QSUHVV2EMHFWVLPLODULW\ERRWVWUDSV\RXQJFKLOGUHQWRDFWLRQ
EDVHGYHUEH[WHQVLRQV&KLOG'HYHORSPHQW
+DXQ'%0-&DOO*UHDWDSHV¶FDSDFLWLHVWRUHFRJQL]HUHODWLRQDOVLPLODULW\&RJQLWLRQ
±
+LUVK3DVHN.5*ROLQNRII $FWLRQPHHWVZRUGV+RZFKLOGUHQOHDUQYHUEV2[IRUG
8QLYHUVLW\3UHVV
+XQW()$JQROL7KH:KRU¿DQK\SRWKHVLV$FRJQLWLYHSV\FKRORJ\SHUVSHFWLYH3V\
FKRORJLFDO5HYLHZ±
.DUPLORII6PLWK$%H\RQGPRGXODULW\$GHYHORSPHQWDOSHUVSHFWLYHRQFRJQLWLYHVFLHQFH
/RQGRQ$%UDGIRUG%RRN0,73UHVV
.RWRYVN\/'*HQWQHU&RPSDULVRQDQGFDWHJRUL]DWLRQLQWKHGHYHORSPHQWRIUHODWLRQDO
VLPLODULW\&KLOG'HYHORSPHQW±
/HYLQVRQ6&6SDFHLQODQJXDJHDQGFRJQLWLRQ([SORUDWLRQVLQFRJQLWLYHGLYHUVLW\&DP
EULGJH&DPEULGJH8QLYHUVLW\3UHVV
/LX-50*ROLQNRII.6DN2QHFRZGRHVQRWDQDQLPDOPDNH&KLOGUHQFDQH[WHQG
QRYHOZRUGVDWWKHVXSHURUGLQDWHOHYHO&KLOG'HYHORSPHQW±
/RHZHQVWHLQ-'*HQWQHU6SDWLDOPDSSLQJLQSUHVFKRROHUV&ORVHFRPSDULVRQVIDFLOL
WDWHIDUPDSSLQJV-RXUQDORI&RJQLWLRQDQG'HYHORSPHQW±
/RHZHQVWHLQ-'*HQWQHU5HODWLRQDOODQJXDJHDQGWKHGHYHORSPHQWRIUHODWLRQDOPDS
SLQJ&RJQLWLYH3V\FKRORJ\±
/XS\DQ*'+5DNLVRQ-/0F&OHOODQG/DQJXDJHLVQRWMXVWIRUWDONLQJ5HGXQGDQW
ODEHOVIDFLOLWDWHOHDUQLQJRIQRYHOFDWHJRULHV3V\FKRORJLFDO6FLHQFH±
0DUNPDQ$%'*HQWQHUD6SOLWWLQJWKHGLIIHUHQFHV$VWUXFWXUDODOLJQPHQWYLHZRI
VLPLODULW\-RXUQDORI0HPRU\DQG/DQJXDJH±
0DUNPDQ$%'*HQWQHUE6WUXFWXUDODOLJQPHQWGXULQJVLPLODULW\FRPSDULVRQV&RJQL
WLYH3V\FKRORJ\±௘
0HFN:+50&KXUFK$PRGHFRQWUROPRGHORIFRXQWLQJDQGWLPLQJSURFHVVHV
-RXUQDORI([SHULPHQWDO3V\FKRORJ\$QLPDO%HKDYLRU3URFHVVHV±
0L[.67KHFRQVWUXFWLRQRIQXPEHUFRQFHSWV&RJQLWLYH'HYHORSPHQW±
0L[.6&06DQGKRIHU$-%DURRG\1XPEHUZRUGVDQGQXPEHUFRQFHSWV7KH
LQWHUSOD\RIYHUEDODQGQRQYHUEDOTXDQWL¿FDWLRQLQHDUO\FKLOGKRRG,Q59.DLOHG$GYDQFHV
LQFKLOGGHYHORSPHQWDQGEHKDYLRU9ROXPH±1HZ<RUN$FDGHPLF3UHVV
1DP\//'*HQWQHU0DNLQJDVLONSXUVHRXWRIWZRVRZV¶HDUV<RXQJFKLOGUHQ¶VXVH
RIFRPSDULVRQLQFDWHJRU\OHDUQLQJ-RXUQDORI([SHULPHQWDO3V\FKRORJ\*HQHUDO±
1RYLFN/5$QDORJLFDOWUDQVIHUSUREOHPVLPLODULW\DQGH[SHUWLVH-RXUQDORI([SHULPHQ
WDO3V\FKRORJ\/HDUQLQJ0HPRU\DQG&RJQLWLRQ±
2GHQ'/5.57KRPSVRQ'3UHPDFN&DQDQDSHUHDVRQDQDORJLFDOO\"&RPSUH
KHQVLRQDQGSURGXFWLRQRIDQDORJLFDOSUREOHPVE\6DUDKDFKLPSDQ]HH3DQWURJORG\WHV,Q'
*HQWQHU.-+RO\RDN%.RNLQRYHGV7KHDQDORJLFDOPLQG3HUVSHFWLYHVIURP&RJQLWLYH
6FLHQFH±௘&DPEULGJH0$0,73UHVV
3HQQ'&.-+RO\RDN'-3RYLQHOOL'DUZLQ¶VPLVWDNH([SODLQLQJWKHGLVFRQWLQXLW\
EHWZHHQKXPDQDQGQRQKXPDQPLQGV%UDLQDQG%HKDYLRUDO6FLHQFHV±
3LFD3&/HPHU9,]DUG6'HKDHQH([DFWDQGDSSUR[LPDWHDULWKPHWLFLQDQDPD]R
QLDQLQGLJHQHJURXS6FLHQFH±
AUTHOR’S COPY | AUTORENEXEMPLAR
AUTHOR’S COPY | AUTORENEXEMPLAR
0XWXDOERRWVWUDSSLQJEHWZHHQODQJXDJHDQGDQDORJLFDOSURFHVVLQJ 3UHPDFN'7KHFRGHVRIPDQDQGEHDVWV%HKDYLRUDODQG%UDLQ6FLHQFHV±
3UXGHQ6.+LUVK3DVHN:/6KDOOFURVV50*ROLQNRII)RXQGDWLRQVRIYHUEOHDUQ
LQJ&RPSDULVRQKHOSVLQIDQWVDEVWUDFWHYHQWFRPSRQHQWV,Q+&KDQ+-DFRE(.DSLD
HGV3URFHHGLQJVRIWKHVW$QQXDO%RVWRQ8QLYHUVLW\&RQIHUHQFHRQ/DQJXDJH'HYHORS
PHQW±6RPHUYLOOH0$&DVFDGLOOD3UHVV
5LFKODQG / ( 5 * 0RUULVRQ . - +RO\RDN &KLOGUHQ¶V GHYHORSPHQW RI DQDORJLFDO
UHDVRQLQJ,QVLJKWVIURPVFHQHDQDORJ\SUREOHPV-RXUQDORI([SHULPHQWDO&KLOG3V\FKRORJ\
±
5LSV/-$%ORRP¿HOG-$VPXWK)URPQXPHULFDOFRQFHSWVWRFRQFHSWVRIQXPEHU
%HKDYLRUDODQG%UDLQ6FLHQFHV±௘
5RVV%+7KLVLVOLNHWKDW7KHXVHRIHDUOLHUSUREOHPVDQGWKHVHSDUDWLRQRIVLPLODULW\
HIIHFWV -RXUQDO RI ([SHULPHQWDO 3V\FKRORJ\ /HDUQLQJ 0HPRU\ DQG &RJQLWLRQ ±௘
6LPPV1'*HQWQHU6SDWLDOODQJXDJHDQGODQGPDUNXVH&DQDQG\HDUROGV
¿QGWKHPLGGOH",Q%&/RYH.0F5DH906ORXWVN\HGV3URFHHGLQJVRIWKHWK
DQQXDOFRQIHUHQFHRIWKH&RJQLWLYH6FLHQFH6RFLHW\±$XVWLQ7;&RJQLWLYH6FLHQFH
6RFLHW\
6ORELQ',/HDUQLQJWRWKLQNIRUVSHDNLQJ1DWLYHODQJXDJHFRJQLWLRQDQGUKHWRULFDOVW\OH
3UDJPDWLFV±
6PLWK/%66-RQHV%/DQGDX&RXQWQRXQVDGMHFWLYHVDQGSHUFHSWXDOSURSHUWLHVLQ
FKLOGUHQ¶VQRYHOZRUGLQWHUSUHWDWLRQV'HYHORSPHQWDO3V\FKRORJ\±
6SHONH(6&RUHNQRZOHGJH$PHULFDQ3V\FKRORJLVW±
6SHONH(667VLYNLQ,QLWLDONQRZOHGJHDQGFRQFHSWXDOFKDQJH6SDFHDQGQXPEHU,Q
0 %RZHUPDQ 6 & /HYLQVRQ HGV /DQJXDJH DFTXLVLWLRQ DQG FRQFHSWXDO GHYHORSPHQW
±&DPEULGJH8.&DPEULGJH8QLYHUVLW\3UHVV
7KRPSVRQ&$-(2SIHU,QSUHVV+RZKXQGUHGLVOLNHFKHUULHV(IIHFWRISURJUHVVLYH
DOLJQPHQWRQUHSUHVHQWDWLRQDOFKDQJHVLQQXPHULFDOFRJQLWLRQ&KLOG'HYHORSPHQW
:D[PDQ6556.OLEDQRII7KHUROHRIFRPSDULVRQLQWKHH[WHQVLRQRIQRYHODGMHF
WLYHV'HYHORSPHQWDO3V\FKRORJ\±
:D[PDQ65'%0DUNRZ:RUGVDVLQYLWDWLRQVWRIRUPFDWHJRULHV(YLGHQFHIURP
WRPRQWKROGLQIDQWV&RJQLWLYH3V\FKRORJ\±
:KRUI%//DQJXDJHWKRXJKWDQGUHDOLW\6HOHFWHGZULWLQJV&DPEULGJH0$7HFKQRORJ\
3UHVVRI0DVVDFKXVHWWV,QVWLWXWHRI7HFKQRORJ\
:ROII3.+ROPHV,QSUHVV/LQJXLVWLF5HODWLYLW\7RDSSHDULQ:,5(V&RJQLWLYH6FLHQFH
:\QQ.&KLOGUHQ¶VXQGHUVWDQGLQJRIFRXQWLQJ&RJQLWLRQ±
9\JRWVN\/67KRXJKWDQGODQJXDJH&DPEULGJH0$0,73UHVV2ULJLQDOZRUNSXE
OLVKHG
;X ) &RQFHSW IRUPDWLRQ DQG ODQJXDJH GHYHORSPHQW &RXQW QRXQV DQG REMHFW NLQGV ,Q
**DVNHOOHG2[IRUGKDQGERRNRISV\FKROLQJXLVWLFV±2[IRUG8QLYHUVLW\3UHVV
<DQ-.)RUEXV'*HQWQHU$WKHRU\RIUHUHSUHVHQWDWLRQLQDQDORJLFDOPDWFKLQJ,Q5
$OWHUPDQ'.LUVKHGV3URFHHGLQJVRIWKHWKDQQXDOPHHWLQJRIWKH&RJQLWLYH6FLHQFH
6RFLHW\±
AUTHOR’S COPY | AUTORENEXEMPLAR