• KDI Journal of Economic Policy
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• v.12 no.2
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• pp.95-120
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• 1990

The underpricing of new shares of a firm that are offered to the public for the first time (initial offerings) is well known and has puzzled financial economists for a long time since it seems at odds with the optimal behavior of the owners of issuing firms. Past attempts by financial economists to explain this phenomenon have not been successful in the sense that the explanations given by them are either inconsistent with the equilibrium theory or implausible. Approaches by such authors as Welch or Allen and Faulhaber are no exceptions. In this paper, we develop a signalling model of capital investment to explain the underpricing phenomenon and also analyze the efficiency of investment. The model focuses on the information asymmetry between the owners of issuing firms and general investors. We consider a firm that has been owned and operated by a single owner and that has a profitable project but has no capital to develop it. The profit from the project depends on the capital invested in the project as well as a profitability parameter. The model also assumes that the financial market is represented by a single investor who maximizes the expected wealth. The owner has superior information as to the value of the firm to investors in the sense that it knows the true value of the parameter while investors have only a probability distribution about the parameter. The owner offers the representative investor a fraction of the ownership of the firm in return for a certain amount of investment in the firm. This offer condition is equivalent to the usual offer condition consisting of the number of issues to sell and the unit price of a share. Thus, the model is a signalling game. Using Kreps' criterion as the solution concept, we obtained an essentially unique separating equilibrium offer condition. Analysis of this separating equilibrium shows that the owner of the firm with high profitability chooses an offer condition that raises an amount of capital that is short of the amount that maximizes the potential profit from the project. It also reveals that the fraction of the ownership of the firm that the representative investor receives from the owner of the highly profitable firm in return for its investment has a value that exceeds the investment. In other words, the initial offering in the model is underpriced when the profitability of the firm is high. The source of underpricing and underinvestment is the signalling activity by the owner of the highly profitable firm who attempts to convince investors that his firm has a highly profitable project by choosing an offer condition that cannot be imitated by the owner of a firm with low profitability. Thus, we obtained two main results. First, underpricing is a result of a signalling activity by the owner of a firm with high profitability when there exists information asymmetry between the owner of the issuing firm and investors. Second, such information asymmetry also leads to underinvestment in a highly profitable project. Those results clearly show the underpricing entails underinvestment and that information asymmetry leads to a social cost as well as a private cost. The above results are quite general in the sense that they are based upon a neoclassical profit function and full rationality of economic agents. We believe that the results of this paper can be used as a basis for further research on the capital investment process. For instance, one can view the results of this paper as a subgame equilibrium in a larger game in which a firm chooses among diverse ways to raise capital. In addition, the method used in this paper can be used in analyzing a wide range of problems arising from information asymmetry that the Korean financial market faces.

• The Journal of Korean Institute of Communications and Information Sciences
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• v.39C no.3
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• pp.298-306
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• 2014

The railway signalling system for safe train operation regulates the train speed to ensure the safety distance between consecutive trains by using wayside facilities such as track circuits and interlocking systems. In addition, this signalling system controls the trackside equipment such as a railway point along the train line. This ground-equipment-based train control systems require high CAPEX and OPEX. To deal with these problems, the train control system using the on-board controller has been recently proposed and its related technologies have been widely studied. The on-board-controller-based train control system is that the on-board controller can directly control the trackside equipment on the train line. In addition, if this system is used, the wayside facilities can be simplified, and as a result, the efficient and cost-effective train control system can be realized. To this end, we have developed the prototypes of the on-board controller and wayside object control units which control the point and crossing gate and performed the integrated operation simulation in a testbed. In this paper, before the field test of the on-board-controller-based train control system, we perform the preliminary field trial including the installation test, wireless access test, interface test with other on-board devices, and normal operation test.

• Proceedings of the KSR Conference
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• 2011.05a
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• pp.1174-1181
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• 2011

This paper investigates the current established preventive maintenance and its corresponding data on a point machine among railway signalling facilities and suggests a part of considerable plans when the policy of the preventive maintenance is modified. It is not appropriated to apply the optimized preventive replacement period considered with the cost simply. In that case, it is suggested that the reliability should be analyzed failure mode and effects through collecting the on-site failure data sufficiently. Then, that result can be proposed to adjust the proper criteria into the rational way by comparing the initial maintenance criteria. In this paper, the alternative way to determine the feasibility of the inspection period using failure probability is introduced.

• Proceedings of the KSR Conference
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• 2004.10a
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• pp.1291-1296
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• 2004

CBTC(Communication Based Train Control) System has many superior train control performances than conventional track-circuit-based train control system with higher train operation efficiency, and less installation and maintenance cost. It is expected that CBTC will replace the conventional train control systems in near future. As CBTC has different mechanisms from conventional track-circuit-based train control systems in identifying train positions, and communicating information between train and ground facility, we have to pay a carful attention to making the interface between CBTC equipments and other signalling devices. This paper provides the construction of the interface between CBTC train-born equipment and other train control equipments including ATO, TCMS, brake controller, door controller.

• The Journal of the Institute of Internet, Broadcasting and Communication
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• v.11 no.4
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• pp.131-140
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• 2011

Proxy Mobile IPv6 (PMIPv6) is designed to provide a network-based localized mobility management protocol, but it does not handle the global mobility of hosts. In this paper, we propose a location management scheme based on Domain Name System (DNS) for PMIPv6. In this proposed scheme, DNS as a location manager provides PMIPv6 for global mobility. In addition, a paging extension scheme is introduced to PMIPv6 in order to support large numbers of mobile terminals and enhance network scalability. To evaluate the proposed location management scheme, we establish an analytical model, formulate the location update and the paging cost, and analyse the influence of the different factors on the total signalling cost. The performance results show how the total signal cost changes under various parameters.

• Journal of the Institute of Electronics Engineers of Korea TC
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• v.43 no.1 s.343
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• pp.103-110
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• 2006

Internet engineering task force (IETF) has proposed hierarchical mobile IPv6 (HMIPv6) in order to reduce a frequent location registration of a mobile node in mobile IPv6 (MIPv6). All traffics toward a mobile node must be transmitted through a MAP in HMIPv6. This brings unnecessary packet latency because of the increased processing cost of packet at the MAP. At this point the processing cost of packet at the MAP is influenced by the packet arrival rate for a mobile node and the number of mobile nodes in MAP domain. In this paper, we propose that MIPv6 and HMIPv6 are adaptively selected to minimize signaling coast of network as complementing weak point of MIPv6 and HMIPv6. After suppose that the packet arrival rate for a mobile node is fixed ,with this in mind, we find the optimal number of mobile nodes compared the total cost of HMIPv6 with the total cost of MIPv6. And if Mobile Nodes that the MAP is able to manage is full in MAP domain, a mobile node entering MAP domain is provided connection by MIPv6 instead of HMIPv6. In the conclusion, the proposed method of this paper shows that the weak points of MIPv6 and HMIPv6 are removed by adaptive selecting each other.

• The KIPS Transactions:PartC
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• v.8C no.5
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• pp.677-682
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• 2001

In a microcell environment having frequent inter-cell movement of a subscriber, the amount of signalling traffic rapidly increases due to the treatment of location update and other necessary actions. As a way to reduce such an overhead, this paper presents an algorithm that dynamically allocates subscribers paging and location areas each of which has a different size and shape, depending on the characteristics of subscriber mobility. Mathematical analysis results show that this algorithm allows reduced area management cost, compared to conventional algorithms.

• Journal of the Korea Institute of Information and Communication Engineering
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• v.14 no.6
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• pp.1382-1390
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• 2010

A multicast session protocol in wireless networks reduces the session delay of multicast delivery caused by moving of mobile host. A hand-off scheme, called MSDR (multicast session delay reduction), in mobile networks is proposed. MSDR protocol that minimizes the delay of a session re-establishment uses the basic unicast routing function of the IETF mobile IP and the DFA (designated foreign agent) to provide multicast services for mobile hosts. Proposed MSDR protocol allows the mobile hosts to continuously receive packets when they move across the basic sets during hand-off. Discrete-event simulation carried out for performance evaluation of MSDR protocol, and simulation results indicated that our scheme can offer a better performance of multicast session delay reduction in terms of signalling cost than that of IETF.

• Proceedings of the KIEE Conference
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• 2009.04a
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• pp.195-197
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• 2009

It is a proven fact with the opening of the Seoul metro line number 1 in 1974 traffic congestion on the roads has decreased and the efficiency of people transportation in general has greatly been enhanced in the downtown and surrounding areas of Seoul. Even today construction of new subway lines are under way and many more are being planned due to the easy access to stations, short waiting and average travel times, compared with personal vehicles, contributing to the efficiency of the public transportation systems that are linking the downtown areas and also the intercity systems in moving passengers during rush hour and times of special event. Since the labour costs of the train operator in any large city based subway system accounts for a major part of the operating costs per kilometer and to ensure cost efficient operations, especially during non-peak hours, it is necessary to implement an unmanned(auto-driven) subway system. In order to implement such a system it is imperative that the on-board and wayside signalling control systems be fully automated as well. Only through proper examination of safety procedures not only by the AUGT(Automated Urban Guided Transport)system but also by ail the international standards organizations involved can safely and stability be ensured.

• The Transactions of The Korean Institute of Electrical Engineers
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• v.63 no.5
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• pp.703-712
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• 2014

To improve the efficiency and safety of railway systems, the train control system has been considerably evolved from the ground-equipment-based control system (e.g. track circuit, interlocking system, etc.) into the on-board-equipment-based control system. In addition, this train control system enables the rolling stock to intelligently control the trackside facilities by introducing the information and communication technologies (ICT). Accordingly, since the ICT-based train control system makes the railway system be simplified (i.e. the heavy ground-equipment can be removed), the efficient and cost-effective railway system can be realized. In this paper, we perform the feasibility test of the ICT-based train control system via a simulation. To this end, we have developed the prototypes of the on-board controller and wayside object control units which control the point and crossing gate and performed the integrated operation simulation in a testbed. In this paper, before the field test of the on-board-controller-based train control system, we perform the Consecutive operation test for prototypes of the on-board controller, wayside object control units and local control computer.