Behavioral Economics Commons^™

Elections And Economic Turbulence In Brazil: Candidates, Voters, And Investors, Tony Petros Spanakos, Lucio R. Renno

Department of Political Science and Law Faculty Scholarship and Creative Works

The relation between elections and the economy in Latin America might be understood by considering the agency of candidates and the issue of policy preference congruence between investors and voters. The preference congruence model proposed in this article highlights political risk in emerging markets. Certain risk features increase the role of candidate campaign rhetoric and investor preferences in elections. When politicians propose policies that can appease voters and investors, elections may have a limited effect on economic indicators, such as inflation. But when voter and investor priorities differ significantly, deterioration of economic indicators is more likely. Moreover, voter and investor …

Global Analysis Of An Expectations Augmented Evolutionary Dynamics, Angelo Antoci, Antonio Gay, Massimiliano Landi, Pier Luigi Sacco

Research Collection School Of Economics

We consider a deterministic evolutionary model where players form expectations about future play. Players are not fully rational and have expectations that change over time in response to current payoffs and feedback from the past. We provide a complete characterization of the qualitative dynamics so induced for a two strategy population game, and relate our findings to standard evolutionary dynamics and equilibrium selection when agents have rational forward looking expectations.

Socio-Economic And Cost Of Living Indicators Among Foreign And Domestic-Born Latino Nationalities In The New York Metropolitan Area, 2005, Howard Caro-López

Center for Latin American, Caribbean, and Latino Studies

Introduction: This report focuses on comparing socio-economic conditions between foreign born and domestic born populations among the major Latino national groups in the New York City metropolitan area as of 2005.

Methods: Data on Latinos and other racial/ethnic groups were obtained from the U.S. Census Bureau American Community Survey, reorganized for public use by the Minnesota Population Center, University of Minnesota, IPUMSusa. Cases in the dataset were weighted and analyzed to produce population estimates.

Results: New York City Latinos lag considerably behind all other groups in terms of total family income. While median family income for non-Hispanic white residents far …

The Remittance Environment In Nigeria, A. Englama

CBN Occasional Papers

This preliminary study is on the remittance environment in Nigeria which became compelling because of low availability of information and empirical research on the subject. The need to obtain evidence-based information to drive policy formulation on remittances inflow which grew from US$1.4 billion in 2002 to US$17.9 billion in 2007 and tap its potentials to promote economic growth in Nigeria were the rationale for the study. An understanding of the drivers, inhibitors, characteristics, cost of transaction and channels of the flows would promote policy formulation to improve the remittance environment. The objectives of the survey were to examine current trend …

Directed Altruism And Enforced Reciprocity In Social Networks, Stephen Leider, Markus M. Mobius, Tanya S. Rosenblat, Quoc-Anh Do

Research Collection School Of Economics

We conducted online field experiments in large real-world social networks in order to decompose prosocial giving into three components: (1) baseline altruism toward randomly selected strangers, (2) directed altruism that favors friends over random strangers, and (3) giving motivated by the prospect of future interaction. Directed altruism increases giving to friends by 52% relative to random strangers, whereas future interaction effects increase giving by an additional 24% when giving is socially efficient. This finding suggests that future interaction affects giving through a repeated game mechanism where agents can be rewarded for granting efficiency-enhancing favors. We also find that subjects with …

The More Kids, The Less Mom's Divvy: Impact Of Childbirth On Intrahousehold Resource Allocation, Tomoki Fujii, Ryuichiro Ishikawa

Research Collection School Of Economics

We investigate how the impact of childbirth on intrahousehold allocation for married Japanese couples. We developed reduced‐form and structural‐form specifications from a unified theoretical framework. Under a weak set of assumptions, we can focus on private goods to track the changes in intrahousehold resource allocation. Our estimation results show that that allocation of resources within household tend to move to the disadvantage of women after a childbirth. One additional child is associated with a reduction in the wife's private expenditure share. Our estimation results reject the income-pooling hypothesis, and show that women are more risk averse than men.

Utility Functions, Future Consumption Targets And Subsistence Thresholds, Ashok Guha, Brishti Guha

Research Collection School Of Economics

If the consumer’s risk aversion behavior varies intertemporally and if the risk aversion coefficient on future consumption becomes very large, the consumer tends to aim at a fixed future consumption target. A by-product is a reinterpretation of subsistence theories of consumption.

Pre-Test Assessment, Thomas Berry

Publications – Dreihaus College of Business

Pre-tests are a non-graded assessment tool used to determine pre-existing subject knowledge. Typically pre-tests are administered prior to a course to determine knowledge baseline, but here they are used to test students prior to topical material coverage throughout the course. While counterintuitive, the pre-tests cover material the student is not expected to know, but serve as a motivational tool and a road map for the students, resulting in improved course performance.

Retirement Effects On Health In Europe, Norma B. Coe, Gema Zamarro

Education Reform Faculty and Graduate Students Publications

What are the health impacts of retirement? As talk of raising retirement ages in pensions and social security schemes continues around the world, it is important to know both the costs and benefits or the individual as well as the governments' budgets. In this paper we use the Survey of Health, Aging and Retirement in Europe (SHARE) dataset to address this question in a multi-country setting. We use country-specific early and full retirement ages as an instrument for retirement behavior in a regression discontinuity design approach. These statutory retirement ages clearly induce retirement, but are not related to an individual's …

Indescribability And Asymmetric Information At The Contracting Stage, Takashi Kunimoto

Research Collection School Of Economics

Maskin and Tirole [Maskin, E., Tirole, J., 1999. Unforeseen contingencies and incomplete contracts. Review of Economic Studies, 66, 83–114] show that indescribability does not matter for contractual incompleteness when there is symmetric information both at the contracting stage and at the trading stage. Following their setup, I show that with asymmetric information at both stages, indescribability can matter.

Economists, Value Judgments, And Climate Change: A View From Feminist Economics, Julie A. Nelson

Economics Faculty Publication Series

A number of recent discussions about ethical issues in climate change, as engaged in by economists, have focused on the value of the parameter representing the rate of time preference within models of optimal growth. This essay examines many economists' antipathy to serious discussion of ethical matters, and suggests that the avoidance of questions of intergenerational equity is related to another set of value judgments concerning the quality and objectivity of economic practice. Using insights from feminist philosophy of science and research on high reliability organizations, this essay argues that a more ethically transparent, real-world-oriented, and flexible economic practice would …

Gender-Role Orientation As Determinant Of Entrepreneurial Self-Efficacy, Mary Conway Dato-On, Stephen L. Mueller

Faculty Publications

Entrepreneurial self-efficacy (ESE) is often included in entrepreneurial intentions models to explain why some individuals are more likely than others to become entrepreneurs. An unsettled question among researchers is whether ESE differs between men and women. While early studies seem to suggest that men have higher ESE than women, more recent studies are inconclusive. Lacking empirical support for gender differences in ESE compels researchers to look for other factors to explain variation in entrepreneurial self-efficacy. The present study confirms two recent studies finding no significant difference in ESE between men and women in a representative sample of MBA students. This …

Why Brazil Has Not Grown: A Comparative Analysis Of Brazilian, Indian, And Chinese Economic Management, Fernando Ferrari, Anthony Petros Spanakos

Department of Political Science and Law Faculty Scholarship and Creative Works

This paper does not aim to dispute that Brazil would benefit from reforms in any or all of these areas. Rather, the paper offers a skeptical perspective on reform menus and proposes an alternative explanation for the faster growth of Brazil’s peers India and China2. The paper begins by introducing (section 1) the idea of the BRICs countries, to establish the basis for comparisons of most similar cases. It then surveys the results of a generation of Washington Consensus era growth (section 2). Although there is a considerable amount of divergence over what causes growth, it seems that something approaching …

Target Saving In An Overlapping Generations Model, Brishti Guha, Ashok S. Guha

Research Collection School Of Economics

We examine a model in which the utility function has been engineered so that it is optimal for consumers to aim for a fixed target level of retirement resources. In this case, consumption displays excess sensitivity to current income as well as perfect old age insurance. In an overlapping generations model, this leads naturally to multiple and unstable equilibria. Under static expectations, it also leads to a well-defined dynamics, including possible historical traps, implosions involving ever-diminishing capital stock and ever-increasing interest rates, and the feasibility of optimal one-time interventions.

Advertising And Collusion In Retail Markets, Kyle Bagwell, Gea Myoung Lee

Research Collection School Of Economics

We consider non-price advertising by retail firms that are privately informed as to their respective production costs. We first analyze a static model. We construct an advertising equilibrium, in which informed consumers use an advertising search rule whereby they buy from the highest-advertising firm. Consumers are rational in using the advertising search rule, since the lowest-cost firm advertises the most and also selects the lowest price. Even though the advertising equilibrium facilitates productive efficiency, we establish conditions under which firms enjoy higher expected profit when advertising is banned. Consumer welfare falls in this case, however. We next analyze a dynamic …

The Consequences Of Information Revealed In Auctions, Brett E. Katzman, Matthew Rhodes-Kropf

Faculty and Research Publications

This paper considers the ramifications of post-auction competition on bidding behavior under different bid announcement policies. In equilibrium, the auctioneer’s announcement policy has two distinct effects. First, announcement entices players to signal information to their post-auction competitors through their bids. Second, announcement can lead to greater bidder participation in certain instances while limiting participation in others. Specifically, the participation effect works against the signalling effect, thus reducing the impact of signalling found in other papers. Revenue, efficiency, and surplus implications of various announcement policies are examined.

Mapping The Discipline Of The Olympic Games An Author-Cocitation Analysis, Peter Warning, Rosie Ching, Kristine Toohey

Research Collection School Of Economics

The authors conducted an author cocitation analysis on prominent authors writing about the Olympics during the 1990s. Author cocitation is an established bibliometric technique that can be used to measure the relative similarities of topics written about by the cited authors. This enables a visual representation of the “intellectual space” of the discipline, in this case the Olympics, to be created for the period under review. So core and peripheral research areas are identified, along with their major contributors. The representation appears as a two-dimensional cluster-enhanced map. Subject expertise was then applied to the results to place labels on the …

Antidotes To High School Economics (Mis-)Education On World Hunger, Julie A. Nelson

Economics Faculty Publication Series

No abstract provided.

The Economic Impact Of The 50-Year Career Of Frank Broyles At The University Of Arkansas, Jeffery T. Collins

Publications and Presentations

Frank Broyles retired from the University of Arkansas on December 31, 2007, after a career in the athletic department of the school that lasted 50 years. First as coach and later as men’s athletic director, Frank Broyles had a profound impact on the state of Arkansas. His leadership skills led to tremendous unquantifiable benefits like personal mentorship of players and staff, notoriety, and philanthropy. His five decade long tenure at the University of Arkansas also led to demonstrable economic impact. The purpose of this study is to quantify and celebrate the economic benefits that have accrued to Arkansas because of …

Are Australia's Savings And Investment Fractionally Cointegrated?, Arusha V. Cooray, B. Felmingham

Faculty of Commerce - Papers (Archive)

This paper uses an Autoregressive Fractionally Integrated Moving Average (ARFIMA) process to determine if Australia’s savings and investment are fractionally cointegrated. The study finds the two series to be fractionally cointegrated implying that deviations from equilibrium are persistent.

Loco Labels And Marketing Madness: Improving How Consumers Interpret Information In The American Food Economy, Margaret Sova Mccabe

Law Faculty Scholarship

America's current food labeling scheme, as illustrated by the example of salt, is flawed when examined from the consumer and public health perspective. While the Food, Drug, and Cosmetic Act has sound scientific standards, those standards as currently applied to labels do not efficiently signal health information to consumers. Without better information on labels, consumers will continue to make poor choices at the grocery store. However, there are promising new ways to label. Both the United Kingdom and the domestic supermarket chain Hannaford’s have implemented simple health labeling on food packaging or grocery shelves to improve the amount and location …

Target Saving In An Overlapping Generations Model, Ashok S. Guha, Brishti Guha

Research Collection School Of Economics

We examine a model in which the utility function has been engineered so that it is optimal for consumers to aim for a fixed target level of retirement resources. In this case consumption displays excess sensitivity to current income as well as perfect old age insurance. In an overlapping generations model, this leads naturally to multiple and unstable equilibria. Under static expectations, it also leads to a well-defined dynamics, including possible historical traps, implosions involving ever-diminishing capital stock and ever-increasing interest rates, and the feasibility of optimal one-time interventions.

Complementarity And The Measurement Of Individual Risk Tradeoffs: Accounting For Quantity And Quality Of Life Effects, Mary F. Evans, V. Kerry Smith

CMC Faculty Publications and Research

This paper considers the factors responsible for differences with age in estimates of the wage compensation an individual requires to accept increased occupational fatality risk. We derive a relationship between the value of a statistical life (VSL) and the degree of complementarity between consumption and labor supplied when health status serves as a potential source of variation in this relationship. Our empirical analysis finds that variations in an individual’s health status or quality of life and anticipated longevity threats lead to significant differences in the estimated wage/risk tradeoffs. We describe how extensions to the specification of hedonic wage models, including …

Hedonic Adaptation And The Settlement Of Civil Lawsuits, John Bronsteen, Christopher J, Buccafusco, Jonathan S. Masur

Faculty Scholarship

This Essay examines the burgeoning psychological literature on happiness and hedonic adaptation (a person's capacity to preserve or recapture her level of happiness by adjusting to changed circumstances), bringing this literature to bear on the probability of pretrial settlement in civil litigation. The existing economic and behavioral models of settlement are incomplete because they do not incorporate the effect of adaptation on the sum for which a plaintiff is willing to accept an offer. When an individual first suffers a serious injury, she will likely predict that the injury will greatly diminish her future happiness. However, during the time that …

Do Firms Have Short Memories? Evidence From Major League Baseball, Andrew Healy

Economics Faculty Works

When deciding what salary to offer an employee, a firm needs to predict that employee’s future productivity. One piece of information that a firm can use to predict productivity is the employee’s past performance record. Classical theory predicts that firms will effectively use the available information to choose an appropriate salary offer. Evidence from baseball contracts indicates, however, that memory-based biases influence salary offers. Consistent with insights from psychology and behavioral economics, salaries are affected too much by recent performance compared with past performance. All organizations do not suffer equally from short memories. The teams that achieve the most with …

A Revelation Principle For Dominant Strategy Implementation, Jesse Schwartz, Quan Wen

Faculty and Research Publications

We introduce a perfect price discriminating (PPD) mechanism for allocation problems with private information. A PPD mechanism treats a seller, for example, as a perfect price discriminating monopolist who faces a price schedule that does not depend on her report. In any PPD mechanism, every player has a dominant strategy to truthfully report her private information. We establish a revelation principle for dominant strategy implementation: any outcome that can be dominant strategy implemented can also be dominant strategy implemented using a PPD mechanism. We apply this principle to derive the optimal, budget-balanced, dominant strategy mechanisms for public good provision and …

Gone In Sixty Milliseconds: Trademark Law And Cognitive Science, Rebecca Tushnet

Georgetown Law Faculty Publications and Other Works

Trademark dilution is a cause of action for interfering with the uniqueness of a trademark. For example, consumers would probably not think that "Kodak soap" was produced by the makers of Kodak cameras, but its presence in the market would diminish the uniqueness of the original Kodak mark. Trademark owners think dilution is harmful but have had difficulty explaining why. Many courts have therefore been reluctant to enforce dilution laws, even while legislatures have enacted more of them over the past half century. Courts and commentators have now begun to use psychological theories, drawing on associationist models of cognition, to …

Negotiating Divorce: Gender And The Behavioral Economics Of Divorce Bargaining, Tess Wilkinson-Ryan, Deborah Small

All Faculty Scholarship

No abstract provided.

The Disadvantages Of Immigration Restriction As A Policy To Improve Income Distribution, Howard F. Chang

All Faculty Scholarship

In this Article, I argue that tax and transfer policies are more efficient than immigration restrictions as instruments for raising the after tax incomes of the least skilled native workers. Policies to protect these native workers frol1'l immigrant competition in the labor market do no better at promoting distributive justice and are likely to impose a greater economic burden on natives in the country of immigration than the tax alternative. These immigration restrictions are especially costly given the disproportionate burden that they place on households with working women, which discourages fel1'wle participation in the labor force. This burden runs contrary …

The Effect Of Conflicting Moral And Legal Rules On Bargaining Behavior: The Case Of Divorce, Tess Wilkinson-Ryan, Jonathan Baron

All Faculty Scholarship

No abstract provided.