Other Economics Commons^™

Money Is More Than Memory, Maria Bigoni, Gabriele Camera, Marco Casari

ESI Working Papers

Impersonal exchange is the hallmark of an advanced society and money is one key institution that supports it. Economic theory regards money as a crude arrangement for monitoring counterparts’ past conduct. If so, then a public record of past actions—or memory—should supersede the function performed by money. This intriguing theoretical postulate remains untested. In an experiment, we show that the suggested functional equivalence between money and memory does not translate into an empirical equivalence: money removed the incentives to free ride, while memory did not. Monetary systems performed a richer set of functions than just revealing past behaviors.

Modeling Interactions Between Risk, Time, And Social Preferences, Mark Schneider

ESI Working Papers

Recent studies have observed systematic interactions between risk, time, and social preferences that constitute violations of `dimensional independence' and are not explained by the leading models of decision making. This note provides a simple approach to modeling such interaction effects while predicting new ones. In particular, we present a model of rational-behavioral preferences that takes the convex combination of `behavioral' System 1 preferences and `rational' System 2 preferences. The model provides a unifying approach to analyzing risk, time, and social preferences, and predicts how these preferences are correlated with reliance on System 1 or System 2 thinking.

A Dual System Model Of Risk And Time Preferences, Mark Schneider

ESI Working Papers

Discounted Expected Utility theory has been a workhorse in economic analysis for over half a century. However, it cannot explain empirical violations of 'dimensional independence' demonstrating that risk interacts with time preference and time interacts with risk preference, nor does it explain present bias or magnitude-dependence in risk and time preferences, or correlations between risk preference, time preference, and cognitive reflection. We demonstrate that these and other anomalies are explained by a dual system model of risk and time preferences that unless models of a rational economic agent, models based on prospect theory, and dual process models of decision making.

Ten Years Of Economic Analyses For The European Marine Strategy Framework Directive: Overview Of Experiences And Lessons Learned, Rob Van Der Veeren, Ann Kathrin Buchs, Günter Hörmandinger, Soile Oinonen, Conceição Santos, Max Vretborn

Journal of Ocean and Coastal Economics

The European Marine Strategy Framework Directive, which came into force in 2008, requires from Member States inter alia to perform various (types of) economic analyses. In order to help Member States to implement this directive, the European working group on Economic and Social Analysis was initiated in 2009. This working group has developed various guidance documents which have been very useful in helping each other to understand the Directive and its requirements, to develop one language, to understand the pros and cons of various approaches, and to share experiences. However, up until now, outside of this working group this information …

Allisions, Collisions And Groundings: Estimating The Impact Of The Physical Oceanographic Real Time System (Ports(R)) On Accident Reduction, Eric Wolfe, Kenneth N. Mitchell

Journal of Ocean and Coastal Economics

Reductions in the rates of domestic allisions, collisions and groundings (ACGs) are the result of technological advances as well as implementation of best practices in the maritime industry. This study estimates long-term gross benefits derived from expanded implementation of the National Oceanic and Atmospheric Administration’s Physical Oceanographic Real-Time System (PORTS®) with respect to reductions in ACG rates in the United States. Following PORTS® installations that provided expanded coverage of U.S. ports and adjoining areas, concomitant decreases in accident rates occurred. While previous estimates suggested that between twenty and sixty percent of grounding accident reductions were due to PORTS®, current research …

Using Response Times To Measure Ability On A Cognitive Task, Aleksandr Alekseev

ESI Working Papers

I show how using response times as a proxy for effort coupled with an explicit process-based model can address a long-standing issue of how to separate the effect of cognitive ability on performance from the effect of motivation. My method is based on a dynamic stochastic model of optimal effort choice in which ability and motivation are the structural parameters. I show how to estimate these parameters from the data on outcomes and response times in a cognitive task. In a laboratory experiment, I find that performance on a Digit-Symbol test is a noisy and biased measure of cognitive ability. …

Why Trust Out-Groups? The Role Of Punishment Under Uncertainty, Xiaofei Pan, Daniel Houser

Economics Faculty Journal Articles

We conducted a hidden-effort trust game, in which we assigned subjects to one of two groups. The groups, which were formed through two different group formation processes, included a “social” group that required sharing and exchange among its members, and a “non-social” group that did not. Once assigned, subjects participated in the game with members from both groups, either with or without the opportunity to punish a trustee who may have defected on them. We found that for investors in the non-social group, the opportunity to punish a trustee worked to promote trust, but only when the trustee was a …

Free Trade And Corporate Social Responsibility: Ethical Dilemmas In Global Economic Development, Sarah Papion

Capstone Projects and Master's Theses

Through the lens of the free-trade-optimist, it is black and white: corporations bring jobs, and jobs equal a happy and healthy economy. A major oversight in this neoliberal Utopian ideology is that corporations are not in the business of building communities, nor do they have an interest in keeping their operations stationary enough to allow economic growth to occur over a span of years. Corporations abandon communities as quickly as they arrive to find their next cheap labor hub. Quite contradictory to the original purpose of free trade, economic growth in Free Trade Zones is not long term or secure. …

Slow-Fast Analysis Of A Multi-Group Asset Flow Model With Implications For The Dynamics Of Wealth, Mark Desantis, David Swigon

Economics Faculty Articles and Research

The multi-group asset flow model is a nonlinear dynamical system originally developed as a tool for understanding the behavioral foundations of market phenomena such as flash crashes and price bubbles. In this paper we use a modification of this model to analyze the dynamics of a single-asset market in situations when the trading rates of investors (i.e., their desire to exchange stock for cash) are prescribed ahead of time and independent of the state of the market. Under the assumption of fast trading compared to the time-rate of change in the prescribed trading rates we decompose the dynamics of the …

On Booms That Never Bust: Ambiguity In Experimental Asset Markets With Bubbles, Brice Corgnet, Roberto Hernán-González, Praveen Kujal

ESI Working Papers

We study the effect of ambiguity on the formation of bubbles and on the occurrence of crashes in experimental asset markets à la Smith, Suchanek, and Williams (1988). We extend their framework to an environment where the fundamental value of the asset is ambiguous. We show that, when the fundamental value is ambiguous, asset prices tend to be lower than when it is risky although bubbles form in both the ambiguous and the risky environments. Additionally, bubbles do not crash in the ambiguous case whereas they do so in the risky one. These findings regarding depressed prices and the absence …

Toward Improving Export Diversification And Economic Growth In Small Island Developing States, Marlo B. Murphy-Braynen

USF Tampa Graduate Theses and Dissertations

This dissertation seeks to address the following research question: How does export diversification impact economic growth in Small Island Developing States? More specifically, this dissertation sheds light on the strength and nature of the relationship between export diversification and economic growth with a focus on Small Island Developing States (SIDS). Informed by prior literature and the empirical analysis in this dissertation, I propose a conceptual industry development model that aims to stimulate and promote export development, diversification, and growth within the context of Small Island Developing States in general and with a specific focus on The Bahamas. In accordance with …

Low Income Households Investment In Energy Efficient Appliances, Jieun Chang

Faculty Articles & Research

Introduction

•Does adopting energy efficient appliances reduce electricity consumption among low income households?

•Low income households: households below 150% of the federal poverty level

•Energy efficient appliances:

energy star refrigerators and energy star room air conditioners

Conditional Independence In A Binary Choice Experiment, Nathaniel Wilcox

ESI Working Papers

Experimental and behavioral economists, as well as psychologists, commonly assume conditional independence of choices when constructing likelihood functions for structural estimation. I test this assumption using data from a new experiment designed for this purpose. Within the limits of the experiment’s identifying restriction and designed power to detect deviations from conditional independence, conditional independence is not rejected. In naturally occurring data, concerns about violations of conditional independence are certainly proper and well-taken (for well-known reasons). However, when an experimenter employs contemporary state-of-the-art experimental mechanisms and designs, the current evidence suggests that conditional independence is an acceptable assumption for analyzing data …

Forms Of Naturalism In Seminal Neoclassical Texts: An Analysis And Comparison Of Léon Walras, John Bates Clark, And William Stanley Jevons, Mark Silverman

Doctoral Dissertations

At issue here is the role of “naturalism” in certain seminal neoclassical texts. I outline both a positive and normative dimension to the term “naturalism.” Along its positive dimension, I use the term to mean that the social sciences ought to follow the method of the natural sciences. Along its normative dimension, I use it to mean that the natural order of things can provide for justice. I examine the role these concepts play in the works of Léon Walras, John Bates Clark, and William Stanley Jevons. The question I raise, through this examination, is whether the positive conception of …

Selection In The Lab: A Network Approach, Aleksandr Alekseev, Mikhail Freer

ESI Working Papers

We study the selection problem in economic experiments by focusing on its dynamic and network aspects. We develop a dynamic network model of student participation in a subject pool, which assumes that students' participation is driven by the two channels: the direct channel of recruitment and the indirect channel of student interaction. Using rich recruitment data from a large public university, we find that the patterns of participation and biases are consistent with the model. We also find evidence of both short- and long-run selection biases between males and females, as well as between cohorts of students. Males tend to …

Agglomeration And The Extent Of The Market: An Experimental Investigation Into Spatially Coordinated Exchange, Jordan Adamson

ESI Working Papers

How and why do agglomerations emerge? While economic historians emphasize trade and economic geographers emphasize variety, we still don’t understand the role of coordination. I fill this gap by extending the model of Fudenberg and Ellison (2003) to formalize Smith’s (1776) theory of agglomeration. I then test the model in a laboratory experiment and find individuals tend to coalesce purely to coordinate exchange, with more agglomeration when there is a larger variety of goods in the economy. I also find that tying individuals to the land reduces agglomeration, but magnifies the effect of variety.

Three Essays On Child Welfare In Côte D’Ivoire, Didier Wayoro

Doctoral Dissertations

The objective of this dissertation is to examine the impact of early life events such as civil conflicts and rainfall variability on child welfare in Côte d’Ivoire and investigate possible mitigating factors. It consists of three essays. Focusing on the 2010-2011 post-electoral violence, the empirical results from the first essay show that armed conflicts reduce the birth weight of newborn children who were in-utero during the conflict and increase the probability among exposed pregnant women of having an underweight child at birth. In addition, the study suggests that the impact of conflict on birth weight and low birth weight (less …

Coordination And Evolutionary Dynamics: When Are Evolutionary Models Reliable?, Daniel Graydon Stephenson

ESI Publications

This study reports a continuous-time experimental test of evolutionary models in coordinated attacker–defender games. It implements three experimental treatment conditions: one with strong coordination incentives, one with weak coordination incentives, and one with zero coordination incentives. Each treatment exhibits identical equilibrium predictions but distinct evolutionary predictions. Observed behavior was tightly clustered around equilibrium under both the zero coordination treatment and the weak coordination treatment but widely dispersed from equilibrium under the strong coordination treatment. This result was anticipated by explicitly dynamic models but not by conventional stability criteria. In contrast to the widely maintained assumption of sign-preservation, subjects frequently switched …

Variation Among Populations In The Immune Protein Composition Of Mother's Milk Reflects Subsistence Pattern, Laura D. Klein, Jincui Huang, Elizabeth A. Quinn, Melanie A. Martin, Alicia A. Breakey, Michael Gurven, Hillard Kaplan, Claudia Valeggia, Grazyna Jasienska, Brooke Scelza, Carlito B. Lebrilla, Katie Hinde

ESI Publications

Lay Summary: Adaptive immune proteins in mothers’ milk are more variable than innate immune proteins across populations and subsistence strategies. These results suggest that the immune defenses in milk are shaped by a mother’s environment throughout her life.

Background and objectives: Mother’s milk contains immune proteins that play critical roles in protecting the infant from infection and priming the infant’s developing immune system during early life. The composition of these molecules in milk, particularly the acquired immune proteins, is thought to reflect a mother’s immunological exposures throughout her life. In this study, we examine the composition of innate …

Do Negative Random Shocks Affect Trust And Trustworthiness?, Hernán Bejerano, Joris Gillet, Ismael Rodriguez-Lara

ESI Publications

We report data from a variation of the trust game aimed at determining whether (and how) inequality and random shocks that affect wealth influence the levels of trust and trustworthiness. To tease apart the effect of the shock and the inequality, we compare behavior in a trust game where the inequality is initially given and one where it is the result of a random shock that reduces the second mover's endowment. We find that first‐movers send less to second‐movers but only when the inequality results from a random shock. As for the amount returned, second‐movers return less when they are …

Do Negative Random Shocks Affect Trust And Trustworthiness?, Hernán Bejerano, Joris Gillet, Ismael Rodriguez-Lara

ESI Publications

We report data from a variation of the trust game aimed at determining whether (and how) inequality and random shocks that affect wealth influence the levels of trust and trustworthiness. To tease apart the effect of the shock and the inequality, we compare behavior in a trust game where the inequality is initially given and one where it is the result of a random shock that reduces the second mover's endowment. We find that first‐movers send less to second‐movers but only when the inequality results from a random shock. As for the amount returned, second‐movers return less when they are …

The Supply Side Determinants Of Territory And Conflict, Jordan Adamson, Erik O. Kimbrough

ESI Working Papers

What determines the geographic extent of territory? We microfound and extend Boulding’s “Loss of Strength Gradient” to predict the extensive and intensive margins of conflict across space. We show how economies of scale in the production of violence and varying costs of projecting violence at a distance combine to affect the geographic distribution of conflict and territory. We test and probe the boundaries of this model in an experiment varying the fixed costs of conflict entry. As predicted, higher fixed costs increase the probability of exclusive territories; median behavior closely tracks equilibrium predictions in all treatments.

A Bit Like Cash: Understanding Cash-For-Bitcoin Transactions Through Individual Vendors, Stephanie J. Robberson, Mark R. Mccoy

Journal of Digital Forensics, Security and Law

As technology improves and economies become more globalized, the concept of currency has evolved. Bitcoin, a cryptographic digital currency, has been embraced as a secure and convenient type of money. Due to its security and privacy for the user, Bitcoin is a good tool for conducting criminal trades. The Financial Crimes Enforcement Network (FinCEN) has regulations in place to make identification information of Bitcoin purchasers accessible to law enforcement, but enforcing these rules with cash-for-Bitcoin traders is difficult. This study surveyed cash-for-Bitcoin vendors in Oklahoma, Texas, Arkansas, Missouri, Kansas, Colorado, and New Mexico to determine personal demographic information, knowledge of …

Experimental Research On Contests, Roman M. Sheremeta

ESI Working Papers

Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants’ efforts are significantly higher than predicted by the standard Nash equilibrium. Despite overbidding, most comparative static predictions, such as the incentive effect, the size effect, the discouragement effect and others are supported in the laboratory. In addition, experimental studies examine various contest structures, including dynamic contests (such as multi-stage races, wars of attrition, tug-of-wars), multi-dimensional contests (such as Colonel Blotto games), and contests between groups. This article provides a short review …

The Economic Impact Of The 2018 Spartan Race On The West Virginia Economy, Christiadi, John Deskins

Bureau of Business & Economic Research

No abstract provided.

West Virginia Economic Outlook 2019-2023, Brian Lego, John Deskins, Eric Bowen, Christiadi, Michelle Atkinson

Bureau of Business & Economic Research

West Virginia’s economy enjoyed its strongest year of growth in nearly a decade during 2017, emerging from several years of severe economic weakness. Most of the bounce back in the state’s economy is connected to the energy sector, not only from the increased production of coal and natural gas but also as a result of a massive build-out of new natural gas pipeline infrastructure throughout the state. Growth has broadened to include more of the state’s regions over the past year or so, but the overall magnitude of gains in jobs and output have remained concentrated in just a few …

Black Gold In A Changing World: An Examination Of Saudi Arabia’S Dependence On Oil And The Possibility Of A Solar Energy Transition, Sofia Mouritsen

Independent Study Project (ISP) Collection

This paper examines Saudi Arabia’s dependence on oil, considering the profound effects that the resource has on the domestic, socioeconomic, and international affairs of the Kingdom. It is determined, after examining the economic and environmental factors that make it necessary, that Saudi Arabia must reduce its dependence on oil and diversify its economy, ideally by pursing solar energy. This conclusion is reached by considering Saudi Arabia’s domestic challenges, which include unemployment and rising domestic energy demand, as well as factors such as the price volatility of oil and changing global energy trends. A Saudi transition to solar power is determined …

Productivity, Competition, And Empowerment? The Experience Of Pondicherry Fisherwomen In The Context Of Neoliberal Development, Amelia Colliver

Independent Study Project (ISP) Collection

The subject of this study is female fisherwomen from the fishing village of Veerampattinam in Tamil Nadu who have experienced impacts of neoliberal economics in India. Neoliberalism is here defined as a political economic movement that determines the viability of both an individual and a government based on its economic productivity. Populations reliant on traditional livelihoods are not as efficient as mechanized sectors of their industry, and therefore they are often separated from easy access to their livelihoods by neoliberal policies. This is especially true for women, who are frequently left behind in neoliberalism because their work is considered less …

Causal Versus Consequential Motives In Mental Models Of Agent Social And Economic Action: Experiments, And The Neoclassical Diversion In Economics, Vernon L. Smith

ESI Working Papers

"In this paper I want to begin with the neoclassical supply and demand model of markets (SDM), whose static equilibrium consequences predicted outcomes far more accurately than were anticipated in laboratory experimental tests of the theory actuated by Jevons (1862, 1871; Smith, 1962). The observed predictive accuracy of SDM was not anticipated because complete information on supply and demand was widely believed, thought and taught to be a necessary condition for finding equilibrium. 1 Jevons’ model required him to have complete information in any particular market, as he only articulated a model of market optimal outcomes, and no model of …

The Distribution Of Information And The Price Efficiency Of Markets, Brice Corgnet, Mark Desantis, David Porter

ESI Working Papers

Apparently contradictory evidence has accumulated regarding the extent to which financial markets are informationally efficient. Shedding new light on this old debate, we show that differences in the distribution of private information may explain why informational efficiency can vary greatly across markets. We find that markets are informationally efficient when complete information is concentrated in the hands of competing insiders whereas they are less efficient when private information is dispersed across traders. A learning model helps to illustrate why inferring others’ private information from prices takes more time when information is more dispersed. We discuss the implications of our findings …