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Trust In Cohesive Communities, Felipe Balmaceda Assoc Prof., Juan Escobar Assistant Professor 2017 Diego Portales University

Trust In Cohesive Communities, Felipe Balmaceda Assoc Prof., Juan Escobar Assistant Professor

Felipe Balmaceda

This paper studies which social networks maximize trust and welfare when agreements are implicitly enforced. We study a repeated trust game in which trading opportunities arise exogenously and a social network determines the information each player has. We show that cohesive communities, modeled as social networks of complete components, emerge as the optimal community design. Cohesive communities generate some degree of common knowledge of transpired play that allows players to coordinate their punishments and, as a result, yield relatively high equilibrium payoffs. We also show that when news swiftly travel through the network, Pareto efficient networks are minimally connected: the ...


The Renegotiation Of Nafta: A Look At The Potential Consequences Of A 20% Tariff On Mexican Imports, Molly Maier 2017 University of Wyoming

The Renegotiation Of Nafta: A Look At The Potential Consequences Of A 20% Tariff On Mexican Imports, Molly Maier

Honors Theses AY 16/17

The United States' trade policy has changed over the years, and now is potentially returning to a protectionist policy with a renegotiation of the North American Free Trade Agreement. This policy is a response to the growing discontent with free trade agreements because of the increasing unemployment in the manufacturing sector as the result of increased trade. This paper analyzes the potential consequences of a 20% tariff on Mexican imports using a Heckscher-Ohlin Model and a trade surplus model. An alternative policy option of increased government investment in the Trade Adjustment Assistance Program is presented based on the findings of ...


Consequences Of Information Asymmetry On Corporate Risk Management, Howard J. Merrill III 2017 Buffalo State

Consequences Of Information Asymmetry On Corporate Risk Management, Howard J. Merrill Iii

Applied Economics Theses

This paper will demonstrate the impact information asymmetry has on risk management. There is a noticeable impact within the context of consumer credit risk. If a firm is able to recognize this, they can make improved credit decisions that will reduce the consequences. The theoretical impact will be presented while depicting areas of risk management that are susceptible to information asymmetry. We find a direct impact on the development of scoring models, credit policies, and origination volume. These results hold for banks with portfolios consisting of consumer credit products and small business loans. Once known, banks can better tailor their ...


A Process For Field Studies In Behavioral Economics, Victoria Ferraro 2017 University of Rhode Island

A Process For Field Studies In Behavioral Economics, Victoria Ferraro

Senior Honors Projects

Field experiments enable economists to test whether theory adequately captures behavior in natural settings, or whether evidence supports reevaluating the reasoned abstractions comprising the theory. Economics, and social science more generally, has increasingly valued the evidence provided by field studies. These studies typically require a relationship with an external partner site providing the environment for the study, but existent research offers little guidance for developing these relationships and designing procedures for effective collaboration. The purpose of this paper is to provide greater insight into what is necessary to conduct field experiments in economics, particularly behavioral economics in private market settings ...


Exploring Individual’S Explanations Of Economic Mobility Through The Gaze Of Intersectionality, Adam Alexander Broyles 2017 University of Arkansas, Fayetteville

Exploring Individual’S Explanations Of Economic Mobility Through The Gaze Of Intersectionality, Adam Alexander Broyles

Theses and Dissertations

This study looks at whether or not adopting intersectionality as a theoretical framework allows for a better understanding of individual’s explanations of economic mobility, rather than examining variables such as race, gender, and class as mutually exclusive from one another. The reason for this follows from the understanding that race, gender, and class can intersect to create unique views and opinions of the world and how it operates. Using the 2009 PEW Economic Mobility Survey as a secondary data source, I ran statistical regressions and interpreted the results.


Blockholders And Their Effect On Project Value: An Empirical Approach Of Understanding Ownership Concentration And Firm Value Using An Event Study Framework, Xuanming Guo 2017 Bowdoin College

Blockholders And Their Effect On Project Value: An Empirical Approach Of Understanding Ownership Concentration And Firm Value Using An Event Study Framework, Xuanming Guo

Honors Projects

This study uses an event study framework to find the relationship between ownership concentration and project value. I find that project value first increases with ownership concentration when block size, the percentage ownership of the largest blockholder, is smaller than 10%, then declines with ownership concentration when block size gets larger, and finally rises again when block size exceeds 30%. However, my research only suggests an ambiguous relationship between ownership concentration and firm value. Additionally, ownership concentration seems to affect both the timing of market responses and the market’s interpretation of large investment projects.


Modeling Economic Systems As Locally-Constructive Sequential Games, Leigh Tesfatsion 2017 Iowa State University

Modeling Economic Systems As Locally-Constructive Sequential Games, Leigh Tesfatsion

Economics Working Papers

Real-world economies are open-ended dynamic systems consisting of heterogeneous interacting participants. Human participants are decision-makers who strategically take into account the past actions and potential future actions of other participants. All participants are forced to be locally constructive, meaning their actions at any given time must be based on their local states; and participant actions at any given time affect future local states. Taken together, these properties imply real-world economies are locally-constructive sequential games. This study discusses a modeling approach, agent-based computational economics (ACE), that permits researchers to study economic systems from this point of view. ACE modeling principles and ...


Does The Effect Of Driving Distance On Pga/Lpga Tour Earnings Differ Across Genders?, Conner R. Albright 2017 Georgia College and State University

Does The Effect Of Driving Distance On Pga/Lpga Tour Earnings Differ Across Genders?, Conner R. Albright

Georgia College Student Research Events

Since the early 21st century, the game of golf has seen a shift in importance of touch and finesse towards power and distance. Though many studies have observed the effects of individual golf statistics on earnings, none have examined if these effects fluctuate between genders. The purpose of my study is to show male and female professional golfers the effects of hitting the ball far and if their practice time might be better off spent practicing other areas of the game. By using player statistics from the 2015 PGA and LPGA cross sectional data set, this paper will examine if ...


Selecting An Alternative National Banking System Against Fractional Reserve Free Banking: The Greatest Modern Fraud?, Josiah J. Bardy 2017 Liberty University

Selecting An Alternative National Banking System Against Fractional Reserve Free Banking: The Greatest Modern Fraud?, Josiah J. Bardy

Senior Honors Theses

This paper serves as a compilation and analysis of different banking systems with an emphasis on fractional reserve free banking. Contemporary academic literature has debated fractional reserve banking with revisited scrutiny since the 2007–2009 financial crisis. The Austrian School, drawing conclusions from the Austrian business cycle theory, blames central banking for boom-bust economics. One proposed solution, fractional reserve free banking, eliminates the central bank’s control for a purer form of fractional reserve practice; however, this system may be inherently fraudulent and unethical. After completing an economic analysis of the western world’s banking system, this paper then explores ...


17-07 Profitable Horizontal Mergers Without Efficiencies Can Increase Consumer Surplus, Charles J. Thomas 2017 Chapman University

17-07 Profitable Horizontal Mergers Without Efficiencies Can Increase Consumer Surplus, Charles J. Thomas

ESI Working Papers

In a simple model I show consumer surplus can increase after competing sellers consummate a profitable merger that generates no cost savings. This finding contrasts sharply with the conventional wisdom that horizontal mergers without efficiencies must enhance sellers’ market power to be profitable, thereby harming buyers. The model fits industries in which individual buyers conduct distinct procurement contests for which sellers incur costs to participate, say to assess their product’s fit with the buyer’s preferences. Mergers benefit buyers by inducing stronger contest-level entry, echoing common claims from merging parties that their merger is beneficial because it creates a ...


17-06 The Ideological Roots Of Institutional Change, Murat Iyigun, Jared Rubin 2017 University of Colorado

17-06 The Ideological Roots Of Institutional Change, Murat Iyigun, Jared Rubin

ESI Working Papers

Why do some societies fail to adopt more efficient institutions in response to changing economic conditions? And why do such conditions sometimes generate ideological backlashes and at other times lead to transformative sociopolitical movements? We propose an explanation that highlights the interplay--or lack thereof--between new technologies, ideologies, and institutions. When new technologies emerge, uncertainty results from a lack of understanding how the technology will fit with prevailing ideologies and institutions. This uncertainty discourages investment in institutions and the cultural capital necessary to take advantage of new technologies. Accordingly, increased uncertainty during times of rapid technological change may generate an ideological ...


17-08 The Cultural Transmission Of Trust Norms: Evidence From A Lab In The Field On A Natural Experimen, Jared Rubin, Elira Karaja 2017 Chapman University

17-08 The Cultural Transmission Of Trust Norms: Evidence From A Lab In The Field On A Natural Experimen, Jared Rubin, Elira Karaja

ESI Working Papers

We conduct trust games in three villages in a northeastern Romanian commune. From 1775-1919, these villages were arbitrarily assigned to opposite sides of the Habsburg and Ottoman/Russian border despite being located seven kilometers apart. Russian and Ottoman Öscal institutions were more rapacious than Habsburg institutions, which may have eroded trust of outsiders (relative to co-villagers). Our design permits us to rigorously test this conjecture, and more generally, whether historically institutionalized cultural norms are transmitted intergenerationally. We Önd that participants on the Ottoman/Russian side are indeed less likely to trust outsiders but more likely to trust co-villagers.


Zero Textbook Cost Syllabus For Economics 201 (Macroeconomic Theory), Bettina E. Berch 2017 CUNY Borough of Manhattan Community College

Zero Textbook Cost Syllabus For Economics 201 (Macroeconomic Theory), Bettina E. Berch

Open Educational Resources

This is a zero textbook cost syllabus for teaching macroeconomic theory at the 200 level at a community college. It is designed for a one semester course, using a creative commons textbook and a variety of open source podcasts, newspaper articles, and other materials available to CUNY students.


17-04 Deception And Reception: The Behavior Of Information Providers And Users, Roman M. Sheremeta, Timothy W. Shields 2017 Chapman University

17-04 Deception And Reception: The Behavior Of Information Providers And Users, Roman M. Sheremeta, Timothy W. Shields

ESI Working Papers

We investigate the behavior of information providers (underwriters) and users (investors) in a controlled laboratory experiment where underwriters have incentives to deceive and investors have incentives to avoid deception. Participants play simultaneously as underwriters and investors in one-shot information transmission games. The results of our experiment show a significant proportion of both deceptive and non-deceptive underwriters. Despite the presence of deceptive underwriters, investors are receptive to underwriters’ reports, gleaning information content, albeit overly optimistic. Within our sample, deception by underwriters and reception by investors are the most profitable strategies. Moreover, participants who send deceptive reports to investors, but at the ...


Strategic Ignorance In Sequential Procurement, Silvana Krasteva, Huseyin Yildirim 2017 Texas A & M University - College Station

Strategic Ignorance In Sequential Procurement, Silvana Krasteva, Huseyin Yildirim

Huseyin Yildirim

Should a buyer approach sellers of complementary goods informed or uninformed of her private valuations, and if informed, in which sequence? In this paper, we show that an informed buyer would start with the high-value seller to minimize future holdup. Informed (or careful) sequencing may, however, hurt the buyer as sellers “read” into it. The buyer may commit to ignorance by: overloading herself with unrelated tasks; delegating sequencing to a third party; or letting sellers self-schedule. Absent such commitment, we show that ignorance is not time-consistent for the buyer but it increases trade. Evidence on land assembly supports our findings.


17-03 Targeted Campaign Competition, Loyal Voters, And Supermajorities, Pierre C. Boyer, Kai A. Konrad, Brian Roberson 2017 Université Paris-Saclay

17-03 Targeted Campaign Competition, Loyal Voters, And Supermajorities, Pierre C. Boyer, Kai A. Konrad, Brian Roberson

ESI Working Papers

We consider campaign competition in which candidates compete for votes among a continuum of voters by engaging in persuasive efforts that are targetable. Each individual voter is persuaded by campaign effort and votes for the candidate who targets more persuasive effort to this voter. Each candidate chooses a level of total campaign effort and allocates their effort among the set of voters. We completely characterize equilibrium for the majoritarian objective game and compare that to the vote-share maximizing game. If the candidates are symmetric ex ante, both types of electoral competition dissipate the rents from once in expectation. However, the ...


Media Review: Three Books On A New Economics: A German Perspective, Ulrike Brandhorst 2017 University of Minnesota, Twin Cities

Media Review: Three Books On A New Economics: A German Perspective, Ulrike Brandhorst

Interdisciplinary Journal of Partnership Studies

The first part of this paper presents the ideas of Niko Paech and Christian Felber, two popular exponents of alternative economic models in Germany and Austria. Both authors invoke psychological and behavioral factors, noting that our current economic system is leaving people dependent, unhappy, and dissatisfied, and that this system’s values are contradictory to our constitutional and fundamental values. The book presented in the second part of the paper helps understand this absurdity. It’s Riane Eisler’s The Real Wealth of Nations: Creating a Caring Economics, in which she explains how we can reach an understanding of connections ...


17-02 The Paradox Of Power: Understanding Fiscal Capacity In Imperial China And Absolutist Regimes, Debin Ma, Jared Rubin 2017 London School of Economics

17-02 The Paradox Of Power: Understanding Fiscal Capacity In Imperial China And Absolutist Regimes, Debin Ma, Jared Rubin

ESI Working Papers

Tax extraction in Qing China was low relative to Western Europe. It is not obvious why: China was much more absolutist and had stronger rights over property and people. Why did the Chinese not convert their absolute power into revenue? We propose a model, supported by historical evidence, which suggests that i) the center could not ask its tax collecting agents to levy high taxes because it would incentivize agents to overtax the peasantry; ii) the center could not pay agents high wages in return for high taxes because the center had no mechanism to commit to refrain from confiscating ...


How To Describe Objects?, LIU PENG 2017 Singapore Management University

How To Describe Objects?, Liu Peng

Research Collection School Of Economics

This paper addresses the problem of randomly allocating n indivisible objects to n agents where each object can be evaluated according to a set of characteristics. The planner chooses a subset of characteristics and a ranking of them. Then she describes each object as a list of values according to the ranking of those chosen characteristics. Being informed of such a description, each agent figures out her preference that is lexicographically separable according to the characteristics chosen and ranked by the planner. Hence a description of the objects induces a collection of admissible preferences. We call a description good if ...


A Case Study In Tipping: An Economic Anomaly, Megan Nelson 2017 University of Kansas

A Case Study In Tipping: An Economic Anomaly, Megan Nelson

Crossing Borders: A Multidisciplinary Journal of Undergraduate Scholarship

When dining in a restaurant or having a drink at a bar, do you tip? If yes, what do you base the tip amount on? Is it who you are with? Do men tip more than women? Do you tip less when your actions are masked by a larger group? The answers to these questions are something that economists have struggled to explain. The most difficult question being: Why do people pay an additional amount when they have absolutely no legal obligation to do so? This case study explores the variables that lead to higher or lower tip amounts ...


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