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2335 full-text articles. Page 1 of 62.

Lumpy Cost, Lester G. Telser 2017 University of Chicago

Lumpy Cost, Lester G. Telser

Lester G Telser

A lumpy cost function is a step-wise increasing but not a continuous function of output.  It is an accurate description of cost conditions in many industries especially air travel, generating electric power, auto manufacturing and software. This essay has diagrams illustrating the problem and solutions.


Testing The Consistency Of Nested Logit Models With Utility Maximization, Joseph A. Herriges, Catherine L. Kling 2017 Iowa State University

Testing The Consistency Of Nested Logit Models With Utility Maximization, Joseph A. Herriges, Catherine L. Kling

Catherine Kling

The Nested Multinomial Logit (NMNL) model is used extensively in modeling consumer choices among discrete alternatives when the number of alternatives is large. Unfortunately, applied researchers often find that estimated NMNL models fail to meet the Daly-ZacharyMcFadden (DZM) sufficient conditions for consistency with stochastic utility maximization. Borsch-Supan (1990) provides a relaxed set of conditions to test for consistency. While these conditions are increasingly cited, they are seldom tested. This paper corrects and extends BorschSupan's Theorem 2, providing simple necessary conditions on first, second, and third derivatives of choice probabilities and a graph oft he bounds they place on dissimilarity ...


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 ...


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 ...


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 ...


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 ...


Artificial And Natural Risk, Lester G. Telser 2017 University of Chicago

Artificial And Natural Risk, Lester G. Telser

Lester G Telser

Only a lottery can produce artificial risk because it can set the probability of winning. Coin tosses, spinning a roulette wheel, rolling dice cannot determine the exact probability of the random events they generate. Insurance offers payment for the loss due to natural risk that no one can control. Natural risk comes from adverse random events such as death, illness, fire, theft, auto accidents and so on. Insurance companies estimate the probability of these adverse random events from data. They do not set the probability that these events will occur in contrast to the manager of lottery who can set ...


Strategy-Proofness Of The Probabilistic Serial Rule On Sequentially Dichotomous Domains, LIU PENG 2017 Singapore Management University

Strategy-Proofness Of The Probabilistic Serial Rule On Sequentially Dichotomous Domains, Liu Peng

Research Collection School Of Economics

A class of preference domains is proposed: sequentially dichotomous domains. On any sequentially dichotomous domain, the probabilistic serial rule (Bogomolnaia and Moulin (2001)) is sd-strategy-proof. In addition, any sequentially dichotomous domain is maximal for the probabilistic serial rule to be sd-strategy-proof.


17-01 Bubbles In Experimental Asset Markets, Praveen Kujal, Owen Powell 2017 Chapman University

17-01 Bubbles In Experimental Asset Markets, Praveen Kujal, Owen Powell

ESI Working Papers

"One can define a bubble as a persistent increase in the price of an asset over and above its fundamental value with an abrupt fall in prices when no buyers are available to make purchases. The occurrence of market bubbles has a long history, starting with the Dutch Tulip Mania (1624-1637) to the South Sea and Mississippi Bubble (1716-1720), the British Railway Mania (1840´s) to the crash of 1929. Recent events have been the crash of 1987, the dot-com bubble (1990s) to the most recent housing crisis in early 2000. Even though bubbles, and a subsequent crash, may reallocate ...


Fair Division With Uncertain Needs, Jingyi XUE 2017 Singapore Management University

Fair Division With Uncertain Needs, Jingyi Xue

Research Collection School Of Economics

Imagine that agents have uncertain needs and a resource must be divided before uncertainty resolves. In this situation, waste typically occurs when the assignment to an agent turns out to exceed his realized need. How should the resource be divided in the face of possible waste? This is a question out of the scope of the existing rationing literature. Our main axiom to address the issue is no domination. It requires that no agent receive more of the resource than another while producing a larger expected waste, unless the other agent has been fully compensated. Together with conditional strict endowment ...


De Jure And De Facto Institutions – Disentangling The Interrelationships, Jacek Lewkowicz, Katarzyna Metelska-Szaniawska 2016 University of Warsaw

De Jure And De Facto Institutions – Disentangling The Interrelationships, Jacek Lewkowicz, Katarzyna Metelska-Szaniawska

The Latin American and Iberian Journal of Law and Economics

In this paper we contribute to the debate on the nature of institutions and their economic effects by extending the focus to the de jure de facto institutional distinction. Firstly, we define and conceptualize de facto institutions, as well as elaborate on their place in the broad institutional system and identification. Then we investigate the possible interrelationships between de facto and de jure institutions. Finally, we make a link between these interrelationships and economic outcomes. In this way the paper fills an underexploited niche in institutional research, which is a major background for law and economics.

Resumen

En este trabajo ...


Endogenous Differential Information, Sebastián Cea-Echenique, Carlos Hervés-Beloso, Juan Pablo Torres-Martínez 2016 University of Paris 1 Panthéon-Sorbonne

Endogenous Differential Information, Sebastián Cea-Echenique, Carlos Hervés-Beloso, Juan Pablo Torres-Martínez

Juan Pablo Torres-Martínez

We include endogenous differential information in a model with sequential trade and incomplete financial participation. Agents update information through market signals given by commodity prices and asset deliveries. Information acts over admissible strategies and consumption tastes, allowing discontinuities in preferences and choice sets. Therefore, equilibrium may cease to exist. However, internalizing the compatibility between information and consumption through preferences, and without requiring either financial survival assumptions or fully revealing prices, equilibrium existence can be ensured.


16-31 All-Pay Auctions With Ties, Alan Gelder, Dan Kovenock, Brian Roberson 2016 Institute for Defense Analyses

16-31 All-Pay Auctions With Ties, Alan Gelder, Dan Kovenock, Brian Roberson

ESI Working Papers

We study the two-player, complete information all-pay auction in which a tie ensues if neither player outbids the other by more than a given amount. In the event of a tie, each player receives an identical fraction of the winning prize. Thus players engage in two margins of competition: losing versus tying, and tying versus winning. Two pertinent parameters are the margin required for victory and the value of tying relative to winning. We fully characterize the set of Nash equilibria for the entire parameter space. For much of the parameter space, there is a unique Nash equilibrium which is ...


16-32 A Perspective On Electronic Alternatives To Traditional Currencies, Gabriele Camera 2016 Chapman University

16-32 A Perspective On Electronic Alternatives To Traditional Currencies, Gabriele Camera

ESI Working Papers

The institution of money is rapidly evolving thanks to developments in computer-based cryptography. Technological advances have made possible the creation of cost-effective electronic alternatives to banknotes and coins, which are the traditional physical currencies. This document aims to describe — based on scientific literature — the use and characteristics of money, some of the problems associated with issuing a new currency or a new payment instrument, and the possible comparative advantages of a central bank in leading the way relative to private issuers.


16-30 Asymmetric Social Norms, Gabriele Camera, Alessandro Gioffré 2016 Chapman University

16-30 Asymmetric Social Norms, Gabriele Camera, Alessandro Gioffré

ESI Working Papers

Studies of cooperation in infinitely repeated matching games focus on homogeneous economies, where full cooperation is efficient and any defection is collectively sanctioned. Here we study heterogeneous economies where occasional defections are part of efficient play, and show how to support those outcomes through contagious punishments.


Sharing Sequential Values In A Network, Ruben JUAREZ, Chiu Yu KO, Jingyi XUE 2016 Singapore Management University

Sharing Sequential Values In A Network, Ruben Juarez, Chiu Yu Ko, Jingyi Xue

Research Collection School Of Economics

Consider a sequential process where agents have individual values at every possible step. A planner is in charge of selecting steps and distributing the accumulated aggregate values among agents. We model this process by a directed network where each edge is associated with a vector of individual values. This model applies to several new and existing problems, e.g., developing a connected public facility and distributing total values received by surrounding districts; selecting a long-term production plan and sharing final profits among partners of a firm; choosing a machine schedule to serve different tasks and distributing total outputs among task ...


Information, Competition, And The Quality Of Charities, Silvana Krasteva, Huseyin Yildirim 2016 Texas A & M University - College Station

Information, Competition, And The Quality Of Charities, Silvana Krasteva, Huseyin Yildirim

Huseyin Yildirim

Drawing upon the all-pay auction literature, we propose a model of charity competition in which informed giving alone can account for the significant quality heterogeneity across similar charities. Our analysis identifies a negative effect of competition and a positive effect of informed giving on the equilibrium quality of charity. In particular, we show that as the number of charities grows, so does the percentage of charity scams, approaching one in the limit. In light of this and other results, we discuss the need for regulating nonprofit entry and conduct as well as promoting informed giving.


Unequal Exchange In International Trade: A General Model, Andrea Ricci 2016 Università degli Studi di Urbino

Unequal Exchange In International Trade: A General Model, Andrea Ricci

Andrea Ricci

Increasing world inequality and mass migration make the topic of unequal exchange ever more important. Unequal exchange arises when spatial production of value is disjointed from its geographical distribution. The lack of a coherent theoretical framework has limited empirical research on value transfers in trade. This paper aims to overcome this gap. A disaggregated monetary model of world economy with heterogeneous labour, non-specific commodities, and different national production techniques is presented on the grounds of Marx’s labour theory of value. All the different forms of unequal exchange in international trade are explained without incurring the traditional impasses. Estimates of ...


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