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Rationalizable Implementation In Finite Mechanisms, Yi-Chun CHEN, Takashi KUNIMOTO, Yifei SUN, Siyang XIONG 2020 Singapore Management University

Rationalizable Implementation In Finite Mechanisms, Yi-Chun Chen, Takashi Kunimoto, Yifei Sun, Siyang Xiong

Research Collection School Of Economics

We prove that the Maskin monotonicity condition (by Bergemann, Morris, and Tercieux (2011)) fully characterizes exact rationalizable implementation in an environ-ment with lotteries and transfers. Different from previous papers, our approach possesses many appealing features simultaneously, e.g., infinite mechanisms with no integer game or modulo game are used; no transfer is imposed on any rationalizable profile;the message space is small; the implementation is robust to information perturbationsand continuous in the sense of Oury and Tercieux (2012).


Restricted Probabilistic Fixed Ballot Rules And Hybrid Domains, Shurojit CHATTERJI, Souvik ROY, Soumyarup SADHUKHAN, Arunava SEN, Huaxia ZENG 2020 Singapore Management University

Restricted Probabilistic Fixed Ballot Rules And Hybrid Domains, Shurojit Chatterji, Souvik Roy, Soumyarup Sadhukhan, Arunava Sen, Huaxia Zeng

Research Collection School Of Economics

We study Random Social Choice Functions (or RSCFs) in a standard ordinal mech-anism design model. We introduce a new preference domain called a hybrid domain which includes as special cases as the complete domain and the single-peaked domain. We characterize the class of unanimous and strategy-proof RSCFs on these domains and refer to them as Restricted Probabilistic Fixed Ballot Rules (or RPFBRs). These RSCFs are not necessarily decomposable, i.e., cannot be written as a convex combina-tion of their deterministic counterparts. We identify a necessary and sufficient condition under which decomposability holds for anonymous RPFBRs. Finally, we provide an axiomatic ...


Blockchain Technology And The Future Of Video Games, Is Presence Still Relevant?, Stef Nicovich, Jessica Scheld 2020 University of Lynchburg

Blockchain Technology And The Future Of Video Games, Is Presence Still Relevant?, Stef Nicovich, Jessica Scheld

Atlantic Marketing Association Proceedings

No abstract provided.


An Empirical Study Of The Sentiment Capital Asset Pricing Model, Soroush Ghazi, Mark Schneider 2020 University of Alabama - Tuscaloosa

An Empirical Study Of The Sentiment Capital Asset Pricing Model, Soroush Ghazi, Mark Schneider

ESI Working Papers

What is market sentiment? This paper takes a new approach to this question and de- rives a formula for market sentiment as a function of the risk-free rate, the price/dividend ratio, and the conditional stock market volatility. The formula is derived from a representative agent with a prospect theory probability weighting function. We estimate the model and find that our sentiment measure correlates positively with the leading sentiment indexes. The model matches the equity premium while generating a low and stable risk-free rate with low risk aversion. We also apply the model to explain other anomalies for the aggregate ...


Categorical Salience Theory, Mark Schneider, Cary Deck, Patrick DeJarnette 2020 Chapman University

Categorical Salience Theory, Mark Schneider, Cary Deck, Patrick Dejarnette

ESI Working Papers

Monetary lotteries are the overwhelmingly predominant tool for understanding decisions under risk. However, many real-world decisions concern multidimensional out- comes involving different goods. Recent studies have tested whether people treat multidimensional risky choices in the same manner as unidimensional monetary lotteries and found that choices over consumer goods are less risk-averse and more consistent with expected utility theory than choices over monetary lotteries. While these puzzling results cannot be explained by any standard model of decision making, we demonstrate that these findings are predicted by a salience-based model of category-dependent preferences that also explains the classic anomalies for choices under ...


A Capital Asset Pricing Model With Market Sentiment, Mark Schneider, Manuel A. Nunez 2020 Chapman University

A Capital Asset Pricing Model With Market Sentiment, Mark Schneider, Manuel A. Nunez

ESI Working Papers

We derive a capital asset pricing model with market sentiment from a representative agent that exhibits two basic behavioral biases – ambiguity aversion and positive skewness preference. The asset pricing formula generalizes the classical CAPM by accounting for model uncertainty, positive skewness, disaster risk, and market sentiment, thereby linking four strands of the literature. We apply the Market Sentiment CAPM to provide a unified explanation for the beta anomaly and three other market anomalies, and to predict how they are affected by sentiment. The Market Sentiment CAPM provides a theoretical foundation for the pricing of sentiment in the cross-section of returns.


Comparative Profitability Of Product Disclosure Statements, Anastasia Burkovskaya, Jian Li 2020 University of Sydney

Comparative Profitability Of Product Disclosure Statements, Anastasia Burkovskaya, Jian Li

Economics Working Papers

In insurance industry, product disclosure statements (PDSs) consist of descriptions of uncertain contingencies by the insurance plans (e.g., “hospital coverage”, “dental coverage”, etc.) and are often very different. In this paper, we model PDSs as information partitions of the state space, which can influence how a consumer perceives the structure of her choice problem and hence her deductible choices. We study a model of an insurance company that aims to promote profit by designing the framing of its PDS. We compare the company’s profits under two PDSs, one of which is coarser than the other. Our main results ...


Harnessing The Power Of Social Incentives To Curb Shirking In Teams, Brice Corgnet, Brian C. Gunia, Roberto Hernán González 2020 Chapman University

Harnessing The Power Of Social Incentives To Curb Shirking In Teams, Brice Corgnet, Brian C. Gunia, Roberto Hernán González

ESI Working Papers

We study several solutions to shirking in teams that trigger social incentives by reshaping the workplace social context. Using an experimental design, we manipulate social pressure at work by varying the type of workplace monitoring and the extent to which employees engage in social interaction. This design allows us to assess the effectiveness as well as the popularity of each solution. Despite similar effectiveness in boosting productivity across solutions, only organizational systems involving social interaction (via chat) were at least as popular as a baseline treatment. This suggests that any solution based on promoting social interaction is more likely to ...


Adam Smith’S Theory Of Value: A Mathematical Statement Of His Market Price Discovery Process, Sabiou M. Inoua, Vernon L. Smith 2020 Chapman University

Adam Smith’S Theory Of Value: A Mathematical Statement Of His Market Price Discovery Process, Sabiou M. Inoua, Vernon L. Smith

ESI Working Papers

The relevance of Adam Smith for understanding human morality and sociality is generally accepted; witness the growing interest that his work is stimulating among scholars of various academic backgrounds (philosophers, political theorists, sociologists, economists). But, paradoxically, Adam Smith’s theory of economic value enjoys a less prominent stature today among economists, who, while they view him as the ‘father of modern economics’, considered him more as having had the right intuitions about a market economy than as having developed the right concepts and the technical tools for studying it. Yet the neoclassical tradition failed to provide a satisfactory theory of ...


Working Too Much For Too Little: Stochastic Rewards Cause Work Addiction, Brice Corgnet, Simon Gaechter, Roberto Hernán González 2020 Chapman University

Working Too Much For Too Little: Stochastic Rewards Cause Work Addiction, Brice Corgnet, Simon Gaechter, Roberto Hernán González

ESI Working Papers

People are generally assumed to shy away from activities generating stochastic rewards, thus re-quiring extra compensation for handling any additional risk. In contrast with this view, neurosci-ence research with animals has shown that stochastic rewards may act as a powerful motivator. Applying these ideas to the study of work addiction in humans, and using a new experimental paradigm, we demonstrate how stochastic rewards may lead people to continue working on a re-petitive and effortful task even after monetary compensation becomes saliently negligible. In line with our hypotheses, we show that persistence on the work task is especially pronounced when the ...


The Looming Crisis In Antitrust Economics, Herbert J. Hovenkamp 2020 University of Pennsylvania Law School

The Looming Crisis In Antitrust Economics, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

As in so many areas of law and politics in the United States, antitrust’s center is at bay. It is besieged by a right wing that wants to limit antitrust even more than it has been limited over the last quarter century. On the left, it faces revisionists who propose significantly greater enforcement.

One thing the two extremes share, however, is denigration of the role of economics in antitrust analysis. On the right, the Supreme Court’s two most recent antitrust decisions at this writing reveal that economic analysis no longer occupies the central role that it once had ...


Incorporating Macroprudential Financial Regulation Into Monetary Policy, Aaron Klein 2020 The Brookings Institution

Incorporating Macroprudential Financial Regulation Into Monetary Policy, Aaron Klein

Journal of Financial Crises

This paper proposes two insights into financial regulation and monetary policy. The first enhances understanding the relationship between them, building on the automobile metaphor that describes monetary policy: when to accelerate or brake for curves miles ahead. Enhancing the metaphor, financial markets are the transmission. In a financial crisis, markets cease to function, equivalent to a transmission shifting into neutral. This explains both monetary policy’s diminished effectiveness in stimulating the economy and why the financial crisis shock to real economic output greatly exceeded central bank forecasts.

The second insight is that both excess leverage and fundamental mispricing of asset ...


News-Driven Expectations And Volatility Clustering, Sabiou M. Inoua 2020 Chapman University

News-Driven Expectations And Volatility Clustering, Sabiou M. Inoua

ESI Publications

Financial volatility obeys two fascinating empirical regularities that apply to various assets, on various markets, and on various time scales: it is fat-tailed (more precisely power-law distributed) and it tends to be clustered in time. Many interesting models have been proposed to account for these regularities, notably agent-based models, which mimic the two empirical laws through a complex mix of nonlinear mechanisms such as traders switching between trading strategies in highly nonlinear way. This paper explains the two regularities simply in terms of traders’ attitudes towards news, an explanation that follows from the very traditional dichotomy of financial market participants ...


On The Meaning Of Antitrust's Consumer Welfare Principle, Herbert J. Hovenkamp 2020 University of Pennsylvania Law School

On The Meaning Of Antitrust's Consumer Welfare Principle, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

This brief essay addresses the ambiguities in the meaning of “consumer welfare” in antitrust, exploring the differences between the Williamson, Bork, and current understanding of that term. After weighing the alternatives it argues that the consumer welfare principle in antitrust should seek out that state of affairs in which output is maximized, consistent with sustainable competition


Reversing The Fortunes Of Active Funds, Adi Libson, Gideon Parchomovsky 2020 Bar-Ilan University - Faculty of Law

Reversing The Fortunes Of Active Funds, Adi Libson, Gideon Parchomovsky

Faculty Scholarship at Penn Law

Recent years have witnessed a considerable growth of passive fund at the expense of active funds. This trend picked in 2019, a year that saw passive funds surpass active funds in terms of assets under management. The continuous decline of active funds is a cause for concern. Active funds engage in monitoring of firms and partake of decision-making in companies in their portfolio. The cost of these activities are born exclusively by active funds; the benefits, by contrast, are spread over all shareholders, including passive funds that freeride on the efforts of active funds. The contraction of active funds threatens ...


Assignment Maximization, Mustafa Oguz Afacan, Inácio Bó, Bertan Turhan 2020 Sabanci University

Assignment Maximization, Mustafa Oguz Afacan, Inácio Bó, Bertan Turhan

Economics Working Papers

We evaluate the goal of maximizing the number of individuals matched to acceptable outcomes. We show that it implies incentive, fairness, and implementation impossibilities. Despite that, we present two classes of mechanisms that maximize assignments. The first are Pareto efficient, and undominated, in terms of number of assignments, in equilibrium. The second are fair for unassigned students and assign weakly more students than stable mechanisms in equilibrium. We provide comparisons with well-known mechanisms through computer simulations. Those show that the difference in number of matched agents between the proposed mechanisms and others in the literature is large and significant.


Citizen-Consumers Wanted: Revitalizing The American Dream In The Face Of Economic Recessions, 1981-2012, Gokcen Coskuner-Balli 2020 Chapman University

Citizen-Consumers Wanted: Revitalizing The American Dream In The Face Of Economic Recessions, 1981-2012, Gokcen Coskuner-Balli

Business Faculty Articles and Research

This article brings sociological theory of governmentality to bear on a longitudinal analysis of American presidential speeches to theorize the formation of the citizen-consumer subject. The 40-year historical analysis which expands through four economic recessions and the presidential terms of Ronald Reagan, William J. Clinton, George W. Bush, and Barack Hussein Obama, illustrates the ways in which the national mythology of American Dream myth has been linked to the political ideology of the state to create the citizen-consumer subject in the United States. The quantitative and qualitative analysis of the data demonstrates first, the consistent emphasis on responsibility as a ...


“Once A Lawyer, Now A Security Guard… And Anybody Can Realize How Much It Is Hurting, Right?” The Experiences Of Deskilling Among Skilled, Minoritized Immigrants In Waterloo Region, Southwestern Ontario, Karun Karki 2020 Wilfrid Laurier University

“Once A Lawyer, Now A Security Guard… And Anybody Can Realize How Much It Is Hurting, Right?” The Experiences Of Deskilling Among Skilled, Minoritized Immigrants In Waterloo Region, Southwestern Ontario, Karun Karki

Lyle S. Hallman Social Work Theses and Dissertations

Canadian immigration policy by and large is dominated by attracting the Economic Class immigrants, with a commitment to long-term labour market goals. The employment integration of immigrants, however, shows that many highly educated and skilled immigrants are barred from practicing in their own professions. This study investigated the deskilling experiences of skilled, minoritized immigrants of the Federal Skilled Worker program, residing in Waterloo region, a mid-sized urban centre in Southwestern Ontario. Given that employment is one of the key indicators of immigrant integration, and considering the gaps in the literature, I conducted a mixed-method study that examined the factors contributing ...


Rationally Inattentive Savers And Monetary Policy Changes: A Laboratory Experiment, Andrea Civelli, Cary Deck, Antonella Tutino 2020 University of Arkansas, Fayetteville

Rationally Inattentive Savers And Monetary Policy Changes: A Laboratory Experiment, Andrea Civelli, Cary Deck, Antonella Tutino

ESI Working Papers

We study the response of consumption and saving decisions of rationally inattentive individuals to changes in monetary policy in the laboratory. First, we theoretically characterize the choices of a rationally inattentive agent processing information about the interest rate. Then, we design an experiment with induced inattention to test for the predictions of the model, contrasting them to the full information case. Consistent with the predictions, experimental subjects (a) increase attention when utility gains exceed cognitive costs of tracking the policy rate and decrease savings when their perceived economic outlook deteriorates; (b) respond to Delphic, but not Odyssean, forms of forward ...


All Pay Quality-Bids In Score Procurement Auctions, Dan Kovenock, Jingfeng Lu 2020 Chapman University

All Pay Quality-Bids In Score Procurement Auctions, Dan Kovenock, Jingfeng Lu

ESI Working Papers

In this paper, we study score procurement auctions with all-pay quality bids. A supplier’s score is the difference between his quality and price bids. The supplier with the highest score wins and gets paid his own price bid. The procurer’s payoff is the difference between the winner’s quality and the procurer’s payments to the suppliers. Equilibrium quality and price bids are solved without first obtaining the corresponding equilibrium scores. We find that quality bids, the suppliers’ payoffs and the procurer’s payoff do not depend on whether price bids are made contingent on quality bids. Compared ...


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