Economic Theory Commons^™

Working Paper No. 73, “Placing-Out”: Dealing With Vagrant Children In 19th Century America, Josephine Cannistra

Working Papers in Economics

This inquiry seeks to convince the reader that motivations of 19th century aid societies were not necessarily rooted in the welfare of vagrant children, but rather in the goals of bolstering American agriculture and creating a new generation of farmers out of children that likely would have otherwise proved a direct social and economic burden. While apprenticeships have a long history in the United States, the joining of apprenticeships and indentured labor formed a 19th century system of placing children out into rural homes as contracted workers. This system, as social movement from above, offered economic benefits to farmers and …

Working Paper No. 67, Insights Into Project Cybersyn, Leah Herrera

Working Papers in Economics

This inquiry seeks to establish that back in the 1970s Chile’s “Project Cybersyn” offered novel approaches and specific technologies that appeared to have benefitted capitalism as a system. The Spanish name, SYNCO served as an acronym for Sistema de Información y Control. President Salvador Allende expected that the attributes associated with Project Cybersyn could assist his efforts in implementing his variant of socialism. Cybersyn consisted of a network (Cybernet), software (Cyberstride), computers, a economic simulator known as CHECO, and a control room (Opsroom.) Cybersyn reached an advanced prototype stage; however, its fate was also tied to the interests of the …

Working Paper No. 70, Industrialization, Retail Activities, And The Rise Of American Consumerism, Joseph French

Working Papers in Economics

This inquiry seeks to establish that the department store can be viewed as a novel institution that emerged to facilitate an economic relationship between a burgeoning American industrial sector and a new generation of working-class consumers with rising incomes and changing needs. The development of retail in America lagged behind Europe for many decades, until the rapid pace of American industrialization acted as a catalyst for retail to evolve into a modern institution. Alongside the creation of the department store, American cities were taking to the skies, and those who inhabited them would establish a new socio-economic class that was …

Working Paper No. 71, Max Weber: On Religion And Economic Outcomes, Celeste Aiu Taber

Working Papers in Economics

This inquiry seeks to establish that early sociologist Max Weber advances a view that religious faith could indeed affect economic outcomes. In his analysis of Reformed faiths, Weber determines that “the calling” inspired by Martin Luther transformed the work ethic of believers, instilling in them a spirit suitable for the advancement of modern capitalism. The Reformed work ethic observed by Weber served as a basis for individual Protestants to accumulate wealth. Weber also considers the developments of religious asceticism among the faiths of Calvinism, Pietism, Methodism, and the Baptist movements. The ascetic character of these religious communities assisted in generating …

Working Paper No. 68, Variables Precipitating The Extermination Of The American Bison, Cameron Winterer

Working Papers in Economics

This inquiry seeks to establish that innovations in tanning technology advanced by Europeans in the late 19th century accelerated the destruction of the bison, and subsequently the downfall of bison-reliant indigenous groups of the Great Plains, especially. The North American bison is considered as a crucial natural resource in the plains region of North America. What this inquiry seeks to emphasize is that advancements in technology, coupled with a growing demand for bison hides, contributed to the demise of bison populations. Lastly, this inquiry seeks to examine the near extinction of the plains bison and some of the effects their …

Working Paper No. 72, The 1849 Gold Rush And The Roots Of California’S Economic Development, Matthew Phan

Working Papers in Economics

The Californian Gold Rush, commonly referred to as the “1849 Gold Rush” proved to be a major event which brought significant change to California. This inquiry seeks to establish that this 1849 Gold Rush provided a foundation for a broadly shared prosperity through contributing to the advancement of California’s industry. The first part in this inquiry goes into some detail regarding how the gold rush got initiated, would become a major event for the world. The second part explores what changes the gold rush had brought for California’s industry, economic development, and broadly shared prosperity. The third part explains more …

Working Paper No. 63, On Karl Polanyi And His Conception Of Fascism, Serene Mistkawi

Working Papers in Economics

This inquiry seeks to establish that the writings of author Karl Polanyi offered insights into key variables and historical conditions that gave rise to the system we know of as “fascism.” Integral to his insights, Polanyi describes economic conditions attendant for fascism to emerge, with one condition noted as widespread and persistent unemployment. Polanyi stresses that fascism needs to be understood as reactionary, a responding to features integral to classical liberalism. Considering a broad historical context Polanyi teaches us of the political conditions necessary for fascism to emerge and take form as political movements wielding power. He considers conflicts in …

Optimal Patent Licensing—Two Or Three-Part Tariff, Swapnendu Banerjee, Arijit Mukherjee, Sougata Poddar

Economics Faculty Articles and Research

We look into technology transfer by an insider patentee in a spatial duopoly model under three types of licensing contracts—(i) two-part tariff with fixed fee and per-unit royalty, (ii) two-part tariff with fixed fee and ad-valorem royalty and (iii) general three-part tariff with fixed fee, per-unit and ad-valorem royalties. Under two-part tariff contracts, the licenser is better off with the per-unit royalty contract but the general contract does better than the other contracts. In contrast to the existing literature, all three licensing contracts may make the consumers worse-off compared to no licensing, with the lowest consumer surplus achieved under the …

Essay In Bayesian Econometrics, Loren P. Wagner

Theses and Dissertations

Bayesian Econometrics is not as popular as the more common frequentists methods. However, there are problems that Bayesian methods can handle that are not amenable to frequentists methods. The essays to follow show two such applications where Bayesian methods offer solutions to problems posed in widely different areas of economics. In the first essay, the predictive posterior distribution is used to calculate a number of economic quantities that often require extensive work arounds using frequentist methods. In the second essay, it is shown that Bayesian estimation techniques can handle situations wherein an independent variable exhibits no variability, a situation that …

An Analysis Of Uk Swap Yields, Tanweer Akram, Khawaja Mamun

WCBT Working Papers

John Maynard Keynes argued that the central bank influences the long-term interest rate through the effect of its policy rate on the short-term interest rate. However, Keynes’s claim was confined to the behavior of the long-term government bond yield. This paper investigates whether Keynes’s claim holds for the yields of spread products and over-the-counter financial derivatives by econometrically modeling the dynamics of the pound sterling–denominated longterm interest rate swap yield. It uses the generalized autoregressive conditional heteroskedasticity (GARCH) modeling approach to examine the relationship between the month-over-month changes in the short-term swap yield and the month-over-month change in the long-term …

A Comparison Of M&T Bank And Citizens Bank Net Income Changes During The Coronavirus Pandemic, Alex R. Glasier

Applied Economics Theses

The COVID-19 pandemic had a tremendous impact on every aspect of life, particularly within the world of banking & finance. All banks saw sharp drops in their stock prices and net income, but my hypothesis is that larger, more established banks maintained more stability during 2020 than smaller banks. This paper analyzes the income statements and balance sheets of M&T Bank (an older, more well-established bank) and Citizens Bank (a less-established bank) during this difficult time.

The first part of my thesis describes similarities and differences between M&T Bank and Citizens Bank. I explain how these similarities and differences may …

Predictive Mind Reading From First And Second Impressions: Better-Than-Chance Prediction Of Cooperative Behavior, Eric Schniter, Timothy W. Shields

ESI Working Papers

Could cooperation among strangers be facilitated by adaptations that use sparse information from first and second impressions to accurately predict cooperative behavior? If so, does more of this information lead to more accurate predictions? We hypothesize that predictions are influenced by stereotypes, descriptions, appearance, and contextualized behavioral history available for first and second impressions. We also hypothesize that predictions improve when more information is available. We conducted a two-part study. First, we recorded thin-slice videos of university students just before their choices in a repeated Prisoner’s Dilemma (PD) with matched partners. Second, a worldwide sample of raters evaluated each player …

A Welfare Comparison Of Historical Cost And Fair Value Accounting Regimes, Palmer Edholm

All Graduate Plan B and other Reports

With ongoing controversy concerning fair value and historical cost accounting, existing accounting theory is focused on intra-firm decision making and is thus deficient in addressing the issue of maximizing social welfare. I propose models of historical cost and fair value accounting regimes which are embedded in models of monopoly and oligopoly. This allows for social welfare implications. I find that historical cost results in greater expected profits for both monopolists and oligopolists. However, if the market is elastic enough, a fair value regimes is welfare enhancing. Whereas, if the market is inelastic enough, historical cost is welfare enhancing.

Voting Rules And Properties, Zhuorong Mao

Undergraduate Honors Theses

This thesis composes of two chapters. Chapter one considers the higher order of Borda Rules (Bp) and the Perron Rule (P) as extensions of the classic Borda Rule. We study the properties of those vector-valued voting rules and compare them with Simple Majority Voting (SMV). Using simulation, we found that SMV can yield different results from B1, B2, and P even when it is transitive. We also give a new condition that forces SMV to be transitive, and then quantify the frequency of transitivity when it fails.

In chapter two, we study the `protocol paradox' of approval voting. In approval …

Contingent Payments In Procurement Interactions - Experimental Evidence, Matthew J. Walker, Jason Shachat, Lijia Wei

ESI Working Papers

A chief objective of creating competition among suppliers is the procurement of higher quality goods and services at lower prices. When procuring non-standard goods, it is often difficult to write a complete specification of desired quality in the contract. A moral hazard arises when this quality is costly and determined by the supplier ex post to contracting. In an effort to mitigate this moral hazard, we introduce a correlated contingent payment contract. This contract is awarded through competitive bidding. The winning supplier’s payment is, according to a fixed probability, either the amount of their bid or a quality contingent amount …

The Penn Effect And Marx's International Law Of Value: A Review Of Value And Unequal Exchange By Andrea Ricci, Giuseppe Quattromini

Markets, Globalization & Development Review

Placing itself in the revival of interest in unequal exchange, Ricci's book claims the need to give the theory a new conceptual foundation to justify recent proposals to estimate unequal exchange on the basis of the so-called Penn effect. In order to do that, Ricci identifies Marx's international law of value as a fitting theoretical framework and hence develops a radically innovative theory of global capitalist exploitation through international trade. Finally, he assesses the magnitude of unequal exchange over the past three decades by producing estimates based on the proposed approach.

Prolegomena To A Buddhist(Ic) Critique Of Capitalism, James Mark Shields

Faculty Contributions to Books

Not even three decades removed from Francis Fukuyama’s post-Cold War proclamation of the “End of History,” the Western world is now undergoing a crisis of conscience – at the very least – with respect to both capitalism as an economic system and neoliberalism as its less-recognized but ever-present ideological foundation. The financial crisis of 2008, the subsequent Great Recession, the Occupy movement(s) of 2011, the 2016 challenge of self-styled Democratic Socialist Senator Bernie Sanders for the Democratic nomination, and growing anxiety about the fate of the planet, particularly among the young, have opened up new avenues of critique, and brought …

Maskin Meets Abreu And Matsushima, Yi-Chun Chen, Takashi Kunimoto, Yifei Sun, Siyang Xiong

Research Collection School Of Economics

The theory of full implementation has been criticized for using integer/modulo games, which admit no equilibrium (Jackson (1992)). To address the critique, we revisit the classical Nash implementation problem due to Maskin (1977, 1999) but allow for the use of lotteries and monetary transfers as in Abreu and Matsushima (1992, 1994). We unify the two well-established but somewhat orthogonal approaches in full implementation theory. We show that Maskin monotonicity is a necessary and sufficient condition for (exact) mixed-strategy Nash implementation by a finite mechanism. In contrast to previous papers, our approach possesses the following features: finite mechanisms (with no integer …

Unfair Commercial Practices In A Pit Market: Evidence From An Artefactual Field Experiment, Francesco Bogliacino, Rafael Charris, Cristiano Codagnone, Frans Folkvord, Felipe Montealegre, Francisco Lupiáñez-Villanueva

ESI Publications

Commercial practices such as drip pricing, reference pricing and best-price guarantee can be used to set higher prices and mislead consumers, but protective measures can restore efficiency. In a placebo-controlled market experiment, we examined a treatment allowing for the use and misuse of commercial practices. Three additional treatments tested the effects of formal sanctions, informal sanctions and a regret nudge. We found that commercial practices led to higher prices, cheating was systematic and regret nudging was ineffective. Furthermore, formal and informal sanctions reduced both the likelihood of using commercial practices and the likelihood of cheating, leading to welfare increases.

Litigation With Negative Expected Value Suits: An Experimental Analysis, Cary Deck, Paul Pecorino, Michael Solomon

ESI Working Papers

The existence of lawsuits providing plaintiffs a negative expected value (NEV) at trial has important theoretical implications for signaling models of litigation. The signaling equilibrium possible absent NEV suits breaks down with NEV suits because plaintiffs do not have a credible threat to proceed to trial undermining the ability to signal type. Using a laboratory experiment, we analyze behavior with and without the possibility of NEV suits. Absent NEV suits, behavior largely follows predicted patterns. However, the possibility of NEV suits does not cause the signaling equilibrium to unravel and does not cause the dispute rate to increase. Plaintiffs only …