Other Economics Commons^™

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 ...

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 ...

A Theory Of Conservative Revivals, Murat Iyigun, Jared Rubin, Avner Seror

ESI Working Papers

Why do some societies fail to adopt more efficient political and economic institutions in response to changing economic conditions? And why do such conditions sometimes generate conservative ideological backlashes and, at other times, progressive social and political movements? We propose an explanation that highlights the interplay--or lack thereof--between productivity, cultural beliefs and institutions. In our model, production shocks that benefit one sector of the economy may induce forward-looking elites to provide public goods associated with a different, more traditional sector that benefits their interests. This investment results in more agents generating cultural beliefs complementary to the provision of the ...

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.

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 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 ...

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 ...

Comparison Of Country/Economies At Stage Of Development With Movement In Rankings Of Countries On Global Competitiveness, Pradip K. Shukla, M. P. Shukla, Y. P. Shukla, A. P. Shukla

Business Faculty Articles and Research

With close to 200 countries in the world today, these countries are at various stages of development from less developed to more develop; these stages are often labeled in a rising numerical sequence such as Stage 1 to 3. Countries in the world compete in a global economy to benefit their domestic firms and citizens. As countries move to a higher stage of economic development they offer more global competitiveness for global businesses seeking new markets for sales, offshore outsourcing, and investments.

“The World Economic Forum is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business ...

Big Data In Economics, Matthew Harding, Jonathan Hersh

Economics Faculty Articles and Research

Big Data refers to data sets of much larger size, higher frequency, and often more personalized information. Examples include data collected by smart sensors in homes or aggregation of tweets on Twitter. In small data sets, traditional econometric methods tend to outperform more complex techniques. In large data sets, however, machine learning methods shine. New analytic approaches are needed to make the most of Big Data in economics. Researchers and policymakers should thus pay close attention to recent developments in machine learning techniques if they want to fully take advantage of these new sources of Big Data.

Younger Federal District Court Judges Favor Presidential Power, Tom Campbell, Nathaniel T. Wilcox

ESI Working Papers

From 1960 to 2015, Federal District Court opinions involving challenges to Executive Branch authority show that U.S. Federal District Court judges (trial judges) support such authority less as they age, with a sharp decline beginning near age 57. We argue that District judges know that elevation to the Federal Circuit Court of Appeals becomes increasingly improbable, and hence have less reason to ‘cooperate’ with the Executive, with advancing age. Political variables (and other variables) introduced as extra regressors do not reverse our main results. When there are contemporaneous vacancies on their Circuit courts, District judges in the eleven State ...

Partners Or Strangers? Cooperation, Monetary Trade, And The Choice Of Scale Of Interation, Maria Bigoni, Gabriele Camera, Marco Casari

ESI Working Papers

We show that monetary exchange facilitates the transition from small to large-scale economic interactions. In an experiment, subjects chose to play an “intertemporal cooperation game” either in partnerships or in groups of strangers where payoffs could be higher. Theoretically, a norm of mutual support is sufficient to maximize efficiency through large-scale cooperation. Empirically, absent a monetary system, participants were reluctant to interact on a large scale; and when they did, efficiency plummeted compared to partnerships because cooperation collapsed. This failure was reversed only when a stable monetary system endogenously emerged: the institution of money mitigated strategic uncertainty problems.

The Connection Between Race And Performance Of Nba Draft Picks, Jeremiah Mitchell

School of Arts & Sciences Theses

This paper examines the relationship between race and performance in terms of one of the highest forms of efficiency in basketball, field goal percentage, based on college statistics, with regard to draft position, career earnings and NBA win shares.

The Missing Pieces Of The Economic Debate Over Immigration Reform, Exequiel Hernandez

Penn Wharton Public Policy Initiative

To the extent that immigration reform is discussed in terms of economics, the debate tends to focus exclusively on labor issues-specifically, how immigrants affect jobs and wages for native citizens. But to understand the economic effects of immigration, and thus develop sounder policies, policymakers need to consider how immigration affects all three core components of economic growth: not just labor, but capital and innovation too.

In the Penn Wharton Public Policy Brief, "The Missing Pieces of the Economic Debate Over Immigration Reform/whr.tn/2vmKbK8>," Professor Exequiel Hernandez discusses new research showing that immigration produces gains for the U.S ...

The Impact Of Remittances On Education Attainment: Evidence From Dominican Republic, Tahiya Begum

Honors College Theses

This paper will examine the relationship between remittances and education attainment focusing on Dominican Republic in 2002. This study will focus on households in Dominican Republic using surveys from IPUMS international and the data is cross-sectional. Sending remittances increases the income for households, which in return, influences the spending on education. The study of remittances is analyzed in a more cultural and social value rather than entirely economic. The dynamic and structure of a family is crucial when studying the effects of remittances in a developing country. Key findings from this analysis is that the relationship between education attainment and ...

Applied Economics (Clayton), Sheryne Southard, Christie Burton, Bryan Labrecque, Xueyu Cheng, Elnora Farmer

Computer Science and Information Technology Grants Collections

This Grants Collection for Applied Economics was created under a Round Ten ALG Textbook Transformation Grant.

Affordable Learning Georgia Grants Collections are intended to provide faculty with the frameworks to quickly implement or revise the same materials as a Textbook Transformation Grants team, along with the aims and lessons learned from project teams during the implementation process.

Documents are in .pdf format, with a separate .docx (Word) version available for download. Each collection contains the following materials:

• Linked Syllabus
• Initial Proposal
• Final Report

Equilibrium Wage Rigidity In Directed Search, Gabriele Camera, Jaehong Kim

ESI Working Papers

Matching frictions and downward wage rigidity emerge as equilibrium phenomena in a twosided labor market where firms sustain variable wage adjustment costs. Firms post wages to attract workers and matches are endogenous. Reducing the wage relative to the wage previously posted is costly to the firm, where the cost is proportional to the size of the proposed cut. Shocks to the firm’s profitability may yield an equilibrium wage above what the firm would offer absent proportional adjustment costs. Wage cuts can be partial or full, immediate or delayed, and are non-linear in the shock size. Importantly, wages are sticky ...

Moderate Growth With A Stronger Industrial Sector, Eric Thompson

Business in Nebraska

Nebraska will record solid economic growth during the forecast period but will lag U.S. growth. While Nebraska’s large farming sector has stabilized, it will not contribute much to economic growth during the forecast period. Job growth also will be sluggish in transportation, retail trade and state and local government. Job growth, however, will be stronger in the services, finance, manufacturing and construction. Projected growth rates for 2018 to 2020 are presented in Table 1.

Employment will grow by 0.8% to 1.0% per year, below the national rate. Non-farm income will grow between 3.6% and 3 ...

Solar Energy For The Soul: Solving America’S Fuel Poverty Problem With Solar Panels For The Poor, Samantha St. Marie

Honors Theses

In the United States today, at least 14 million Americans live in fuel poverty. These Americans spend at least ten percent of household income on energy costs ranging from fuel to electricity. The purpose of this thesis is to identify an innovative solution to mitigate the effects of the energy affordability crisis in the United States. After examining national trends and researching localized efforts, I determined that solar panels may be able to support the modern energy needs of the fuel poor. The study uses a least squares regression model with fixed effects to determine factors influencing solar adoption at ...