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Social and Behavioral Sciences Commons™

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Economic Theory

Selected Works

2017

Articles 1 - 7 of 7

Full-Text Articles in Social and Behavioral Sciences

Response Functions, Carlos Oyarzun, Adam Sanjurjo, Hien Nguyen Aug 2017

Response Functions, Carlos Oyarzun, Adam Sanjurjo, Hien Nguyen

Carlos Oyarzun

We introduce a simple two-period adaptive-learning model to analyze how “primitive” choice behavior affects payoffs in minimal information settings, and then we conduct an experiment to observe how this behavior (thus payoffs) varies across people. Individuals choose between two uncertain payoff distributions, only knowing the support. In the first round they choose one alternative and receive a payoff. In the second round they probabilistically decide whether to choose the same alternative, or to switch. When analyzing the response function, i.e., a mapping from obtained payoffs to the probability of choosing the same alternative in the second round, we find that …

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Trust In Cohesive Communities, Felipe Balmaceda Assoc Prof., Juan Escobar Assistant Professor Jul 2017

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 …

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Crop Residues: The Rest Of The Story, Douglas L. Karlen, Rattan Lal, Ronald F. Follett, John M. Kimble, Jerry L. Hatfield, John A. Miranowski, Cynthia A. Cambardella, Andrew Manale, Robert P. Anex, Charles W. Rice Jun 2017

Crop Residues: The Rest Of The Story, Douglas L. Karlen, Rattan Lal, Ronald F. Follett, John M. Kimble, Jerry L. Hatfield, John A. Miranowski, Cynthia A. Cambardella, Andrew Manale, Robert P. Anex, Charles W. Rice

Douglas L Karlen

Synopsis In the February 15, 2009 issue of ES&T Strand and Benford argued that oceanic deposition of agricultural crop residues was a viable option for net carbon sequestration (43 [4], 1000−1007). In reviewing the calculations and bringing their experience to bear, Karlen et al. argue in this Viewpoint that crop residue oceanic permanent sequestration (CROPS) as envisioned by Strand and Benford will not work. They further propose alternative possibilities in agricultural methods to achieve a net decrease of CO2 emissions.

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Competitive Intensity And Its Two-Sided Effect On The Boundaries Of Firm Performance, Joao Montez, Francisco Ruiz-Aliseda, Michael D. Ryall May 2017

Competitive Intensity And Its Two-Sided Effect On The Boundaries Of Firm Performance, Joao Montez, Francisco Ruiz-Aliseda, Michael D. Ryall

Michael D Ryall

The new perspective emerging from strategy's value-capture stream is that the effects of competition are two-fold: competition for an agent bounds its performance from below, while that for its transaction partners bounds from above. Thus, assessing the intensity of competition on either side is essential to understanding firm performance. Yet, the literature provides no formal notion of "competitive intensity" with which to make such assessments. Rather, some authors use added value as their central analytic concept, others the core. Added value is simple, but misses the crucial, for-an-agent side of competition. The core is theoretically complete, but difficult to interpret …

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I Share, Therefore It's Mine, Donald J. Kochan Apr 2017

I Share, Therefore It's Mine, Donald J. Kochan

Donald J. Kochan

Uniquely interconnecting lessons from law, psychology, and economics, this article aims to provide a more enriched understanding of what it means to “share” property in the sharing economy. It explains that there is an “ownership prerequisite” to the sharing of property, drawing in part from the findings of research in the psychology of child development to show when and why children start to share. They do so only after developing what psychologists call “ownership understanding.” What the psychological research reveals, then, is that the property system is well suited to create recognizable and enforceable ownership norms that include the rights …

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Discretionary Policy And Multiple Equilibria In A New Keynesian Model, Volker Hahn Mar 2017

Discretionary Policy And Multiple Equilibria In A New Keynesian Model, Volker Hahn

Volker Hahn

We show that discretionary policy-making can lead to multiple rational-expectations equilibria where the central bank responds to inflation sentiments, which are not directly related to economic fundamentals. Some equilibria have favorable consequences for welfare, resulting in outcomes superior even to those achieved under timeless-perspective commitment. Moreover, we show that our framework can explain several moments of US data reasonably well. In particular, it provides an alternative explanation for the high degree of inflation persistence found in the data.

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Research And Development Cooperatives And Market Collusion: A Global Dynamic Approach, Jeroen Hinloopen, Grega Smrkolj, Florian Wagener Mar 2017

Research And Development Cooperatives And Market Collusion: A Global Dynamic Approach, Jeroen Hinloopen, Grega Smrkolj, Florian Wagener

Jeroen Hinloopen

We present a continuous-time generalization of the seminal research and development model of d’Aspremont and Jacquemin (Am Econ Rev 78(5):1133–1137, 1988) to examine the trade-off between the benefits of allowing firms to cooperate in research and the corresponding increased potential for product market collusion. Weshow the existence of a solution to the optimal investment problem using a combination of results from viscosity theory and the theory of planar dynamical systems. In particular, we show that there is a critical level of marginal cost at which firms are indifferent between doing nothing and starting to develop the technology.We findthat colluding firms …

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