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Social and Behavioral Sciences Commons™
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Articles 541 - 570 of 2930
Full-Text Articles in Social and Behavioral Sciences
Intuitive Solutions In Game Representations: The Shapley Value Revisited, Pradeep Dubey
Intuitive Solutions In Game Representations: The Shapley Value Revisited, Pradeep Dubey
Cowles Foundation Discussion Papers
We show that any transferable utility game can be represented by an assignment of facilities to players, in which it is intuitively obvious how to allocate the total cost of the facilities. The intuitive solution in the representation turns out to be the Shapley value of the game, and thus serves as an alternative justification of the value.
When Salespeople Manage Customer Relationships: Multidimensional Incentives And Private Information, Minkyung Kim, K. Sudhir, Kosuke Uetake, Rodrigo Canales
When Salespeople Manage Customer Relationships: Multidimensional Incentives And Private Information, Minkyung Kim, K. Sudhir, Kosuke Uetake, Rodrigo Canales
Cowles Foundation Discussion Papers
At many firms, incentivized salespeople with private information about customers are responsible for CRM. While incentives motivate sales performance, private information can induce moral hazard by salespeople to gain compensation at the expense of the firm. We investigate the sales performance–moral hazard tradeoff in response to multidimensional performance (acquisition and maintenance) incentives in the presence of private information. Using unique panel data on customer loan acquisition and repayments linked to salespeople from a microfinance bank, we detect evidence of salesperson private information. Acquisition incentives induce salesperson moral hazard leading to adverse customer selection, but maintenance incentives moderate it as salespeople …
Marriage, Labor Supply And The Dynamics Of The Social Safety Net, Hamish Low, Costas Meghir, Luigi Pistaferri, Alessandra Voena
Marriage, Labor Supply And The Dynamics Of The Social Safety Net, Hamish Low, Costas Meghir, Luigi Pistaferri, Alessandra Voena
Cowles Foundation Discussion Papers
The 1996 US welfare reform introduced limits on years of welfare receipt. We show that this reduced program participation, raised employment for single mothers, and reduced divorce. A limited commitment, lifecycle model of labor supply, marriage and divorce, estimated on pre-reform data, replicates these effects. A large part of the responses occur in anticipation of benefit exhaustion, impacting primarily women with low potential earnings. The reform reduces lifetime utility of women, even allowing for the government savings, but has negligible effects on men. The expectation of marriage attenuates the losses for women and an increased probability of single-motherhood raises them.
Marriage, Labor Supply And The Dynamics Of The Social Safety Net, Hamish Low, Costas Meghir, Luigi Pistaferri, Alessandra Voena
Marriage, Labor Supply And The Dynamics Of The Social Safety Net, Hamish Low, Costas Meghir, Luigi Pistaferri, Alessandra Voena
Cowles Foundation Discussion Papers
The 1996 PRWORA reform introduced time limits on the receipt of welfare in the United States. We use variation by state and across demographic groups to provide reduced form evidence showing that such limits led to a fall in welfare claims (partly due to \banking” benefits for future use), a rise in employment, and a decline in divorce rates. We then specify and estimate a life-cycle model of marriage, labor supply and divorce under limited commitment to better understand the mechanisms behind these behavioral responses, carry out counterfactual analysis with longer run impacts and evaluate the welfare effects of the …
Censored Quantile Instrumental Variable Estimation With Stata, Victor Chernozhukov, Iván Fernández-Val, Sukjin Han, Amanda E. Kowalski
Censored Quantile Instrumental Variable Estimation With Stata, Victor Chernozhukov, Iván Fernández-Val, Sukjin Han, Amanda E. Kowalski
Cowles Foundation Discussion Papers
Many applications involve a censored dependent variable and an endogenous independent variable. Chernozhukov et al. (2015) introduced a censored quantile instrumental variable estimator (CQIV) for use in those applications, which has been applied by Kowalski (2016), among others. In this article, we introduce a Stata command, cqiv, that simplifies application of the CQIV estimator in Stata. We summarize the CQIV estimator and algorithm, we describe the use of the cqiv command, and we provide empirical examples.
Competing For Talent, Yuhta Ishii, Aniko Öry, Adrien Vigier
Competing For Talent, Yuhta Ishii, Aniko Öry, Adrien Vigier
Cowles Foundation Discussion Papers
In many labor markets, e.g., for lawyers, consultants, MBA students, and professional sport players, workers get offered and sign long-term contracts even though waiting could reveal significant information about their capabilities. This phenomenon is called unraveling. We examine the link between wage bargaining and unraveling. Two firms, an incumbent and an entrant, compete to hire a worker of unknown talent. Informational frictions prevent the incumbent from always observing the entrant’s arrival, inducing unraveling in all equilibria. We analyze the extent of unraveling, surplus shares, the average talent of employed workers, and the distribution of wages within and across firms.
The Paradox Of Competition: Power, Markets, And Money - Who Gets What, When, How?, Martin Shubik
The Paradox Of Competition: Power, Markets, And Money - Who Gets What, When, How?, Martin Shubik
Cowles Foundation Discussion Papers
Money is a mystery and financial institutions are often regarded as guardians and promoters of the mystery. These sketches are designed to help any reader interested in, but not technically trained in economics, understand markets, money, credit and the evolution of a mass market system set in the rich context of its political environment and society. We all want a good society. What is a good society is given by our joint vision, mutual respect and social concern but the implementation of the vision calls for the use and understanding of money, markets and finance. The efficient functioning of a …
Who Gets What, When, How? Power, Organization, Markets, Money And The Allocation Of Resources, Martin Shubik
Who Gets What, When, How? Power, Organization, Markets, Money And The Allocation Of Resources, Martin Shubik
Cowles Foundation Discussion Papers
Money is a mystery and financial institutions are often regarded as guardians and promoters of the mystery. These sketches are designed to help an individual interested in, but not technically trained in economics, understand markets, money, credit and the evolution of a mass market system embedded in the rich context of its political environment and society. The efficient functioning of a dynamic economy requires the presence of money and financial institutions. The great variety of financial institutions in any advanced economy requires that a synthetic approach is used to understand what the whole looks like. Verbal description provides an overarching …
Regulating Mismeasured Pollution: Implications Of Firm Heterogeneity For Environmental Policy, Eva Lyubich, Joseph S. Shapiro, Reed Walker
Regulating Mismeasured Pollution: Implications Of Firm Heterogeneity For Environmental Policy, Eva Lyubich, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
This paper provides the first estimates of within-industry heterogeneity in energy and CO2 productivity for the entire U.S. manufacturing sector. We measure energy and CO2 productivity as output per dollar energy input or per ton CO2 emitted. Three findings emerge. First, within narrowly de ned industries, heterogeneity in energy and CO2 productivity across plants is enormous. Second, heterogeneity in energy and CO2 productivity exceeds heterogeneity in most other productivity measures, like labor or total factor productivity. Third, heterogeneity in energy and CO2 productivity has important implications for environmental policies targeting industries rather than plants, including technology standards and carbon border …
Regulating Mismeasured Pollution: Implications Of Firm Heterogeneity For Environmental Policy, Eva Lyubich, Joseph S. Shapiro, Reed Walker
Regulating Mismeasured Pollution: Implications Of Firm Heterogeneity For Environmental Policy, Eva Lyubich, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
This paper provides the first estimates of within-industry heterogeneity in energy and CO2 productivity for the entire U.S. manufacturing sector. We measure energy and CO2 productivity as output per dollar energy input or per ton CO2 emitted. Three findings emerge. First, within narrowly defined industries, heterogeneity in energy and CO2 productivity across plants is enormous. Second, heterogeneity in energy and CO2 productivity exceeds heterogeneity in most other productivity measures, like labor or total factor productivity. Third, heterogeneity in energy and CO2 productivity has important implications for environmental policies targeting industries rather than plants, including technology standards and carbon border adjustments.
Random Coefficient Continuous Systems: Testing For Extreme Sample Path Behaviour, Yubo Tao, Peter C.B. Phillips, Jun Yu
Random Coefficient Continuous Systems: Testing For Extreme Sample Path Behaviour, Yubo Tao, Peter C.B. Phillips, Jun Yu
Cowles Foundation Discussion Papers
This paper studies a continuous time dynamic system with a random persistence parameter. The exact discrete time representation is obtained and related to several discrete time random coefficient models currently in the literature. The model distinguishes various forms of unstable and explosive behaviour according to specific regions of the parameter space that open up the potential for testing these forms of extreme behaviour. A two-stage approach that employs realized volatility is proposed for the continuous system estimation, asymptotic theory is developed, and test statistics to identify the different forms of extreme sample path behaviour are proposed. Simulations show that the …
Hybrid Stochastic Local Unit Roots, Offer Lieberman, Peter C.B. Phillips
Hybrid Stochastic Local Unit Roots, Offer Lieberman, Peter C.B. Phillips
Cowles Foundation Discussion Papers
Two approaches have dominated formulations designed to capture small departures from unit root autoregressions. The first involves deterministic departures that include local-to-unity (LUR) and mildly (or moderately) integrated (MI) specifications where departures shrink to zero as the sample size n→∞. The second approach allows for stochastic departures from unity, leading to stochastic unit root (STUR) specifications. This paper introduces a hybrid local stochastic unit root (LSTUR) specification that has both LUR and STUR components and allows for endogeneity in the time varying coefficient that introduces structural elements to the autoregression. This hybrid model generates trajectories that, upon normalization, have non-linear …
Continuous Workout Mortgages: Efficient Pricing And Systemic Implications, Robert J. Shiller, Rafal M. Wojakowski, M. Shahid Ebrahim, Mark B. Shackleton
Continuous Workout Mortgages: Efficient Pricing And Systemic Implications, Robert J. Shiller, Rafal M. Wojakowski, M. Shahid Ebrahim, Mark B. Shackleton
Cowles Foundation Discussion Papers
This paper studies the Continuous Workout Mortgage (CWM), a two in one product: a fixed rate home loan coupled with negative equity insurance, to advocate its viability in mitigating financial fragility. In order to tackle the many issues that CWMs embrace, we perform a range of tasks. We optimally price CWMs and take a systemic market-based approach, stipulating that mortgage values and payments should be linked to housing prices and adjusted downward to prevent negative equity. We illustrate that amortizing CWMs can be the efficient home financing choice for many households. We price CWMs as American option style, defaulting debt …
Finite-Sample Optimal Estimation And Inference On Average Treatment Effects Under Unconfoundedness, Timothy B. Armstrong, Michal Kolesár
Finite-Sample Optimal Estimation And Inference On Average Treatment Effects Under Unconfoundedness, Timothy B. Armstrong, Michal Kolesár
Cowles Foundation Discussion Papers
We consider estimation and inference on average treatment effects under unconfoundedness conditional on the realizations of the treatment variable and covariates. We derive finite-sample optimal estimators and confidence intervals (CIs) under the assumption of normal errors when the conditional mean of the outcome variable is constrained only by nonparametric smoothness and/or shape restrictions. When the conditional mean is restricted to be Lipschitz with a large enough bound on the Lipschitz constant, we show that the optimal estimator reduces to a matching estimator with the number of matches set to one. In contrast to conventional CIs, our CIs use a larger …
Finite-Sample Optimal Estimation And Inference On Average Treatment Effects Under Unconfoundedness, Timothy B. Armstrong, Michal Kolesár
Finite-Sample Optimal Estimation And Inference On Average Treatment Effects Under Unconfoundedness, Timothy B. Armstrong, Michal Kolesár
Cowles Foundation Discussion Papers
We consider estimation and inference on average treatment effects under unconfoundedness conditional on the realizations of the treatment variable and covariates. Given nonparametric smoothness and/or shape restrictions on the conditional mean of the outcome variable, we derive estimators and confidence intervals (CIs) that are optimal infinite samples when the regression errors are normal with known variance. In contrast to conventional CIs, our CIs use a larger critical value that explicitly takes into account the potential bias of the estimator. When the error distribution is unknown, feasible versions of our CIs are valid asymptotically, even when √n-inference is not possible due …
Mentoring And The Dynamics Of Affirmative Action, Michèle Müller-Itten, Aniko Öry
Mentoring And The Dynamics Of Affirmative Action, Michèle Müller-Itten, Aniko Öry
Cowles Foundation Discussion Papers
We analyze the long-term workforce composition when the quality of mentoring available to majority and minority juniors depends on their representation in the workforce. A workforce with ≥ 50% majority workers invariably converges to one where the majority is overrepresented relative to the population. To maximize welfare, persistent interventions, such as group-specific fellowships, are often needed, and the optimal workforce may include minority workers of lower innate talent than the marginal majority worker. We discuss the role of mentorship determinants, talent dispersion, the scope of short-term interventions, various policy instruments and contrast our results to the classic fairness narrative.
Mentoring And The Dynamics Of Affirmative Action, Michèle Müller-Itten, Aniko Öry
Mentoring And The Dynamics Of Affirmative Action, Michèle Müller-Itten, Aniko Öry
Cowles Foundation Discussion Papers
We study the evolution of labor force composition when mentoring is more effective within members of the same socio-demographic type. Typically, multiple steady states exist. Some completely exclude juniors of one type. Even a mixed steady state tends to over-represent the type that is dominant in the population. In contrast, the efficient labor force balances talent recruitment against mentoring frictions. It may even underrepresent the dominant type and typically calls for persistent government intervention. This contrasts with the public discourse around temporary affirmative action. We consider specific policy instruments and show that hiring quotas can induce equilibrium employment insecurity.
Latent Variable Nonparametric Cointegrating Regression, Qiying Wang, Peter C.B. Phillips, Ioannis Kasparis
Latent Variable Nonparametric Cointegrating Regression, Qiying Wang, Peter C.B. Phillips, Ioannis Kasparis
Cowles Foundation Discussion Papers
This paper studies the asymptotic properties of empirical nonparametric regressions that partially misspecify the relationships between nonstationary variables. In particular, we analyze nonparametric kernel regressions in which a potential nonlinear cointegrating regression is misspecified through the use of a proxy regressor in place of the true regressor. Such regressions arise naturally in linear and nonlinear regressions where the regressor suffers from measurement error or where the true regressor is a latent variable. The model considered allows for endogenous regressors as the latent variable and proxy variables that cointegrate asymptotically with the true latent variable. Such a framework includes correctly specified …
Point Optimal Testing With Roots That Are Functionally Local To Unity, Anna Bykhovskaya, Peter C.B. Phillips
Point Optimal Testing With Roots That Are Functionally Local To Unity, Anna Bykhovskaya, Peter C.B. Phillips
Cowles Foundation Discussion Papers
Limit theory for regressions involving local to unit roots (LURs) is now used extensively in time series econometric work, establishing power properties for unit root and cointegration tests, assisting the construction of uniform confidence intervals for autoregressive coefficients, and enabling the development of methods robust to departures from unit roots. The present paper shows how to generalize LUR asymptotics to cases where the localized departure from unity is a time varying function rather than a constant. Such a functional local unit root (FLUR) model has much greater generality and encompasses many cases of additional interest, including structural break formulations that …
Boundary Limit Theory For Functional Local To Unity Regression, Anna Bykhovskaya, Peter C.B. Phillips
Boundary Limit Theory For Functional Local To Unity Regression, Anna Bykhovskaya, Peter C.B. Phillips
Cowles Foundation Discussion Papers
This paper studies functional local unit root models (FLURs) in which the autoregressive coefficient may vary with time in the vicinity of unity. We extend conventional local to unity (LUR) models by allowing the localizing coefficient to be a function which characterizes departures from unity that may occur within the sample in both stationary and explosive directions. Such models enhance the flexibility of the LUR framework by including break point, trending, and multi-directional departures from unit autoregressive coefficients. We study the behavior of this model as the localizing function diverges, thereby determining the impact on the time series and on …
Politics, Hospital Behavior, And Health Care Spending, Zack Cooper, Amanda E. Kowalski, Eleanor Neff Powell, Jennifer Wu
Politics, Hospital Behavior, And Health Care Spending, Zack Cooper, Amanda E. Kowalski, Eleanor Neff Powell, Jennifer Wu
Cowles Foundation Discussion Papers
This paper examines the link between legislative politics, hospital behavior, and health care spending. When trying to pass sweeping legislation, congressional leaders can attract votes by adding targeted provisions that steer money toward the districts of reluctant legislators. This targeted spending provides tangible local benefits that legislators can highlight when fundraising or running for reelection. We study a provision - Section 508 – that was added to the 2003 Medicare Modernization Act (MMA). Section 508 created a pathway for hospitals to apply to get their Medicare payment rates increased. We find that hospitals represented by members of the House of …
Detecting Financial Collapse And Ballooning Sovereign Risk, Peter C.B. Phillips
Detecting Financial Collapse And Ballooning Sovereign Risk, Peter C.B. Phillips
Cowles Foundation Discussion Papers
This paper proposes a new model for capturing discontinuities in the underlying financial environment that can lead to abrupt falls, but not necessarily sustained monotonic falls, in asset prices. This notion of price dynamics is consistent with existing understanding of market crashes, which allows for a mix of market responses that are not universally negative. The model may be interpreted as a martingale composed with a randomized drift process that is designed to capture various asymmetric drivers of market sentiment. In particular, the model is capable of generating realistic patterns of price meltdowns and bond yield inflations that constitute major …
Kernel-Based Inference In Time-Varying Coefficient Cointegrating Regression, Degui Li, Peter C.B. Phillips, Jiti Gao
Kernel-Based Inference In Time-Varying Coefficient Cointegrating Regression, Degui Li, Peter C.B. Phillips, Jiti Gao
Cowles Foundation Discussion Papers
This paper studies nonlinear cointegrating models with time-varying coefficients and multiple nonstationary regressors using classic kernel smoothing methods to estimate the coefficient functions. Extending earlier work on nonstationary kernel regression to take account of practical features of the data, we allow the regressors to be cointegrated and to embody a mixture of stochastic and deterministic trends, complications which result in asymptotic degeneracy of the kernel-weighted signal matrix. To address these complications new \textsl{local} and \textsl{global rotation} techniques are introduced to transform the covariate space to accommodate multiple scenarios of induced degeneracy. Under certain regularity conditions we derive asymptotic results that …
Identification-Robust Subvector Inference, Donald W.K. Andrews
Identification-Robust Subvector Inference, Donald W.K. Andrews
Cowles Foundation Discussion Papers
This paper introduces identification-robust subvector tests and confidence sets (CS’s) that have asymptotic size equal to their nominal size and are asymptotically efficient under strong identification. Hence, inference is as good asymptotically as standard methods under standard regularity conditions, but also is identification robust. The results do not require special structure on the models under consideration, or strong identification of the nuisance parameters, as many existing methods do. We provide general results under high-level conditions that can be applied to moment condition, likelihood, and minimum distance models, among others. We verify these conditions under primitive conditions for moment condition models. …
Dynamic Airline Pricing And Seat Availability, Kevin R. Williams
Dynamic Airline Pricing And Seat Availability, Kevin R. Williams
Cowles Foundation Discussion Papers
Airfares fluctuate over time due to both demand shocks and intertemporal variation in willingness to pay. I develop and estimate a model of dynamic airline pricing accounting for both forces with new flight-level data. With the model estimates, I disentangle key interactions between the arrival pattern of consumer types and scarcity of remaining capacity due to stochastic demand. I show that dynamic airline pricing expands output by lowering fares charged to early-arriving, price-sensitive customers. It also ensures seats for late-arriving travelers with the highest willingness to pay (e.g. business travelers) who are then charged high prices. I find that dynamic …
Estimated Costs Of Contact In College And High School Male Sports, Ray C. Fair, Christopher Champa
Estimated Costs Of Contact In College And High School Male Sports, Ray C. Fair, Christopher Champa
Cowles Foundation Discussion Papers
Injury rates in twelve U.S. men’s college sports and five U.S. boys’ high school sports are examined in this paper. The sports are categorized as “contact” or “non-contact,” and differences in injury rates between the two are examined. Injury rates in the contact sports are considerably higher than those in the non-contact sports and they are on average more severe. Estimates are presented of the injury savings that would result if the contact sports were changed to have injury rates similar to those in the non-contact sports. The estimated college savings are 49,600 fewer injuries per year and 6,000 fewer …
Dynamic Mechanism Design: An Introduction, Dirk Bergemann, Juuso Välimäki
Dynamic Mechanism Design: An Introduction, Dirk Bergemann, Juuso Välimäki
Cowles Foundation Discussion Papers
We provide an introduction into the recent developments of dynamic mechanism design with a primary focus on the quasilinear case. First, we describe socially optimal (or efficient) dynamic mechanisms. These mechanisms extend the well known Vickrey-Clark-Groves and D’Aspremont-Gérard-Varet mechanisms to a dynamic environment. Second, we discuss results on revenue optimal mechanism. We cover models of sequential screening and revenue maximizing auctions with dynamically changing bidder types. We also discuss models of information management where the mechanism designer can control (at least partially) the stochastic process governing the agent’s types. Third, we consider models with changing populations of agents over time. …
Dynamic Airline Pricing And Seat Availability: Evidence From Airline Markets, Kevin R. Williams
Dynamic Airline Pricing And Seat Availability: Evidence From Airline Markets, Kevin R. Williams
Cowles Foundation Discussion Papers
Airfares fluctuate due to demand shocks and intertemporal variation in willingness to pay. I estimate a model of dynamic airline pricing accounting for both sources of price adjustments using flight-level data. I use the model estimates to evaluate the welfare effects of dynamic airline pricing. Relative to uniform pricing, dynamic pricing benefits early-arriving, leisure consumers at the expense of late-arriving, business travelers. Although dynamic pricing ensures seat availability for business travelers, these consumers are then charged higher prices. When aggregated over markets, welfare is higher under dynamic pricing than under uniform pricing. The direction of the welfare effect at the …
Estimated Costs Of Contact In Men's Collegiate Sports, Ray C. Fair, Christopher Champa
Estimated Costs Of Contact In Men's Collegiate Sports, Ray C. Fair, Christopher Champa
Cowles Foundation Discussion Papers
Injury rates in twelve U.S. men’s collegiate sports are examined in this paper. The twelve sports ranked by overall injury rate are wrestling, football, ice hockey, soccer, basketball, lacrosse, tennis, baseball, indoor track, cross country, outdoor track, and swimming. The first six sports will be called “contact” sports, and the next five will be called “non-contact.” Swimming is treated separately because it has many fewer injuries. Injury rates in the contact sports are considerably higher than they are in the non-contact sports and they are on average more severe. Estimates are presented of the injury savings that would result if …
Embedding Cooperation In General-Equilibrium Models, John E. Roemer
Embedding Cooperation In General-Equilibrium Models, John E. Roemer
Cowles Foundation Discussion Papers
Humans cooperate a great deal in economic activity, but our two major models of equilibrium – Walrasian competitive in markets and Nash in games – portray us as only non-cooperative. In earlier work, I have proposed a model of cooperative decision making (Kantian optimization); here, I embed Kantian optimization in general equilibrium models and show that ‘Walras-Kant’ equilibria exist and often resolve inefficiencies associated with income taxation, public goods and bads, and non-traditional firm ownership, which typically plague models where agents are Nash optimizers. In four examples, introducing Kantian optimization in one market – often the labor market – suffices …