Economics Commons^™

Honest Abe Or Doc Holliday? Bluffing In Bargaining, Gregory Deangelo, Bryan C. Mccannon

Economics Faculty Working Papers Series

We consider a bargaining environment where there is asymmetric information regarding whether the two players have common preferences or conflicting preferences. If the cost of strategic communication is independent of the state, then signaling is not expected to be effective. If the uninformed agent believes, though, a (cheap‐talk) signal has been sent, then the informed agents are incentivized to engage in deceptive bluffing. Alternatively, if bluffing is not too prevalent, honest communication can be worthwhile. We explore this theoretically and experimentally. We present a bargaining model where state‐dependent mixed strategies arise as equilibria. Thus, bluffing occurs in equilibrium. In the …

The Economics Of Sportsmanship, Clair Smith

Economics Faculty/Staff Publications

Cheaters never win and winners never cheat. Most children have heard this simple admonition at some point. It is truly unfortunate that it is not true. Sometimes athletes cheat and win, at least for a while. But it is rarely a good long-term strategy. And given the desire to win evident in athletes at all levels, maybe we should not be surprised at the occasional act of cheating, but rather at the rampant cooperation and sportsmanship that in fact transpires each day in professional sports stadium, high school and college facilities, and parks and sandlots across America. In this essay, …

The Effects Of Alcohol Use On Economic Decision Making, Klajdi Bregu, Cary Deck, Lindsay Ham, Salar Jahedi

ESI Working Papers

It is notoriously hard to study the effect of alcohol on decision making, given the selection that takes place in who drinks alcohol and when they choose to do so. In a controlled laboratory experiment, we study the causal effect of alcohol on economic decision making. We examine the impact of alcohol on the following types of tasks: math and logic, uncertainty, overconfidence, strategic games, food choices, anchoring, and altruism. Our results indicate that alcohol consumption, as measured by the blood alcohol concentration (BAC), increases cooperation in strategic settings and altruism in Dictator games. We do not find any effects …

The Foreign Corrupt Practices Act And The Price, Volume, And Termination Rate Of Cross-Border Mergers And Acquisitions, Natalie M S Duncombe

Undergraduate Economic Review

Congress enacted the Foreign Corrupt Practices Act (FCPA) in 1977. It has since become an important factor in American firms decision-making in acquiring foreign targets, but its economic impact has gone largely unexamined. I analyze the influence of the risk of an enforcement action under the FCPA on the prices of cross-border mergers and acquisitions (CBMA). In a sample of 13,002 CBMA deals by American acquirers from 1996-2010, I find statistically significant results, suggesting that firms pay on average 3.9 – 5.1% less to acquire targets in countries with higher risk of attention from the FCPA.

Optimal Tilts, Malcom Baker, Terence C. Burnham, Ryan Taliaferro

ESI Working Papers

We examine the optimal weighting of four characteristic tilts in US equity markets over the period from 1968 through 2014. We define a “tilt” as a positive-Sharpe-ratio, characteristicbased portfolio strategy that requires relatively low annual turnover and a “trade” as a characteristic-based portfolio strategy that requires relatively high annual turnover and liquidity demands. Size is a tilt, because of its very low turnover; high frequency reversal is a trade. This dichotomy is necessary to make practical use of Fama-French style factor regressions. Unlike low-turnover tilts, a full history of transaction costs and an estimate of capacity is critical to determine …

Geopolitics Of The 2015 British Defense White Paper And Its Historical Predecessors, Bert Chapman

Libraries Faculty and Staff Scholarship and Research

On November 23, 2015 the United Kingdom (UK) released a defense white paper detailing its national security strategic objectives. This work examines the geopolitical, economic, and strategic implications of this document and compares it with recent and historical defense white paper documents issued by the British government. It scrutinizes the text of these documents and relevant scholarly literature analyzing them while also examining the national security threats facing the UK at the time of their issuance and assesses whether the 2015 document will be supported with requisite political will, military personnel, and financial support to carry out its objectives

The Importance Of Traveler Spending On Locally Produced Goods And Services, Kara Grau, Norma P. Nickerson

Institute for Tourism and Recreation Research Publications

While a growing tourism industry is beneficial to the state, it is important that the industry grows in a way that is sustainable and desirable to the local people. One component of sustainability is the economic contribution made to the state while at the same time benefitting the local community by reducing the leakages of money. The results of this study showed that visitors who purchased ‘made in Montana’ products, items at local farmer’s markets, and who used local guides spent $184.76 more than those visitors who did not purchase those products and services. This significant difference in spending between …

Development And Pilot-Testing Of A Patient Decision Aid For Left Ventricular Assist Device Placement, Kristin Kostick, Estevan D. Delgado, Lidija A. Wilhelms, Courtenay R. Bruce, Jerry D. Estep, Matthias Loebe, Charles Minard, Jennifer S. Blumenthal-Barby

The VAD Journal

Objectives: This paper describes the development methodology and pilot-testing of a decision aid for Left Ventricular Assist Device (LVAD) placement, combining traditional needs-assessment with a novel user-centered approach.

Background: Studies indicate suboptimal patient understanding of the capabilities, lifestyle implications, and risks of LVAD therapy.

Methods and Results: We developed the decision aid in line with the Ottawa Decision Support Framework (ODSF) and the International Patient Decision Aids Standards (IPDAS) for ensuring quality, patient-centered content. Structured interviews were conducted with patients, caregivers, candidates for LVAD treatment, and expert clinicians (n=71) to generate content based on patient values and …

Ipo Markets In Asia Financial Centers : How The Different Ipo Locations Affect Firms’ Stock Prices, Yuanzhen Jiang

Lingnan Journal of Banking, Finance and Economics

For most of non-listed corporations when they are confronting the issues of cutting capital cost, to increase the base of their investors, to develop the firm business quicker, or even to diversify the pool of investors, one of the most important alternatives that the executives and shareholders of these corporations may think is to do IPO (Initial Public Offering); which could be done in the domestic or in the foreign IPO markets. This paper firstly introduces the situation and differences among different IPO markets in Asia major financial centers that includes Mainland China, Hong Kong and Singapore. Then it will …

Should Hong Kong Maintain A Linked Exchange Rate System?, Hoi Yin Tsoi

Lingnan Journal of Banking, Finance and Economics

The linked exchange rate was implemented in 1983. This paper finds that over these 32 years, this system did bring lots of benefits to Hong Kong. Nevertheless, as Hong Kong is a vastly different place now relative to what it was 32 years ago, the costs for the adoption of the link outweigh the benefits so this system is no longer suitable for Hong Kong. It is suggested that in order to serve the best interest of Hong Kong, it should not maintain the linked exchange rate system and should switch to the managed floating exchange rate system.

Empirical Study : Shanghai-Hong Kong Stock Connection Sign Of Efficiency Improvement?, Ming Cheung Fok

Lingnan Journal of Banking, Finance and Economics

Stock market connection encourages local corporations cross-listing in overseas stock markets which will, theoretically, enhance the information flow between countries and the stock market efficiency. In view of a closed economy like China and a free economy like Hong Kong, the announcement of Shanghai-Hong Kong stock connection program seems to be a great opportunity for testing the well-known Efficiency Market Hypothesis (EMH). Employing Capital Asset Pricing Model (CAPM) and the random walk model suggested by previous studies, this paper will present the comparison of market performance before and after the connection as evidences for the hypothesis testing.

An Empirical Analysis Of Factors Influencing China's Real Estate Prices-Based On The Var Model, Pan Xiao

Lingnan Journal of Banking, Finance and Economics

The real estate industry has an increasingly significant position in our national economy. It is important for real estate investment and national macro-control to analyze the main factors that affect its prices, in order to predict its future movements. In this paper, the dynamic econometric analysis method was used to analyze these macroeconomic factors that influence the real state prices on a empirical research. And the results show that the expected prices of real estate, money supply, real estate development investment and household income are the dominant factors influencing them.

Factors In The Returns On Stock : Inspiration From Fama And French Asset Pricing Model, Yuanzhen Jiang

Lingnan Journal of Banking, Finance and Economics

Under the inspiration of Fama and French asset pricing model, this paper mainly studies the relationship between the month return of A shares and the factors that may have an effect on the stocks’ month return. It also compares the differences in the reaction of all shares and GEM board shares to these factors. It is important to highlight that these factors include the market, firm size, earnings and book-to-market information. The data used in this project comes from the quarterly data of China stock market from March of 2000 to December of 2011 and was used in panel model …

Flexible Censored Interval Regression With Experimental Applications, Daniel Walton, James Mcdonald

Journal of Undergraduate Research

Interval censored data, or grouped data, appears in well-established measurement techniques employed in many economic situations, including experimental economics. Estimation of parameters of models using these data de- pends critically on the model specification and method of estimation. Some methods can yield inconsistent and biased estimators when the distributional assumption of the model is misspecified. Our approach using partially adaptive estimation methods with flexible probability distributions mitigates such issues, including in the presence of heteroskedasticity (nonconstant variance in the explanatory variables) and skewness. In addition, we show that partially adaptive estimation applied in such settings increase the accuracy of estimates …

A Macroeconomic Model For Dynamic Tax Scoring Analyzing Income Tax Cuts, Evan Magnusson, Richard Evans

Journal of Undergraduate Research

The goal of this project was to analyze the consequences of income tax cuts on government revenues. We did so using a large overlapping generations (OLG) model. This model was calibrated to closely match the distribution of labor, income, and wealth in the U.S. economy across both heterogeneous age and ability groups. By using a dynamic model, we were able to take into account the macroeconomic feedback effects that are absent from some analyses of tax proposals. We found that while our income tax cut was not completely self-financing, about forty three percent of a ten percent decrease in the …

Quantile Treatment Effects With Endogeneity: A Monte Carlo Comparison Of 3 Quantile Iv Estimators, Alexander Poulsen, Brigham Frandsen

Journal of Undergraduate Research

Quantile instrumental variables estimators are a relatively new development in the econometric literature. Modern quantile regression was introduced in Koenker and Basset (1978), and has been used in many important applications in which researchers are interested in learning about the effects of variables on the distribution of an outcome variable, rather than just mean effects. Examples of these applications include changes in U.S. wage structure (Buchinsky 1994), the effect of school quality on student performance (Eide and Showalter 1998), and the relationship between innovation and firm growth (Coad and Rao 2008).

The Distributional Effects Of Redistributional Tax Policy: A Dynamic Tax Scoring Model, Isaac Swift, Kerk Phillips

Journal of Undergraduate Research

In 2013 French economist Thomas Piketty, one of the leading experts on inequality, published a book titled Capital in the Twenty-First Century. This book quickly became a bestseller and received worldwide attention. In his book Piketty described data that he had carefully collected on income and wealth inequality over a few hundred years. From the data he noted that inequality has been on the rise in the U.S. for the last forty years, and he predicted it would continue to rise. He gave several policy proposals to combat this inequality. Among these proposals was a progressive wealth tax. My …

Market Implications Of Hidden Orders In The Nasdaq Order Book, Robert Buss, Dr. Scott Condie

Journal of Undergraduate Research

In recent years, high frequency trading has increased trade volume significantly. High frequency traders employ various algorithms in order to maximize their individual profit. Supporters of high frequency trading claim that high frequency traders provide the market with more liquidity, while opponents assert that such trading strategies make the market more unstable. Because high frequency trading is a relatively new phenomenon, academic research has not yet thoroughly investigated and modeled how markets currently behave. Additional research will allow policy makers to better understand what types of behavior are occurring in the markets and asses what effects they have in order …

State Of The U.S. Ocean And Coastal Economies: Coastal States Summaries - 2016 Update, Kildow, Charles S. Colgan

Publications

This publication contains two-page ocean and coastal economic summary reports for each of the 30 coastal states with data complementing the Center for the Blue Economy/National Ocean Economics Program latest State of the U.S. Ocean and Coastal Economies - Update 2016 report.

State Of The U.S. Ocean And Coastal Economies 2016 Update, Dr. Judith T. Kildow, Charles S. Colgan, Pat Johnston

Publications

Relative to the landmass of coastal regions, America’s coasts and oceans contribute a disproportionately high value to the United States economy. For the past fifteen years, the National Ocean Economics Program (NOEP) has compiled time-series data that track multiple indicators for economic activities, demographics, natural resource production and values, non-market values, and federal expenditures in the U.S. coastal zone on land and in the water. On our website (www.oceaneconomics.org), government agencies, academia, industry, advocacy groups and the general public representing more than 40 nations— have had interactive access to this information and used it widely for many different purposes.

This …

Market Matters: How Market-Driven Is 'The Newsroom'?, Patrick Ferrucci, Chad Painter

Communication Faculty Publications

This study examines whether the award-winning news show The Newsroom depicted on HBO practices what John McManus defined as market-driven journalism. McManus posited that organizations practicing market-driven journalism compete in the four markets he describes in his market theory for news production. This study found that The Newsroom depicts an organization that does indeed practice market-driven journalism, with results interpreted through the lens of market theory for news production.

Rhode Island Current Conditions Index -- February 2016, Leonard Lardaro

The Rhode Island Current Conditions Index

No abstract provided.

Popular Attitudes Towards Markets And Democracy: Russia And United States Compared 25 Years Later, Maxim Boycko, Robert J. Shiller

Cowles Foundation Discussion Papers

We repeat a survey we did in the waning days of the Soviet Union (Shiller, Boycko and Korobov, AER 1991) comparing attitudes towards free markets between Moscow and New York. Additional survey questions, from Gibson Duch and Tedin (J. Politics 1992) are added to compare attitudes towards democracy. Two comparisons are made: between countries, and through time, to explore the existence of international differences in allegiance to democratic free-market institutions, and the stability of these differences. While we find some differences in attitudes towards markets across countries and through time, we do not find most of the differences large or …

Ellsberg Paradox: Ambiguity And Complexity Aversions Compared, J. Kovářík, D. Levin, Tao Wang

Economics Faculty Works

We present a simple model where preferences with complexity aversion, rather than ambiguity aversion, resolve the Ellsberg paradox. We test our theory using laboratory experiments where subjects choose among lotteries that “range” from a simple risky lottery, through risky but more complex lotteries, to one similar to Ellsberg’s ambiguity urn. Our model ranks lotteries according to their complexity and makes different—at times contrasting—predictions than most models of ambiguity in response to manipulations of prizes. The results support that complexity aversion preferences play an important and separate role from beliefs with ambiguity aversion in explaining behavior under uncertainty.

Predictability Of Bond Risk Premia With An Affine Term Structure Model, Sibel Korkmaz

Dissertations, Theses, and Capstone Projects

This thesis focuses on zero-coupon bond risk premia. In chapter 1 first I summarize the literature that defines expectation hypothesis, time variation in bond risk premia, well known macroeconomic and variety of technical indicators which predict bond return forecasts. Then, I continue with introducing a high dimensional affine dynamic term structure model and unscented Kalman filtering as its estimation technique.In chapter 2, I explore predictive capacity of the estimated latent states of this term structure model. I constructed a single return forecasting factor by using these states. I report comparison of well known excess bond return forecasting factors' predictive performance …

Through The Gateway: Marijuana Production, Governance, And The Drug War Détente, Michael Polson

Dissertations, Theses, and Capstone Projects

Since the 1996 voter approval of medical marijuana laws in California, marijuana policy has become increasingly liberalized. Producers, however, have remained in the greyest of grey market zones. Federal anti-drug laws and supply-side tactics have intensively targeted them even as marijuana has become more licit. In this legally unstable environment, marijuana patient-cultivators and underground producers have articulated and asserted themselves politically and economically, particularly as the likelihood of full legalization has increased. This dissertation explores how producers navigated the nebulous zone between underground and medical markets. I argue that even as producers supplied marijuana to a formalizing, regulated medical industry …

Going For The Gold: The Economics Of The Olympics, Victor Matheson, Robert Baade

Economics Department Working Papers

In this paper, we explore the costs and benefits of hosting the Olympic Games. On the cost side, there are three major categories: general infrastructure such as transportation and housing to accommodate athletes and fans; specific sports infrastructure required for competition venues; and operational costs, including general administration as well as the opening and closing ceremony and security. Three major categories of benefits also exist: the short-run benefits of tourist spending during the Games; the long-run benefits or the "Olympic legacy" which might include improvements in infrastructure and increased trade, foreign investment, or tourism after the Games; and intangible benefits …

Prediction In A Generalized Spatial Panel Data Model With Serial Correlation, Badi H. Baltagi, Long Liu

Center for Policy Research

This paper considers the generalized spatial panel data model with serial correlation proposed by Lee and Yu (2012) which encompasses a lot of the spatial panel data models considered in the literature, and derives the best linear unbiased predictor (BLUP) for that model. This in turn provides valuable BLUP for several spatial panel models as special cases.

Essays In Chinese Financial Markets, Chang Xia

Dissertations, Theses, and Capstone Projects

Chapter 1 adopted the constraint dummy variables regression model in Cao, Harris and Wang (2007) to examine seasonality in the returns, volatility, and turnover of Shanghai ‘A’, Shanghai ‘B’, Shenzhen ‘A’, and Shenzhen ‘B’ composite indexes in the Chinese Stock Market. Daily data of four composite indexes (Shanghai ‘A’, Shanghai ‘B’, Shenzhen ‘A’, and Shenzhen ‘B’) was collected: the opening index value, the closing index value, the maximum index value, the minimum index value and the volume traded. Volatility (a realized volatility that is based on the daily trading range), trading volume, and three return series of the four indexes …

The Role Of Perceived Control In Customer Value Cocreation And Service Recovery Evaluation, Lin Guo, Sherry L. Lotz, Chuanyi Tang, Thomas W. Gruen

Marketing Faculty Publications

Treating customers as passive recipients of service recovery does not account for their naturally elevated desire for control following a service failure. Focusing on value cocreation by customers in service recovery, this study conceptualizes three types of customer perceived control in service recovery: process control, decision control, and information control. Using both a field study and a controlled experiment to test the conceptual model, this study reveals various ways service firms can engage customers in service recovery to enhance their service experience. The results show that customers are motivated to exert influence on and regain control over service recovery because …