Behavioral Economics Commons^™

Conservatism And Switcher's Curse, Aaron Edlin

Aaron Edlin

The Bidder's Curse: Comment, Henry S. Schneider

Henry S Schneider

The prices of auctions on eBay often exceed eBay’s fixed-price “Buy-It-Now” prices. I investigate the causes of this overbidding, focusing on the interpretation in Malmendier and Lee (2011) that the observed overbidding cannot be explained “without allowing for nonstandard preferences or beliefs” and that the “strongest direct evidence points to limited attention.” Using data from their study and new data from eBay, I provide evidence that a key condition for identifying nonstandard behavior may not have been met, and that the observed overbidding is not inconsistent with standard behavior once we allow for the likely presence of search costs.

Nonstandard Bidder Behavior In Real-World Auctions, Joseph U. Podwol, Henry S. Schneider

Henry S Schneider

Empirical work on auctions has found that bidders deviate from standard behavior in important ways. We investigate a range of these behaviors, including nonrational herding, auction fever, quasi-endowment effect, and escalation of commitment. Our innovations are to more completely control for unobservables by using new data from a field experiment on eBay, and by accounting for censoring of bids below the starting price. Consistent with standard auction theory and in contrast to the predictions of the nonstandard behaviors, we find that auction starting price has no effect on bidder willingness to pay in a private-values setting. We conclude that there …

Voice Without Say: Why Capital-Managed Firms Aren’T (Genuinely) Participatory, Justin Schwartz

Justin Schwartz

Why are most capitalist enterprises of any size organized as authoritarian bureaucracies rather than incorporating genuine employee participation that would give the workers real authority? Even firms with employee participation programs leave virtually all decision-making power in the hands of management. The standard answer is that hierarchy is more economically efficient than any sort of genuine participation, so that participatory firms would be less productive and lose out to more traditional competitors. This answer is indefensible. After surveying the history, legal status, and varieties of employee participation, I examine and reject as question-begging the argument that the rarity of genuine …

The Stability Of Offshore Outsourcing Relationships: The Role Of Relation Specificity And Client Control, Stephan Manning, Arie Y. Lewin, Marc Schuerch

Stephan Manning

Offshore outsourcing of administrative and technical services has become a mainstream business practice. Increasing commoditization of business services and growing client experience with outsourcing have created a range of competitive service delivery options for client firms. Yet, data from the Offshoring Research Network (ORN) suggests that, despite increasing market options and growing client quality and cost efficiency expectations, clients typically renew provider contracts and develop longer-term relationships with providers. Based on ORN data, this paper explores drivers of this phenomenon. The findings suggest that providers promote contract renewal by making client specific investments in software, IT infrastructure and training, and …

Wat Is Coöperatief Ondernemen?, Lieve Jacobs, Wim Van Opstal

Wim Van Opstal

De discussie van wat een echte coöperatie is en hoort te zijn, is haast zo oud als de coöperatieve beweging zelf en lijkt soms wel op de zoektocht naar de heilige graal. Toch beschikt de internationale coöperatieve beweging, vertegenwoordigd door de Internationale Coöperatieve Alliantie (ICA), over een referentiekader met een gemeenschappelijke definitie, principes en waarden. Dit referentiekader is zelf het compromis tussen vele verschillende visies en stromingen binnen het coöperatieve denken. Net daarom is het verstandig om dit eerder als een kompas in plaats van als een keurslijf te beschouwen. In deze bijdrage illustreren we de praktische grondslagen en gevolgen …

Coöperaties In België. Top 100 Van De Grootste Belgische Coöperatieve Vennootschappen In 2011, Wim Van Opstal

Wim Van Opstal

In deze publicatie presenteren we de top 100 van de grootste Belgische coöperatieve vennootschappen in 2011. We bespreken de grootste coöperaties volgens hun economische activiteit en geven zo een venster op de rijke diversiteit aan coöperatieve initiatieven in ons land.

Human Capital Formation And Economic Development In Pakistan: An Empirical Analysis, Muhammad Irfan Chani, Mahboob Ul Hassan, Muhammad Shahid

Muhammad Irfan Chani

This study investigates the casual relationship between economic development and formation of human capital in Pakistan. Based on endogenous growth theory, this study empirically tests the standard growth model consisting of gross domestic product (GDP) per capita as a dependent variable and human capital formation, investment in physical capital and labor force as independent variables. Autoregressive distributive lag (ARDL) bound testing approach to cointegration is used to check the long-run equilibrium relationship between the variables included in the model. For checking the causal relationship between economic development and human capital formation, pair-wise Granger causality test is used for time series …

Some Socio Economic Determinants Of Fertility In Pakistan: An Empirical Analysis, Muhammad Irfan Chani, Muhammad Shahid, Mahboob Ul Hassan

Muhammad Irfan Chani

This study aims to investigate the role that various socioeconomic factors like female education, urbanization and female labour force participation play in determining fertility of women in Pakistan. ARDL bound test approach to cointegration is used to analyze the long-run relationship of the variables by using the data for the period from 1980 to 2009. The empirical results show that there exists a long-run as well as short-run relationship between fertility and urbanization, female labour force participation and female education in Pakistan. The analysis indicates there is a negative relationship between all 3 determinants with fertility. Female education and urbanization …

A Closer Look At The Relationship Between Superstitious Behaviors And Trait Anxiety, Brandy Futrell

Brandy Futrell

This study examines the relationship between superstitious behaviors and trait anxiety. Researchers randomly selected participants from college campuses for a 28-question survey measuring superstitiousness and the 20-question State-Trait-Anxiety-Inventory (STAI) to measure symptoms of anxiety. Results show a positive correlation between superstitious behaviors and an increase in anxiety symptoms. Significant gender differences were found; women scored higher on superstitiousness survey and the STAI-X2 test. Superstitious behaviors were a significant indicator for developing trait anxiety.

Coöperaties In België. Profielschets 2005-2010, Wim Van Opstal

Wim Van Opstal

Coöperaties kennen de jongste jaren een groeiende aandacht binnen de academische wereld, het bedrijfsleven, het maatschappelijke middenveld en het beleid. Coöperaties worden tijdens een groeiend aantal studiedagen gewikt en gewogen als mogelijk instrument voor diverse uitdagingen die we vandaag kennen op economisch, sociaal en ecologisch vlak. Cijfers over coöperaties in ons land zijn echter schaars. In deze publicatie presenteren we een profielschets van de coöperatieve vennootschappen in België met daarin enkele kerngegevens die de lezer wegwijs maken in het Belgische coöperatieve landschap. We bestrijken daarmee de periode 2005-2010 en baseren ons hiervoor op administratieve gegevens, afkomstig uit de Balanscentrale van …

Les Co-Opératives En Belgique. Profil 2005-2010, Wim Van Opstal

Wim Van Opstal

Cette publication présente le profil des sociétés coopératives en Belgique, principaux chiffres à la clef, afin de faire découvrir au lecteur le paysage coopératif en Belgique. La période concernée est 2005-2010 et nous nous basons sur les données fournies par la Centrale des bilans de la Banque Nationale de Belgique (BNB), la Banque- Carrefour des entreprises (BCE) et l’Office National de Sécurité Sociale (ONSS). Grâce à la collaboration du Département Emploi et Economie Sociale du gouvernement flamand, ces données ont pu être obtenues auprès de la cellule de coordination Vlaams e-Government (CORVE), qui rassemble les données dans la Verrijkte Kruispuntbank …

Theoretical And Experimental Analysis Of Auctions With Negative Externalities, Youxin Hu, John Kagel, Xiaoshu Xu, Lixin Ye

Youxin Hu

We investigate a private value auction in which a single “entrant” on winning imposes a negative externality on two “regular” bidders. In an English auction, when all bidders are active “regulars” free ride, exiting before price reaches their value. In a first-price sealed-bid auction incentives for free riding and aggressive bidding coexist, limiting free riding. We find substantial, though incomplete, free riding in the clock auction. In first-price auctions, regular bidders bid more aggressively than the “entrant” and both bid higher than in auctions with no externality. Predictions regarding revenue, efficiency, and successful entry between the two auctions are satisfied.

Harnessing Complementarities In The Education Production Function, John A. List, Jeffrey A. Livingston, Susanne Neckermann

Jeffrey A Livingston

Studies which seek to estimate components of the education production function, especially those that employ the “value-added” approach, almost universally assume that the production function is linear and additively separable in its inputs. This strict functional form assumes that there are no complementarities between inputs, though there are compelling intuitive reasons to think they might exist. This study conducts a randomized field experiment to evaluate whether complementarities between students, their parents, and tutors who aid the students in specific subjects can be harnessed using financial incentives. No evidence emerges in support of this hypothesis. The results suggests that a given …

An Analysis Of Different Approaches To Women Empowerment: A Case Study Of Pakistan, Amatul R. Chaudhary, Muhammad Irfan Chani, Zahid Pervaiz

Muhammad Irfan Chani

Coöperaties In Zorg. Een Verkenning Van Vraagstukken En Goede Praktijken In Binnen- En Buitenland, Wim Van Opstal

Wim Van Opstal

Reeds meer dan twee eeuwen worden coöperaties opgericht om de levensstandaard van arbeiders en boeren te verbeteren. Hoewel de coöperatie in Vlaanderen al enkele decennia aan zichtbaarheid moest inboeten, begint men de laatste jaren ook bij ons de coöperatie opnieuw te ontdekken als instrument voor het combineren van een economische activiteit met sociale doelstellingen. Ook, en misschien zelfs vooral, binnen de social profitsector doen zich tal van interessante ontwikkelingen op dat vlak voor. De social profitsector, en de zorgsector in het bijzonder, wordt anno 2011 immers geconfronteerd met de dubbele uitdaging van toenemende maatschappelijke noden in een context van een …

Persuading Consumers With Social Attitudes, Stefan Buehler, Daniel Halbheer

Stefan Buehler

This paper analyzes persuasive advertising and pricing in oligopoly if firms sell differentiated products and consumers have heterogenous social attitudes towards the consumption by others. Deriving product demand from primitives, we show that the demand-enhancing effect of persuasive advertising varies across consumers and increases in the average degree of conformity. In equilibrium, both quality and cost leaders choose higher advertising intensities and charge higher prices than their competitors. In addition, we show that an increase in the average degree of conformity among consumers reinforces asymmetries between firms.

Collective Choice, Justin Schwartz

Justin Schwartz

This short nontechnical article reviews the Arrow Impossibility Theorem and its implications for rational democratic decisionmaking. In the 1950s, economist Kenneth J. Arrow proved that no method for producing a unique social choice involving at least three choices and three actors could satisfy four seemingly obvious constraints that are practically constitutive of democratic decisionmaking. Any such method must violate such a constraint and risks leading to disturbingly irrational results such and Condorcet cycling. I explain the theorem in plain, nonmathematical language, and discuss the history, range, and prospects of avoiding what seems like a fundamental theoretical challenge to the possibility …

Trust And Trustworthiness Among Economics Majors, Utteeyo Dasgupta, Arjun Menon

Utteeyo Dasgupta

We use a simple trust-game to elicit trusting and trustworthy behavior among students majoring in economics and other disciplines. We also administer a Social Values Orientation (SVO) survey to evaluate any possible correlation between an individual's levels of trust indicated in the survey and his/her action in the game. Our results suggest that although students pursuing a major in economics appear to be no different than other students in choosing trusting actions, when it comes to being trustworthy, the former group always chooses the self payoff maximizing action rather than the trustworthy action. Scores from the SVO survey do not …

Using Spectrum Auctions To Enhance Competition In Wireless Services, Peter Cramton, Evan Kwerel, Gregory Rosston, Andrzej Skrzypacz1

Peter Cramton

Spectrum auctions are used by governments to assign and price licenses for wireless communications. Effective auction design recognizes the importance of competition, not only in the auction, but in the downstream market for wireless communications. This paper examines several instruments regulators can use to enhance competition and thereby improve market outcomes.

Determination Of Import Demand In Pakistan: The Role Of Expenditure Components, Muhammad Irfan Chani, Zahid Pervaiz, Amatul R. Chaudhary

Muhammad Irfan Chani

The paper uses imperfect substitution approach to derive the aggregate import demand function on the basis of disaggregated expenditure components. This derived import demand function is then empirically tested for Pakistan by using co-integration and error correction mechanism. The empirical results show that elasticity of import demand with respect to different macro components of final expenditure is different. The import demand in Pakistan is affected positively and significantly by all expenditure components. The relative prices have negative but insignificant relationship with import demand in Pakistan. The findings indicate that use of aggregate expenditure variable in the aggregate import demand function …

Poverty, Inflation And Economic Growth: Empirical Evidence From Pakistan, Muhammad Irfan Chani, Zahid Pervaiz, Sajjad Ahmad Jan, Amjad Ali, Amatul R. Chaudhary

Muhammad Irfan Chani

This study aims to investigate the role of economic growth and inflation in explaining the prevalence of poverty in Pakistan. ARDL bound testing approach to co-integration confirms the existence of long run relationship among the variables of poverty, economic growth, inflation, investment and trade openness over the period of 1972-2008. Empirical results show that economic growth and investment have negative and inflation has positive impact on poverty. The effect of trade openness on poverty is insignificant in this study. The short run analysis reveals that economic growth has negative and inflation has positive impact on poverty whereas the role of …

Financial Crises And Economic Growth In Pakistan: A Time Series Analysis, Rauf -I- Azam, Iram Batool, Rabia Imran, Muhammad Irfan Chani, Ahmed Imran Hunjra, Javed Mahmood Jasra

Muhammad Irfan Chani

The purpose of this research is to investigate causal relationship between economic growth and major indicators of financial crisis -- inflation rate, interest rate and the volume of foreign debt-- in Pakistan. This study also highlights the stability of the relationship between indicators of financial crisis and economic growth. The annual time series data ranging from 1972 to 2010 is used for the analysis. Johansen's co-integration test is used to check the stability of long nm equilibrium relationship between the variables used in the study. The results indicate that is long nm stable equilibrium relationship between economic growth and the …

Gender Inequality And Economic Growth: A Time Series Analysis For Pakistan, Zahid Pervaiz, Muhammad Irfan Chani, Sajjad Ahmad Jan, Amatul R. Chaudhary

Muhammad Irfan Chani

This paper attempts to analyze the impact of gender inequality on economic growth of Pakistan. An annual time series data for the period of 1972-2009 has been used in this study. We have regressed growth rate of real gross domestic product (GDP) per capita on labour force growth, investment, trade openness and a composite index of gender inequality. The results reveal that labour force growth, investment and trade openness have statistically significant and positive impact whereas gender inequality has a significant and negative effect on economic growth of Pakistan.

Letter To Deputy Administrator Blum (Cms) On Medicare Auction, Peter Cramton

Peter Cramton

No abstract provided.

Reducing Healthcare Costs Requires Good Market Design, Peter Cramton, Brett Katzman

Peter Cramton

No abstract provided.

Letter From 167 Concerned Auction Experts On Medicare Competitive Bidding Program, Peter Cramton

Peter Cramton

No abstract provided.

Factors Effecting Job Satisfaction Of Employees In Pakistani Banking Sector, Ahmed Imran Hunjra, Muhammad Irfan Chani, Sher Aslam, Muhammad Azam, Kashif -Ur- Rehman

Muhammad Irfan Chani

Wind Energy In Colombia: A Framework For Market Entry, Peter Cramton, Walter Vergara, Alejandro Deeb, Natsuko Toba, Irene Leino

Peter Cramton

The purpose of this report is to provide decision makers in Colombia (and by extension other countries or regions), who are considering the deployment or consolidation of wind power, with a set of options to promote its use. The options presented are the result of an analysis of the Colombian market; this analysis included simulations and modeling of the country’s power sector, and extensive consultations with operators, managers, and agents. More information on the analysis and simulations is presented in the appendixes. Wind was chosen to exemplify the range of renewable energy alternatives available to complement traditional power sector technologies …

De Coöperatie, Organisatievorm Uit Het Verleden Voor Onze Samenleving Van Morgen?, Wim Van Opstal

Wim Van Opstal

De financieel-economische crisis heeft het debat over de wijze waarop we onze economie moeten organiseren opnieuw aangewakkerd. Brede lagen van de bevolking, het maatschappelijk middenveld en zelfs de politieke klasse gingen op zoek naar alternatieven voor ons economisch bestel. Eén van deze alternatieven is de coöperatie. Het loont daarom eens de moeite om te kijken in welke domeinen men deze organisatievorm (her)ontdekt heeft en of de coöperatie daadwerkelijk een alternatief kan vormen voor bepaalde sociale en economische problemen.