Behavioral Economics Commons^™

Conservatism And Switcher's Curse, Aaron Edlin

Aaron Edlin

Opec, The Seven Sisters, And Oil Market Dominance: An Evolutionary Game Theory And Agent-Based Modeling Approach, Aaron Wood, Charles F. Mason, David C. Finnoff

Charles F Mason

No abstract provided.

Pay-What-You-Want Pricing: Can It Be Profitable?, Yong Chao, Jose Fernandez, Babu Nahata

Yong Chao

Using a game theoretic framework, we show that not only can pay-what-you-want (PWYW) pricing generate positive profits, but it can also be more profitable than charging a fixed price to all consumers. Further, whenever it is more profitable, it is also Pareto-improving. We derive conditions in terms of two parameters, namely the marginal cost of production and the psychological cost of the consumer for paying too little compared to her reference price.

The paper makes the following contributions to the existing literature. First, we endogenize the choice of pricing strategies—PWYW vs. fixed price. Thus rather than solely focusing on the …

Collusive Bidding In The Fcc Spectrum Auctions, Peter Cramton, Jesse Schwartz

Jesse A. Schwartz

This paper describes the bid signaling that occurred in many of the FCC spectrum auctions. Bidders in these auctions bid on numerous spectrum licenses simultaneously, with bidding remaining open on all licenses until no bidder is willing to raise the bid on any license. Simultaneous open bidding allows bidders to send messages to their rivals, telling them on which licenses to bid and which to avoid. This “code bidding” occurs when one bidder tags the last few digits of its bid with the market number of a related license. We examine how extensively bidders signaled each other with retaliating bids …

Agency And Compensation: Evidence From The Hotel Industry, Matthew Freedman, Renata Kosova

Matthew Freedman

The Role Of Family Ties In Mitigating Moral Hazard: Firm-Level Evidence From Tamil Nadu, India, Goldie Chow

Goldie Chow

Drawing on firm-level data from the district of Coimbatore in Tamil Nadu, India, this study explores the role of family ties as a means to counteract potential moral hazard concerns. It is shown that firms will be more likely to employ family relations when faced with a higher hidden context for moral hazard. Specifically, the analysis finds that the presence of family members within the firm is higher when the firm provides general training and that firms that are more likely to do external business with family relations when it is believed that the legal system is not effective. Additionally, …

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 …

Pay-What-You-Want Pricing And Competition: Breaking The Bertand Trap, Yong Chao, Jose Fernandez, Babu Nahata

Yong Chao

Pay-What-You-Want (PWYW) pricing is a recent participative pricing strategy where a seller offers a good or service for any price consumers want to pay, including zero or some minimum payment. This paper provides a theoretical framework to study strategic effects of the PWYW pricing under duopoly by incorporating behavioral considerations of consumers in making voluntary payments when they could be freeloaders. Without identifying any particular behavioral factor, we assume that consumers feel a sense of guilt when they pay less than their reference points. It is shown that the PWYW pricing can be a profitable marketing strategy than the conventional …

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.

Looking At China’S Great Leap Forward From A Systems Perspective, Brandy Futrell

Brandy Futrell

China’s Great Leap Forward (GLF) campaign of 1958-1961 led by Mao Tse-Tung resulted in a horrendous famine that cost millions of lives. This paper examines the campaign from a systems perspective across the individual, group/societal, and regulatory levels. Looking at each level illustrates errors that explain how the GLF failed.

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

Muhammad Irfan Chani

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.

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

Prediction Markets To Forecast Electricity Demand, Peter Cramton, Luciano De Castro

Luciano I. de Castro

Forecasting electricity demand for future years is an essential step in resource planning. A common approach is for the system operator to predict future demand from the estimates of individual distribution companies. However, the predictions thus obtained may be of poor quality, since the reporting incentives are unclear. We propose a prediction market as a form of forecasting future demand for electricity. We describe how to implement a simple prediction market for continuous variables, using only contracts based on binary variables. We also discuss specific issues concerning the implementation of such a market.

Juridische Kaders In De Sociale Economie: Een Rechtseconomische Doorlichting, Astrid Coates, Wim Van Opstal

Wim Van Opstal

De sociale economie hanteert in ons land hoofdzakelijk het vzw-statuut en bestaat traditioneel ook uit (erkende) coöperatieve vennootschappen. In 1995 werd hier ook de vennootschap met sociaal oogmerk aan toegevoegd. In dit artikel bespreken we enkele randvoorwaarden voor een geslaagd ontwerp en een succesvolle implementatie van juridische kaders voor de sociale economie. Vervolgens bespreken we bondig de essentiële kenmerken van deze drie juridische kaders. We besluiten met een vergelijkende analyse en belichten daarbij de belangrijkste relatieve troeven en zwaktes ten opzichte van elkaar.

Employee Voice And Intent To Leave: An Empirical Evidence Of Pakistani Banking Sector, Ahmed Imran Hunjra, Muhammad Asghar Ali, Muhammad Irfan Chani, Hashim Khan, Kashif Ur Rehman

Muhammad Irfan Chani

A Note On Causal Relationship Between Fdi And Savings In Bangladesh, Mohammad Salahuddin, Muhammad Shahbaz Shahbaz, Muhammad Irfan Chani

Muhammad Irfan Chani

This paper aims to investigate the causal relationship between foreign direct investment and gross domestic savings in Bangladesh over a period of 1985-2007. In doing so, Johansen cointegration technique and error correction methods are employed to examine the long run and short run relationship between foreign direct investment and gross domestic savings. To determine the direction of causality, we used innovation accounting approach. Results suggest that there exist bi-directional causal relationship between foreign direct investment and gross domestic savings but the movement is stronger from domestic savings to foreign direct investment. The result also implies complimentary relationship between them and …

Foreword To Ross Baldick's 'Single Clearing Price In Electricity Markets', Peter Cramton

Peter Cramton

Argues that consumers and suppliers are better off with the clearing-price auction in electricity markets.

Democracy Autocracy And Macroeconomic Performance In Pakistan, Nasir Iqbal, Sardar Javaid Iqbal Khan, Muhammad Irfan Chani

Muhammad Irfan Chani

Pakistan showed a healthy growth rate of 5.6 percent during the entire history and faced many ups and downs in economic growth due to dramatic changes in political regimes. The literature shows mixed results regarding the impact of autocracy or democracy on economic growth. The aggregate growth of the economy under autocracy remained better as compared to democratic period. Financial indicators show consistent path through out the history of Pakistan. Different trade policies are designed in different regime to run the external sector and the impact of each policy was different.

Affidavit Of Peter Cramton, Peter Cramton

Peter Cramton

Affidavit arguing that HQ manipulated the NYISO TCC and day-ahead energy markets. On behalf of DC Energy, LLC.

Ex Parte Of Peter Cramton, Peter Cramton

Peter Cramton

Ex parte communication on various auction rules for the AWS auction.

Uniform Pricing Or Pay-As-Bid Pricing: A Dilemma For California And Beyond, Peter Cramton, Alfred E. Kahn, Robert H. Porter, Richard D. Tabors

Peter Cramton

Any belief that a shift from uniform to as-bid pricing would provide power purchasers substantial relief from soaring prices is simply mistaken. The immediate consequence of its introduction would be a radical change in bidding behavior that would introduce new inefficiencies, weaken competition in new generation, and impede expansion of capacity.

Collusive Bidding: Lessons From The Fcc Spectrum Auctions, Peter Cramton, Jesse Schwartz

Jesse A. Schwartz

The Federal Communications Commission (FCC) spectrum auctions use a simultaneous ascending auction design. Bidders bid on numerous communication licenses simultaneously, with bidding remaining open on all licenses until no bidder is willing to bid higher on any license. With full revelation of bidding information, simultaneous open bidding allows bidders to send messages to their rivals, telling them on which licenses to bid and which to avoid. These strategies can help bidders coordinate a division of the licenses, and enforce the proposed division by directed punishments. We explore the extent that bidders signaled each other with retaliating bids in recent FCC …

Affidavit Of Peter Cramton, Peter Cramton

Peter Cramton

Summary of review of reserves and operable capability markets. For ISO New England.

Information Sharing And Tacit Collusion In Laboratory Duopoly Markets, Timothy N. Cason, Charles F. Mason

Charles F Mason

No abstract provided.