Behavioral Economics Commons^™

Investing In A Better Job, Michael Sack Elmaleh

Michael Sack Elmaleh

Investing time and money to attain "something" that allows a person to earn more in future wages is economically rational, if the present value of the additional future wages exceeds the present value of the investment cost in time and money to attain that "something". In our market economy, these attained "somethings" include college degrees, vocational and professional certifications, and equity ownership in small closely held businesses. Most small closely held businesses require the full time active management of the owner. Little or no free cash flow would be available to the investor if they chose to hire a non …

Water Borne Diseases And Rural Development In Sudan Study Of Malaria In Gezira Irrigated Agricultural Scheme, Professor Issam A.W. Mohamed

Professor Issam A.W. Mohamed

Gezira irrigated scheme is globally one of the biggest agricultural productive units administratively managed. It has seen deteriorating productivity for the past two decades. There cries that it should be privatized. That was seriously taken by the government in an economic liquidation of its assets. However, in this study we discuss analyze other aspects than the previously mentioned aspects of production parameters. We focus of health economics and how gradual negligence led to the prevalence of waterborne diseases. That degenerated farmers' abilities to produce. The present study was carried out in the Gezira scheme to measure the impact of water …

Report On Key Design Elements Of Auctions Under Australia's Carbon Pollution Reduction Scheme, Peter Cramton

Peter Cramton

No abstract provided.

Auctions For Injecting Bank Capital (Addendum To 'A Troubled Asset Reverse Auction'), Peter Cramton, Lawrence M. Ausubel

Peter Cramton

Public discussion has turned, in the past few days, toward using some of the $700 billion in rescue funds for the injection of government money into banks in return for ownership stakes. The purpose of this short note, an addendum to “A Troubled Asset Reverse Auction,” is to describe an auction mechanism suitable for injections of capital into banks. The auctions would price the equity purchases through a competitive process.

Auctioning Long-Term Gas Contracts In Colombia, Peter Cramton

Peter Cramton

This paper presents an approach to auctioning long-term gas contracts in Colombia. I propose an annual auction for long-term firm gas contracts. The auction would assign and price all firm gas contracts, with the exception of gas from the Guajira field, which is assigned administratively at a regulated price. The proposal is a partial market design in that it does not address the transportation of gas from producer to consumer.

The goal of the approach is to improve the transparency and efficiency of the gas market with a coordinated auction for long-term gas contracts. Currently, gas contracts are sold in …

A Review Of The L-Band Auction, Peter Cramton

Peter Cramton

In May 2008, Ofcom’s L-band auction concluded. This was Ofcom’s second combinatorial clock auction. The auction used an innovative format intended to encourage an efficient assignment of the 17 lots. Eight bidders competed for the lots. In sharp contrast to the first combinatorial clock auction, the 10-40 GHz auction, in which each of the ten bidders won spectrum, in the L-band auction there was a single winner—Qualcomm won all the lots. This note briefly reviews the auction.

A Troubled Asset Reverse Auction, Peter Cramton, Lawrence M. Ausubel

Peter Cramton

The US Treasury has proposed purchasing $700 billion of troubled assets to restore liquidity and solve the current financial crisis, using market mechanisms such as reverse auctions where appropriate. This paper presents a high-level design for a troubled asset reverse auction and discusses the auction design issues. We assume that the key objectives of the auction are to: 1) provide a quick and effective means to purchase troubled assets and increase liquidity; 2) protect the taxpayer by yielding a price for assets related to their value; and 3) offer a transparent rules-based process that minimizes discretion and favoritism. We propose …

The Quadratic Core-Selecting Payment Rule For Combinatorial Auctions, Peter Cramton, Robert Day

Peter Cramton

We report on the use of a quadratic programming technique in recent and upcoming spectrum auctions in Europe, and proposed for use in the FAA’s landing-slot auctions in the United States. Specifically, we compute a unique point “in the core” that minimizes the sum of squared deviations from the Vickrey-Clarke-Groves payments. Analyzing the Karush-Kuhn-Tucker conditions, we demonstrate that the resulting payments can be decomposed into a series of economically meaningful and equitable penalties, adding to the perceived “fairness” of this payment rule. Further, we discuss the many benefits of this combinatorial auction paradigm.

A Review Of The 10-40 Ghz Auction, Peter Cramton

Peter Cramton

In February 2008, Ofcom’s 10-40 GHz auction concluded. This was Ofcom’s first combinatorial clock auction. The auction used an innovative format intended to encourage an efficient assignment of the 27 lots. Each of the ten bidders won one or more lots. All 27 lots were assigned. This note briefly reviews the auction.

Applying Regret Theory To Investment Choices: Currency Hedging Decisions☆, Sébastien Michenaud, Bruno Solnik

Sébastien Michenaud

Esop Fables: The Impact Of Employee Stock Ownership Plans On Labor Disputes, Peter Cramton, Hamid Mehran, Joseph Tracy

Peter Cramton

By the early 1990s employee stock ownership plans (ESOPs) had become as prevalent in unionized firms as in nonunionized firms. However, little research has been devoted to examining the implications of ESOPs for collective bargaining, or cross ownership more generally. In this paper, we extend the signaling model of Cramton and Tracy (1992) to allow partial ownership by the union. We demonstrate that ESOPs create incentives for unions to become weaker bargainers. As a result, the model predicts that ESOPs will lead to a reduction in strike incidence and in the fraction of labor disputes that involve a strike. We …

Distinguishing Owner Compensation From Profit In Closely Held Companies: In Search Of A Responsibility Premium, Michael Sack Elmaleh

Michael Sack Elmaleh

The application of the income method of valuation requires that owner compensation be distinguished from free cash flow. The “proper” parsing of compensation and free cash flow can be the largest point of contention in contested valuation disputes. The preferred method of parsing is the substitution method which says that the proper allocation should be based on the wage that would have to be paid to a non owner employee. In this article I argue that owner employees carry additional responsibilities that are not normally borne by non owner employees. These additional responsibilities require that a premium be paid the …

Pre-Test Assessment, Thomas D. Berry

Thomas D Berry

Economists, Value Judgments, And Climate Change: A View From Feminist Economics, Julie Nelson

Julie A. Nelson

A number of recent discussions about ethical issues in climate change, as engaged in by economists, have focused on the value of the parameter representing the rate of time preference within models of optimal growth. This essay examines many economists' antipathy to serious discussion of ethical matters, and suggests that the avoidance of questions of intergenerational equity is related to another set of value judgments concerning the quality and objectivity of economic practice. Using insights from feminist philosophy of science and research on high reliability organizations, this essay argues that a more ethically transparent, real-world-oriented, and flexible economic practice would …

Gone In 60 Seconds: The Absorption Of News In A High-Frequency Betting Market, Babatunde Buraimo, David Peel, Rob Simmons

Dr Babatunde Buraimo

This paper tests for efficiency in a betting market that offers high-frequency data, the Betfair betting exchange for wagering on outcomes of English Premier League soccer matches. We find clear evidence of rapid adjustment of prices to large disturbances (news). Full adjustment takes place within a one minute interval after the news. This suggests that this particular wagering market is not just efficient at pre-match prices but is also efficient in the face of events within games.

De Evoluerende Marktpositie Van Beschutte Werkplaatsen In Vlaanderen: Uitdagingen En Knelpunten, Wim Van Opstal, Jozef Pacolet

Wim Van Opstal

Beschutte werkplaatsen hebben als grootste speler in de sociale inschakelingseconomie goed weten door te dringen in onze economie. Dit brengt echter ook de confrontatie met alle uitdagingen van een competitieve economische omgeving met zich mee. Het HIVA voerde een onderzoek uit naar de uitdagingen waarmee de beschutte werkplaatsen in Vlaanderen geconfronteerd worden vanuit hun evoluerende marktpositie. Daarnaast belicht deze studie de knelpunten vanuit de interne organisatie van beschutte werkplaatsen om het hoofd te kunnen bieden aan deze uitdagingen. De vitaliteit van de beschutte werkplaatsen aan de ene kant en de kwetsbaarheid ervan aan de andere kant, is het genuanceerde beeld …

Coöperaties In De Social Profit? Een Verkenning., Wim Van Opstal

Wim Van Opstal

Het is ondertussen meer dan 150 jaar geleden dat de eerste coöperaties werden opgericht om de levensstandaard van arbeiders en boeren te verbeteren. De jongste jaren begint men de coöperatie echter opnieuw te ontdekken als instrument om economische activiteiten te combineren met sociale doelstellingen. In deze bijdrage belichten we de rol die coöperaties spelen binnen het activiteitenspectrum van de social profit in een internationaal kader en staan we stil bij de vraag of dit ook voor Vlaanderen een interessant alternatief kan bieden.

When Fairness Bends Rationality: Ernst Fehr Meets John Nash, Alessandro Tavoni

Alessandro Tavoni

No abstract provided.

De Paradojas Y Neocons, Mario Šilar

Mario Šilar

No abstract provided.

Political Liberalism And Public Reason, Mario Šilar

Mario Šilar

The paper explores John Rawls´s idea of public reason, as reflected in Political Liberalism and The Idea of Public Reason Revisited. In Rawls’s later works, public reason acquires fundamental significance as a criterion by which the principles to be assumed from the outset in a theory of political justice may be determined. The starting-point for Rawls´s theory -the idea of citizens as free and equal reveals- that this abstraction falls short of an authentic conception of human beings as social by nature. A brief study of key issues concerning marriage and the family shows the difficulties that underlie this question. …

The Practical Value Of Natural Law Theory In The Work Of St Thomas Aquinas, Mario Šilar

Mario Šilar

No abstract provided.

Perspectives On Social Cognition, Leslie Marsh, Christian Onof

Leslie Marsh

No longer is sociality the preserve of the social sciences, or ‘‘culture’’ the preserve of the humanities or anthropology. By the same token, cognition is no longer the sole preserve of the cognitive sciences. Social cognition (SC) or, sociocognition if you like, is thus a kaleidoscope of research projects that has seen exponential growth over the past 30 or so years. That so many disciplines now invoke the term ‘‘social cognition,’’ shouldn’t tempt one into thinking that they are all denoting the same idea. On the contrary, with such methodologically and perspectivally diverse interests involved, there is every chance that …

Perspectives On Social Cognition, Leslie Marsh, Christian Onof

Leslie Marsh

No longer is sociality the preserve of the social sciences, or ‘‘culture’’ the preserve of the humanities or anthropology. By the same token, cognition is no longer the sole preserve of the cognitive sciences. Social cognition (SC) or, sociocognition if you like, is thus a kaleidoscope of research projects that has seen exponential growth over the past 30 or so years. That so many disciplines now invoke the term ‘‘social cognition,’’ shouldn’t tempt one into thinking that they are all denoting the same idea. On the contrary, with such methodologically and perspectivally diverse interests involved, there is every chance that …

Civil War And Political Contractualism Incomplete (Guerra Civil Y Contractualismo Político Incompleto) Spanish, Fernando Estrada

Fernando Estrada

This chapter presents an interpretation of armed conflict in Colombia since reading "negative" of the Coase theorem. The relations of the civil war with limited conditions of policy and constitutional order, offer advantages to agents in a society threatened violent.

Market Design: Auctions And Matching, Peter Cramton

Peter Cramton

No abstract provided.

Innovation And Market Design, Peter Cramton

Peter Cramton

Market design plays an essential role in promoting innovation. I examine emission allowance auctions, airport slot auctions, spectrum auctions, and electricity markets, and demonstrate how the market design can encourage innovation. Improved pricing information is one source of innovation. Enhancing competition is another driver of innovation seen in all of the applications. Market design fosters innovation in other ways as well by addressing other potential market failures.

Forward Reliability Markets: Less Risk, Less Market Power, More Efficiency, Peter Cramton, Steven Stoft

Peter Cramton

A forward reliability market is presented. The market coordinates new entry through the forward procurement of reliability options—physical capacity bundled with a financial option to supply energy above a strike price. The market assures adequate generating resources and prices capacity from the bids of competitive new entry in an annual auction. Efficient performance incentives are maintained from a load-following obligation to supply energy above the strike price. The capacity payment fully hedges load from high spot prices, and reduces supplier risk as well. Market power is reduced in the spot market, since suppliers enter the spot market with a nearly …

The Effect Of Incumbent Bidding In Set-Aside Auctions: An Analysis Of Prices In The Closed And Open Segments Of Fcc Auction 35, Peter Cramton, Allan T. Ingraham, Hal J. Singer

Peter Cramton

This paper examines the impact of an incumbent carrier’s participation in two simultaneously conducted auctions: one set-aside for non-incumbents and one open to all carriers. This paper estimates the extent to which prices in the closed auction were inflated by the participation of incumbents. This paper also estimates what prices would have been in the open auction had incumbents been excluded from bidding in the closed. It is found that an incumbent’s participation in the closed auction through a front, Alaska Native, enabled it to win more licenses at lower prices in FCC Auction 35. In contrast, non-incumbents won fewer …

Does Volatility In Government Borrowing Leads To Higher Inflation? Evidence From Pakistan, Safdar Khan

Safdar Khan

No abstract provided.

An Analysis Of Pakistan’S Vulnerability To Crisis, Safdar Khan

Safdar Khan

No abstract provided.