Behavioral Economics Commons^™

Elections And Economic Turbulence In Brazil: Candidates, Voters, And Investors, Tony Petros Spanakos, Lucio R. Renno

Department of Political Science and Law Faculty Scholarship and Creative Works

The relation between elections and the economy in Latin America might be understood by considering the agency of candidates and the issue of policy preference congruence between investors and voters. The preference congruence model proposed in this article highlights political risk in emerging markets. Certain risk features increase the role of candidate campaign rhetoric and investor preferences in elections. When politicians propose policies that can appease voters and investors, elections may have a limited effect on economic indicators, such as inflation. But when voter and investor priorities differ significantly, deterioration of economic indicators is more likely. Moreover, voter and investor …

Global Analysis Of An Expectations Augmented Evolutionary Dynamics, Angelo Antoci, Antonio Gay, Massimiliano Landi, Pier Luigi Sacco

Research Collection School Of Economics

We consider a deterministic evolutionary model where players form expectations about future play. Players are not fully rational and have expectations that change over time in response to current payoffs and feedback from the past. We provide a complete characterization of the qualitative dynamics so induced for a two strategy population game, and relate our findings to standard evolutionary dynamics and equilibrium selection when agents have rational forward looking expectations.

Socio-Economic And Cost Of Living Indicators Among Foreign And Domestic-Born Latino Nationalities In The New York Metropolitan Area, 2005, Howard Caro-López

Center for Latin American, Caribbean, and Latino Studies

Introduction: This report focuses on comparing socio-economic conditions between foreign born and domestic born populations among the major Latino national groups in the New York City metropolitan area as of 2005.

Methods: Data on Latinos and other racial/ethnic groups were obtained from the U.S. Census Bureau American Community Survey, reorganized for public use by the Minnesota Population Center, University of Minnesota, IPUMSusa. Cases in the dataset were weighted and analyzed to produce population estimates.

Results: New York City Latinos lag considerably behind all other groups in terms of total family income. While median family income for non-Hispanic white residents far …

Three Essays On Computer And Internet Use At Home, Tadesse Biru Wodajo

Dissertations

This dissertation consists of three essays on computer and Internet (CI) use in the United States households. Surveys show that the adoption and use of these two technologies at home have been steadily increasing over time. In addition to providing information regarding the use of CI at home, the essays seek to address a number of issues.

The first essay investigates the factors that determine the probability of owning a home CI and those influencing the intensity of use by employing the double-hurdle model. The double-hurdle estimation reveals that the use of a home CI is governed by two distinct …

The Remittance Environment In Nigeria, A. Englama

CBN Occasional Papers

This preliminary study is on the remittance environment in Nigeria which became compelling because of low availability of information and empirical research on the subject. The need to obtain evidence-based information to drive policy formulation on remittances inflow which grew from US$1.4 billion in 2002 to US$17.9 billion in 2007 and tap its potentials to promote economic growth in Nigeria were the rationale for the study. An understanding of the drivers, inhibitors, characteristics, cost of transaction and channels of the flows would promote policy formulation to improve the remittance environment. The objectives of the survey were to examine current trend …

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 …

Directed Altruism And Enforced Reciprocity In Social Networks, Stephen Leider, Markus M. Mobius, Tanya S. Rosenblat, Quoc-Anh Do

Research Collection School Of Economics

We conducted online field experiments in large real-world social networks in order to decompose prosocial giving into three components: (1) baseline altruism toward randomly selected strangers, (2) directed altruism that favors friends over random strangers, and (3) giving motivated by the prospect of future interaction. Directed altruism increases giving to friends by 52% relative to random strangers, whereas future interaction effects increase giving by an additional 24% when giving is socially efficient. This finding suggests that future interaction affects giving through a repeated game mechanism where agents can be rewarded for granting efficiency-enhancing favors. We also find that subjects with …

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.

The More Kids, The Less Mom's Divvy: Impact Of Childbirth On Intrahousehold Resource Allocation, Tomoki Fujii, Ryuichiro Ishikawa

Research Collection School Of Economics

We investigate how the impact of childbirth on intrahousehold allocation for married Japanese couples. We developed reduced‐form and structural‐form specifications from a unified theoretical framework. Under a weak set of assumptions, we can focus on private goods to track the changes in intrahousehold resource allocation. Our estimation results show that that allocation of resources within household tend to move to the disadvantage of women after a childbirth. One additional child is associated with a reduction in the wife's private expenditure share. Our estimation results reject the income-pooling hypothesis, and show that women are more risk averse than men.

Utility Functions, Future Consumption Targets And Subsistence Thresholds, Ashok Guha, Brishti Guha

Research Collection School Of Economics

If the consumer’s risk aversion behavior varies intertemporally and if the risk aversion coefficient on future consumption becomes very large, the consumer tends to aim at a fixed future consumption target. A by-product is a reinterpretation of subsistence theories of consumption.

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 Berry

Publications – Dreihaus College of Business

Pre-tests are a non-graded assessment tool used to determine pre-existing subject knowledge. Typically pre-tests are administered prior to a course to determine knowledge baseline, but here they are used to test students prior to topical material coverage throughout the course. While counterintuitive, the pre-tests cover material the student is not expected to know, but serve as a motivational tool and a road map for the students, resulting in improved course performance.

Retirement Effects On Health In Europe, Norma B. Coe, Gema Zamarro

Education Reform Faculty and Graduate Students Publications

What are the health impacts of retirement? As talk of raising retirement ages in pensions and social security schemes continues around the world, it is important to know both the costs and benefits or the individual as well as the governments' budgets. In this paper we use the Survey of Health, Aging and Retirement in Europe (SHARE) dataset to address this question in a multi-country setting. We use country-specific early and full retirement ages as an instrument for retirement behavior in a regression discontinuity design approach. These statutory retirement ages clearly induce retirement, but are not related to an individual's …

Pre-Test Assessment, Thomas D. Berry

Thomas D Berry

Indescribability And Asymmetric Information At The Contracting Stage, Takashi Kunimoto

Research Collection School Of Economics

Maskin and Tirole [Maskin, E., Tirole, J., 1999. Unforeseen contingencies and incomplete contracts. Review of Economic Studies, 66, 83–114] show that indescribability does not matter for contractual incompleteness when there is symmetric information both at the contracting stage and at the trading stage. Following their setup, I show that with asymmetric information at both stages, indescribability can matter.

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

Economics Faculty Publication Series

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 …

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 …

Trust And Reciproicity [Sic]: An Experimental Examination Of Repeated Play In Trust Games, Ben Kuehn

Senior Theses and Projects

Rational theory predicts agents act exclusively to maximize their own monetary interest. This model can be inconsistent with observed behavior in experimental games. Rationality has been expanded upon to allow multiple orders of rationality to exist simultaneously allowing for the existence of motivations other than self interest. This study reports the results in two Trust Games designed to further this study. Data from eight experimental treatments involving 44 subjects provides an exploration of the effects of first mover rights on repeated play in a trust game with the same partner. Experimental results indicate behavior is motivated by positive reciprocity. Further, …

Gender-Role Orientation As Determinant Of Entrepreneurial Self-Efficacy, Mary Conway Dato-On, Stephen L. Mueller

Faculty Publications

Entrepreneurial self-efficacy (ESE) is often included in entrepreneurial intentions models to explain why some individuals are more likely than others to become entrepreneurs. An unsettled question among researchers is whether ESE differs between men and women. While early studies seem to suggest that men have higher ESE than women, more recent studies are inconclusive. Lacking empirical support for gender differences in ESE compels researchers to look for other factors to explain variation in entrepreneurial self-efficacy. The present study confirms two recent studies finding no significant difference in ESE between men and women in a representative sample of MBA students. This …

Why Brazil Has Not Grown: A Comparative Analysis Of Brazilian, Indian, And Chinese Economic Management, Fernando Ferrari, Anthony Petros Spanakos

Department of Political Science and Law Faculty Scholarship and Creative Works

This paper does not aim to dispute that Brazil would benefit from reforms in any or all of these areas. Rather, the paper offers a skeptical perspective on reform menus and proposes an alternative explanation for the faster growth of Brazil’s peers India and China2. The paper begins by introducing (section 1) the idea of the BRICs countries, to establish the basis for comparisons of most similar cases. It then surveys the results of a generation of Washington Consensus era growth (section 2). Although there is a considerable amount of divergence over what causes growth, it seems that something approaching …

Target Saving In An Overlapping Generations Model, Brishti Guha, Ashok S. Guha

Research Collection School Of Economics

We examine a model in which the utility function has been engineered so that it is optimal for consumers to aim for a fixed target level of retirement resources. In this case, consumption displays excess sensitivity to current income as well as perfect old age insurance. In an overlapping generations model, this leads naturally to multiple and unstable equilibria. Under static expectations, it also leads to a well-defined dynamics, including possible historical traps, implosions involving ever-diminishing capital stock and ever-increasing interest rates, and the feasibility of optimal one-time interventions.