Economic Theory Commons^™

Mountain Monitor-1st Quarter 2013, Kenan Fikri, Mark Muro

Mountain Monitor Quarterly

Economic recovery gained strength across the major metro areas of the Mountain West in the first quarter of 2013. Multiple metro areas achieved long-awaited full employment recoveries in the first quarter and regional production surpassed pre-recession levels of output for the first time. The region’s strong housing rebound continued to be a boon. Additionally, a special supplement to the Monitor shows that the healthcare sector has been an outsized contributor to recovery throughout the region. Despite progress on multiple fronts, though, many Mountain metro areas remain scarred with high unemployment rates, severely depressed house prices, and daunting jobs deficits.

Endogenous Group Formation Via Unproductive Costs, Jason A. Aimone, Laurence R. Iannaccone, Michael D. Makowsky, Jared Rubin

Economics Faculty Articles and Research

Sacrifice is widely believed to enhance cooperation in churches, communes, gangs, clans, military units, and many other groups. We find that sacrifice can also work in the lab, apart from special ideologies, identities, or interactions. Our subjects play a modified VCM game—one in which they can voluntarily join groups that provide reduced rates of return on private investment. This leads to both endogenous sorting (because free-riders tend to reject the reduced-rate option) and substitution (because reduced private productivity favours increased club involvement). Seemingly unproductive costs thus serve to screen out free-riders, attract conditional cooperators, boost club production, and increase member …

The Fii Model As An Investment In Patience: Exploring Time Preferences In Medellin, Colombia, Jennifer Graham

Master's Theses

The motivation for this research is to explore the success behind the Oakland based Family Independence Initiative (FII) as a model for poverty alleviation. During the period of June-December 2012, nearly 200 small business owners in Medellin, Colombia participated in a field experiment intended to replicate the FII model by randomizing the treatments of setting goals, receiving conditional payments, and participating in self-help groups, as well as the combinations thereof. The data shows that the subjects in the full FII treatment group achieve more goals and have significantly higher monthly sales than those subjects in any other treatment or control …

Collusion In Peer Evaluation, Suo Wang

Honors Scholar Theses

The exact consensual and impartial division function by DeClippel et al (2008) offers a procedure for dividing a fixed award among partners. The peer evaluation mechanism proposed by DeClippel et al (2008) offers participating partners incentives to tell the truth. This paper examines and demonstrates that, when agents form at most one coalition and report wrong values of the relative shares, they capture the total amount of money being divided and their share improves by exactly the same percentage. When multiple coalitions emerge, the division function fails to assign payoffs to each partner. This paper also includes a discussion of …

Three Essays On Renewable Energy, Kepifri Alpha Lakoh

Department of Agricultural Economics: Dissertations, Theses, and Student Research

This dissertation studies three main issues related to renewable energy in the United States and in Sub Sahara Africa.

The first chapter seeks to provide answers to a very fundamental question for second generation biofuels: “How much crop residue can farmers harvest from their fields for sale to cellulosic ethanol companies without affecting current levels of production?” The model developed is applied to 101 counties from four Midwestern states in the United States (Colorado, Iowa, Nebraska and Wyoming). Results show that soil organic matter significantly contributes to explaining changes in technical efficiency and total factor productivity. Furthermore, average crop …

Inflation Targeting And Growth: The Role Of The Tradable Sector, Luis Monroy Gómez Franco

Undergraduate Economic Review

This paper provides an analytical explanation to the empirical association between monetary policy conducted according to the inflation targeting (IT) framework and the appreciation of the exchange rate, relating it to the literature on the effects of the exchange rate on growth. A two sector small open economy model is developed in which the behavior of the non tradable inflation and the nominal exchange rate are analyzed. The results indicate that the response to inflation variance under the IT regime causes the appreciation trend. Since this trend is not reversed immediately, increasing returns in the tradable sector affect capital accumulation.

An Assessment Of Hydroelectric Feasibility At Colonel Charles D. Maynard Dam In Tucker, Arkansas, Connor Quigley

Economics Undergraduate Honors Theses

The primary purpose of this report is to analyze the economic feasibility of converting the Colonel Charles D. Maynard Lock and Dam to a hydroelectric facility. This report takes a traditional cost-benefit analysis approach and includes a sensitivity and scenario analysis.

The Economic Theory Of Deregulation, Samuel D. Gass

Renée Crown University Honors Thesis Projects - All

One of the consequences of the financial crisis of 2008 was a renewed focus on the issue of deregulation. The broadly recognized connection between the greatest economic downturn since the Great Depression and the systematic deregulation of our financial markets dating back over three decades reinvigorated the economic and political debate around the appropriate balance between market freedom and government regulation. This paper explores this theme historically, analyzing several economic markets that were highly regulated prior to the late 20^th century. Through this analysis it establishes a foundational framework for the study of the widespread deregulation of the late …

Agency Decision-Making For Climate Change: Cost-Benefit Analysis, The Precautionary Principle, And The Bounds Of Rationality, Laura Carr

Pomona Senior Theses

Climate change tests the limits of human understanding of complexity and uncertainty. It challenges assumptions about our presumed power of control over this planet. This paper examines the theory of how governmental executive branch agencies make regulation decisions about climate change using the decision-making methodologies of cost-benefit analysis and the precautionary principle, and as influenced by perceptions of the bounds of human rationality and ability to deal with risk and uncertainty.

Are Tournaments Optimal Over Piece Rates Under Limited Liability For The Principal?, Kosmas Marinakis, Theofanis Tsoulouhas

Research Collection School Of Economics

A highly acclaimed result is that tournaments are superior to piece rates when the agents are risk averse and their production activities are subject to a relatively large common shock. The reason is that tournaments allow the principal to trade insurance for lower income to the agents. Our analysis shows that this celebrated result does not carry over to the case when a limited liability (bankruptcy) constraint limits the payments the principal can make, provided that the liquidation value of the firm is sufficiently small. This finding has important implications for the vast number of limited liability firms. Even though …

On Domains That Admit Well-Behaved Strategy-Proof Social Choice Functions, Shurojit Chatterji, Rezmi Sanver, Arunava Sen

Research Collection School Of Economics

In this paper, we investigate domains that admit “well-behaved” strategy-proof social choice functions. We show that if the number of voters is even, then every domain that satisfies a richness condition and admits an anonymous, tops-only, unanimous and strategy-proof social choice function, must be semi-single-peaked. Conversely every semi-single-peaked domain admits an anonymous, tops-only, unanimous and strategy-proof social choice function. Semi-single-peaked domains are generalizations of single-peaked domains on a tree introduced by Demange (1982).

The First Struggles Of The Capitalistic Peace And Its Detractors: An Analysis Of Greek Trade And Its Effects On Foreign Policy In The Athenian State, Joshua Blume

Undergraduate Honors Capstone Projects

Although, a ubiquitous number of articles has arisen recently debating the validity of the so-called "Capitalist Peace," there has been little exploration of the theory from an ancient historical perspective, primarily due to the lack of trade data between countries or city-states. As the primordial birthplace of trade and democracy, there is perhaps no better example than ancient Greece to shed insight into the possible validity of the capitalist peace theory. Utilizing new research involving trade in ancient Greece, this paper seeks to explore the relative validity of the "Capitalist Peace" in ancient Greece by conducting a qualitative analysis of …

[Sabbatical Report], Alex Lebedinsky

Sabbatical Reports

During the sabbatical leave I collaborated with Dr. Ferhan Atici of the Mathematics department on a new theory of mathematical modeling called Time Scale Calculus (TSC). Dr. Atici and I are also working on another article (titled) "Cagan-type rational expectation model on complex discrete time domains."

Go West Young Man: Self-Selection And Endogenous Property Rights, Taylor Jaworski, Bart J. Wilson

Economics Faculty Articles and Research

If, as Hume argues, property is a self-referring custom of a group of people, then property rights depend on how that group forms and orders itself. In this article we investigate how people construct a convention for property in an experiment in which groups of self-selected individuals can migrate between three geographically separate regions. To test a hypothesis of Demsetz's, we vary across two treatments the external benefits of migrating. We find that self-selection has a powerful effect on establishing conventions of property and begetting increases in wealth through exchange and specialization. We also find support for the Demsetz hypothesis.

A Smooth Test For The Equality Of Distributions, Anil Bera, Aurobindo Ghosh, Zhijie Xiao

Research Collection School Of Economics

The two-sample version of the celebrated Pearson goodness-of-fit problem has been a topic of extensive research, and several tests like the Kolmogorov-Smirnov and Cramer-von Mises have been suggested. Although these tests perform fairly well ´ as omnibus tests for comparing two probability density functions (PDFs), they may have poor power against specific departures such as in location, scale, skewness, and kurtosis. We propose a new test for the equality of two PDFs based on a modified version of the Neyman smooth test using empirical distribution functions minimizing size distortion in finite samples. The suggested test can detect the specific directions …

Working Paper No. 09, Martin Heidegger: A Compromised Man, Mark Miller

Working Papers in Economics

This inquiry seeks to establish that Martin Heidegger registered as a compromised man in his ethics and philosophy. First, through analyzing Heidegger’s roots in Aristotle and the Pre-­Socratics, this inquiry will introduce Heidegger’s philosophical compatibility with the Nazi Party. After deciphering his rectorial address in 1933 and subsequent actions during his rectorship of the University of Freiburg, this inquiry considers the level of Nazi indoctrination in Heidegger’s work. Finally, this inquiry carefully considers Heidegger’s compromised character through his actions in the post-­‐rectorate phase.

Institutions, The State, And Economic Development: An Analysis And Evaluation Of Ha-Joon Chang's Critique Of The Dominant Discourse And His Thoughts On State-Led Development Theory, Luke M. Jackson

Electronic Theses and Dissertations

This paper examines two distinct schools of thought on how to best spur economic activity in developing economies. Mainstream economists, like Hernando De Soto and Douglass North, argue private property rights and free markets, and the institutions which nourish and protect them, are the primary driver of economic growth. Heterodox economists, led by prominent author and economist Ha-Joon Chang, acknowledge institutions play an important role in inducing economic activity but challenge the notion institutions are the primary driver of development. They argue targeted state-led investment and regulation are as important, if not more important, than protecting market freedom and private …

Robust Virtual Implementation: Toward A Reinterpretation Of The Wilson Doctrine, Georgy Artemov, Takashi Kunimoto, Roberto Serrano

Research Collection School Of Economics

We study a mechanism design problem where arbitrary restrictions are placed on the sets of first-order beliefs of agents. Calling these restrictions Δ, we use Δ-rationalizability (Battigalli and Siniscalchi, 2003, [5]) as our solution concept, and require that a mechanism virtually implement a socially desirable outcome. We obtain two necessary conditions, Δ-incentive compatibility and Δ-measurability and show that the latter is satisfied as long as a particular zero-measure set of first-order beliefs is ruled out. In environments allowing small transfers of utility among agents, these two conditions are also sufficient.

Mountain Monitor-4th Quarter 2012, Kenan Fikri, Mark Muro

Mountain Monitor Quarterly

Indicators of economic recovery depicted continued progress in the major metropolitan areas of the Mountain West in the fourth quarter of 2012. The region’s employment recovery gained momentum, and solid home-price increases in the region contributed to the nation‘s broader housing recovery. Such inroads bode well for further advances in 2013. At the same time, the region’s output recovery slowed and unemployment refused to budge.

Optimal City Hierarchy: A Dynamic Programming Approach To Central Place Theory, Wen-Tai Hsu, Thomas J. Holmes, Frank Morgan

Research Collection School Of Economics

Central place theory is a key building block of economic geography and an empirically plausible description of city systems. This paper provides a rationale for central place theory via a dynamic programming formulation of the social planner's problem of city hierarchy. We show that there must be one and only one immediate smaller city between two neighboring larger-sized cities in any optimal solution. If the fixed cost of setting up a city is a power function, then the immediate smaller city will be located in the middle, confirming the locational pattern suggested by Christaller [4] . We also show that …

Overfishing: Economic Policies In Finite Resource Biological Pools, Abdullah Nasser

Undergraduate Economic Review

Common-property fishing is a classic example of the tragedy of the commons. Driven by competition, rational fishermen are forced to overfish to maintain marketplace viability. This shortsighted strategy will lead to the depletion of the common resource pool, and ultimately the destruction of the local fishing industry. In this paper, we present a dynamic differential system of a finite-resource fishing pool to model choices faced by average fishermen. We show that the situation mirrors a Prisonor’s Dilemma on the short- and long-terms, where overfishing is always the dominant Nash equilibrium strategy. Additionally, we use the model to analyze a multitude …

Household Task Delegation Among High-Fertility Forager-Horticulturalists Of Lowland Bolivia, Jonathan Stieglitz, Michael Gurven, Hillard Kaplan, Paul L. Hooper

ESI Publications

Human kin cooperation is universal, leading researchers to label humans as “cooperative breeders.” Despite widespread interest in human cooperation, there has been no systematic study of how household economic decision making occurs. We document age and sex profiles of task delegation by parents to children ages 4–18 among Bolivian forager-horticulturalists. We test for sex differences in the probability of delegation and examine whether tasks are more likely delegated as household labor demand increases. We also test whether food acquisition tasks are more likely delegated to higher producers.We find mixed support for the prediction that girls are more likely delegated domestic …

Review Of John Tomasi, Free Market Fairness, John Thrasher

Philosophy Faculty Articles and Research

A review of John Tomasi's Free Market Fairness, published by Princeton University Press.

China And Global Imbalances From A View Of Sectorial Reforms, Hiro Ito, Ulrich Volz

Economics Faculty Publications and Presentations

This paper examines the impact of sectorial reforms on current account imbalances, with a special focus on China. In particular, we investigate to what extent reforms pertaining to the financial sector, social protection, and healthcare may contribute to a rebalancing of China’s persistent current account imbalances. Our forecasting results suggest that reforming the financial sector would be a significant contributor to the country’s rebalancing with an effect much larger than that of capital account liberalization. Strengthened provisions of social protection and publicly-funded healthcare are also found to contribute to a rebalancing of the Chinese economy.

Physical Activity And Modernization Among Bolivian Amerindians, Michael Gurven, Adrian V. Jaeggi, Hillard Kaplan, Daniel Cummings

ESI Publications

Background: Physical inactivity is a growing public health problem, and the fourth leading risk factor for global mortality. Conversely, indigenous populations living traditional lifestyles reportedly engage in vigorous daily activity that is protective against non-communicable diseases. Here we analyze physical activity patterns among the Tsimane, forager-horticulturalists of Amazonian Bolivia with minimal heart disease and diabetes. We assess age patterns of adult activity among men and women, test whether modernization affects activity levels, and examine whether nascent obesity is associated with reduced activity.

Methods and Findings: A factorial method based on a large sample of behavioral observations was employed …

Teacher Qualifications And Student Achievement: A Panel Data Of Analysis, Trevor Collier

Economics and Finance Faculty Publications

Recent academic research suggests that teacher quality plays an important role in student achievement: however, empirical research on the efficacy of policies requiring teachers to obtain certain degrees is inconclusive, particularly in elementary education. This paper models a panel data production function with fixed effects using the Early Childhood Longitudinal Study (ECLS-K) to asses the relationship between different undergraduate and graduate majors and elementary student test scores. Specifcally, we aim to discern if there is a difference in teacher efficacy within the different education related majors (e.g. early childhood education and elementary education) and between education and non-education related majors.

The Gettysburg Economic Review, Volume 7, Spring 2013

Gettysburg Economic Review

No abstract provided.

Faith, Science And Religion, Vernon L. Smith

ESI Publications

No abstract provided.

On The Orthodox Nature Of Heterodox Income Distribution Theory, Ross A. Nichols

Gettysburg Economic Review

The goal of this paper is to show that orthodox and heterodox theories of personal income distribution developed in the mid-twentieth century are effectively identical, despite their claims to the contrary. While segmented labor market theory contends that neoclassical theories of personal income distribution, such as human capital theory, ignore the impact of social institutions on the labor market, human capital theory actually implicitly incorporates them. Social institutions are, therefore, just as important in the orthodox approach to personal income distribution. Yet, while this is the case, the heterodox perspective is valuable because of the stress it places on social …

Cognitive Systems For Revenge And Forgiveness, Michael E. Mccullough, Robert Kurzban, Benjamin A. Tabak

ESI Publications

Minimizing the costs that others impose upon oneself and upon those in whom one has a fitness stake, such as kin and allies, is a key adaptive problem for many organisms. Our ancestors regularly faced such adaptive problems (including homicide, bodily harm, theft, mate poaching, cuckoldry, reputational damage, sexual aggression, and the infliction of these costs on one's offspring, mates, coalition partners, or friends). One solution to this problem is to impose retaliatory costs on an aggressor so that the aggressor and other observers will lower their estimates of the net benefits to be gained from exploiting the retaliator in …