Economic Theory Commons^™

Fair Division With Uncertain Needs, Jingyi Xue

Research Collection School Of Economics

Imagine agents having uncertain needs for a resource when the resource has to be divided before uncertainty resolves. In this situation, waste occurs when an agent's assignment turns out to exceed his realized need. How should the resource be divided in the face of possible waste? This is a question out of the scope of the existing rationing literature. Our main axiom to address the issue is no domination. It requires that no agent receive more of the resource than another while producing a larger expected waste, unless the other agent has been fully compensated. Together with conditional strict endowment …

Buddhist Economics: Problems And Possibilities, James Mark Shields

Faculty Contributions to Books

No abstract provided.

The Economic Impacts Of A U.S. Withdrawal From Nafta: A Cge Analysis, Jonathan Liu

Undergraduate Economic Review

The aim of this study is to examine the economic impacts of a U.S. withdrawal from the North American Free Trade Agreement (NAFTA) on Canada, Mexico and the United States. The shocks simulate scenarios in which the U.S instates penalizing tariff rates on NAFTA countries, a trade war between NAFTA members and a tariff reset to the WTO MFN rates. The effects of these tariff structures are analyzed under the framework of a computable general equilibrium (CGE) model with a focus on macroeconomic variables and welfare. The findings show that, in all iterations, Mexico’s economy takes a substantial hit, America’s …

Patriarchal Norms, Bargaining, And Gendered Attitudes On Intimate Partner Violence, Anna Eckenrode

Master's Theses

How do the underlying mechanisms of social norms and bargaining power relate to the acceptance of intimate partner violence within households? How do short run and long run determinants of gender norms affect attitudes toward IPV? This study begins to decompose the dynamics of the acceptance of IPV within couples using data from the Demographic Health Survey, as well as examine the relationship in the context of patriarchal societies using data from the Ethnographic Atlas. I find that females are more accepting than males of intimate partner violence, and females becoming more educated is associated with her being less accepting …

A Portable Method Of Eliciting Respect For Social Norms, Erik O. Kimbrough, Alexander Vostroknutov

Economics Faculty Articles and Research

Recent models of prosociality suggest that cooperation in laboratory games may be better understood as resulting from concern for social norms than from prosocial preferences over outcomes. Underlying this interpretation is the idea that people exhibit heterogeneous respect for shared norms. We introduce a new, abstract task to elicit a proxy for individual norm-following propensity by asking subjects to choose from two actions, where one is costly. We instruct subjects that “the rule is” to take the costly action. Their willingness to incur such a cost reveals respect for norms. We show that choices in this task are similar across …

Karl Marx And Liberation Theology: Dialectical Materialism And Christian Spirituality In, Against, And Beyond Contemporary Capitalism, Peter Mclaren, Petar Jandrić

Education Faculty Articles and Research

This paper explores convergences and discrepancies between liberation theology and the works of Karl Marx through the dialogue between one of the key contemporary proponents of liberation theology, Peter McLaren, and the agnostic scholar in critical pedagogy, Petar Jandrić. The paper briefly outlines liberation theology and its main convergences with the works of Karl Marx. Exposing striking similarities between the two traditions in denouncing the false God of money, it explores differences in their views towards individualism and collectivism. It rejects shallow rhetorical homologies between Marx and the Bible often found in liberation theology, and suggests a change of focus …

A Martin Luther King Jr. Amendment To The U.S. Constitution: Toward The Abolition Of Poverty, Theodore Walker

Perkins Faculty Research and Special Events

Rev. Dr. Martin Luther King Jr. prescribed that we add an economic bill of rights to the U.S. Constitution. A King-Inspired bill of rights should include a constitutional amendment that enumerates a natural human right to be free from economic poverty, and appropriate enforcement legislation.

For the sake of abolishing slavery, the Thirteenth Amendment says:

(Section 1) Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

(Section 2) Congress shall have power to enforce this article by …

Are Prize-Linked Savings Accounts The Solution To Arkansas' Savings Problem?, Mckenzie Wages

Accounting Undergraduate Honors Theses

This research finds that access to prize-linked savings could improve the financial security of Arkansans. Prize-linked savings (PLS) accounts are nontraditional savings products that offer depositors the chance to win cash prizes instead of a typical interest rate return. Given the low median incomes, high liquid asset poverty rates, and high levels of underbanked and undereducated individuals in Arkansas, there is a need for an innovative savings solution like PLS in the state. PLS accounts capitalize on individuals’ propensity for lottery-like risk-taking to inspire the productive behavior of personal saving. A wide range of individuals, especially those who could stand …

Does Debt Matter?, Luhan Li

Applied Economics Theses

National debt is a popular topic, since people have a lot of different views on national debt. For example, many people think that there is a positive relationship between national debt and GDP per capita. In other words, the national debt has also increased with the growth of GDP per capita. However, some people feel that there is an inverse relationship between them, so much so that the topic has been discussed. Based on my interest in this topic, I decided to discuss this question. This paper will discuss their influence and importance by analyzing national debt, GDP per capita, …

Cryptocurrencies As An Alternative To Fiat Monetary Systems, David A. Georgeson

Applied Economics Theses

The recent popularity of cryptocurrencies is largely associated with a particular application referred to as Bitcoin. Cryptocurrency has a mix of properties that make it difficult to examine. These properties consist of being infinitely divisible, durable, transferable, fungible and can be controlled to be artificially scarce. Further, cryptocurrencies can act as a means of payment, a medium of exchange, a store of value, and a unit of account. This thesis will analyze the technical features underlying cryptocurrencies and find out whether or not they can function as an alternative to fiat money. Since Bitcoin is the most commonly understood application …

Maskin Meets Abreu And Matsushima, Yi-Chun Chen, Takashi Kunimoto, Yifei Sun, Siyang Xiong

Research Collection School Of Economics

We study the classical Nash implementation problem due to Maskin (1999), but allow for the use of lottery and monetary transfer as in Abreu and Matsushima (1992, 1994). We therefore unify two well-established but somewhat orthogonal approaches of implementation theory. We first show that Maskin monotonicity is a necessary and sufficient condition for pure-strategy Nash implementation by a direct mechanism. Second, taking mixed strategies into consideration, we show that Maskin monotonicity is a necessary and sufficient condition for mixed-strategy Nash implementation by a finite (albeit indirect) mechanism. Third, we extend our analysis to implementation in rationalizable strategies. In contrast to …

Global Economic Outlook: An Interview With The Global Chief Economist Of The Economist Intelligence Unit, Simon Baptist, Simon Baptist, Alvin Lee

Asian Management Insights

Global Chief Economist of The Economist Intelligence Unit, Simon Baptist, discusses trends that are likely to shape the future global economic outlook, in this interview with Alvin Lee.

Essays On Wealth Inequality And Asset Pricing, Georgios Koimisis

Dissertations, Theses, and Capstone Projects

Economic and financial theories are often found to be in conflict with empirical evidence, suggesting revisions and elaborations of existing models. There are usually many revisions proposed in response to these "puzzles", but often the true resolution may be a factor not yet realized. This dissertation consists of three chapters and contributes to the explanation of a persistent and significant anomaly, the equity premium puzzle, by taking into account the implications of wealth inequality on consumer preferences and, consequently, on asset prices.

The first chapter examines how wealth inequality affects asset prices in a complete market setting. Wealth inequality is …

2008 Financial Crisis And The Deviation From The Taylor Rule, Uzoma H. Okoye

Honors College Theses

In this paper, we derive possible causes of the 2008 financial crisis, as well as provide evidence of a possible deviation from the Taylor rule by the Federal Reserve. This research draws up mostly primary sources such as published books and speeches by John B. Taylor himself, as well as articles from academic journals related to the topic. Other prior research tends to take a side on the argument as to whether the Federal Reserve deviated or not. This paper serves as a descriptive analysis of different sides of the argument to come up with suggestions regarding the Fed’s actions.

The Rise And Fall Of The Stock Market: A Look At Financial Professionals Suicide Ideation, Jefferson Mcclain

Undergraduate Honors Theses

On October 24, 1929, the United States stock market crashed. Will Rogers, a local newspaper writer, said of that experience, “When Wall Street took that tail spin, you had to stand in line to get a window to jump out of, and spectators were selling space for bodies in the East River” (Lowenthal 1987). Tales of ruined stockbrokers jumping from the windows of tall buildings ran across the country. These stories have prompted interest in the interaction between workplace environment and mental health. In this study, we looked at the relationship between stock market performance and suicide ideation for working …

Impulsive Behavior In Competition: Testing Theories Of Overbidding In Rent-Seeking Contests, Roman M. Sheremeta

ESI Working Papers

Contests are commonly used in the workplace to motivate workers, determine promotion, and assign bonuses. Although contests can be very effective at eliciting high effort, they can also lead to inefficient effort expenditure (overbidding). Researchers have proposed various theories to explain overbidding in contents, including mistakes, systematic biases, the utility of winning, and relative payoff maximization. Using an eight-part experiment, we test and find significant support for the existing theories. Also, we discover some new explanations based on cognitive ability and impulsive behavior. Out of all explanations examined, we find that impulsivity is the most important factor explaining overbidding in …

Planning To Fail: The Eurozone, Its Sovereign Debt Crisis, And The Future Of The Union, Kyle Whitworth

Theses

The European Union has been one of the greatest accomplishments of modern history. Through economic and political integration has ended centuries of warfare on the continent while producing the worlds largest trading bloc. Despite the initial success of the monetary union and its single currency, the Union has been bogged down economic troubles in the form of a debt crisis among several of the member states. The recovery period of the crisis has produced growth that is slow and uneven. Countries such as Germany has assumed the role of the economic powerhouse of Europe and therefore a political leader in …

Cooler Heads Prevail: An Experimental Study On The “Cooling” Effect Of The Strategy Method On Agent Resentment, Jing L. Davis

Economics Faculty Articles and Research

This study investigates whether agents’ resentment of controls in a gift-exchange game can be effectively mitigated using the strategy method where agents’ effort choices are elicited contingent on all possible contract choices by principals. The results suggest that allowing agents to contemplate contract choices prospectively results in less resentment and that agents exert higher effort than without this “cooling” process.

La Influencia Del Neoliberalismo Sobre Las Ideas De Lo “Natural”: Un Análisis De Las Ideas De La Naturaleza En Urbanizaciones Cerradas Y Grupos Subalternos En Tigre / The Influence Of Neoliberalism On Ideas Of What Is “Natural”: An Analysis Of Ideas Of Nature In Closed-Gated And Marginalized Communities In Tigre, Catherine Fraser

Independent Study Project (ISP) Collection

Since the 1970s, there has been a global increase in neoliberal policy and ideology, marked by privatization, deregulation, and the withdrawal of the state from social programs (Harvey 2005: 2-3). Neoliberalism has manifested itself in Argentina in various forms, notably in the rise of closed-gated neighborhoods. In Tigre, a northern suburb of Buenos Aires, real estate developers fill in wetlands and re-route river tributaries to construct closed-gated neighborhoods around artificial water bodies to create an idealized neighborhood that offers residents a life in contact with “nature”. Seeking to accumulate capital, real estate developers commodify and construct a specific form of …

Engaging America: Unearthing The Middle Way In The Conflict Between Liberals And Conservatives, Noah Cadet

Capstone Collection

Liberals and conservatives have waged conflict over development strategies since the founding of the United States of America. Observers of the 2016 Presidential Election may have noticed an escalation of a preexisting trend of destructive engagement between Democrats and Republicans. The researcher pursued primary and secondary research in an attempt to understand how conflict within and between development paradigms in the United States can be transcended. The central research question was regarding how this conflict affects efforts towards peacebuilding at the grassroots from the perspective of a liberal. The literature review provides a brief histories of US American Political Economy …

Preference Conformism: An Experiment, Enrique Fatas, Shaun P. Hargreaves Heap, David Rojo Arjona

Economics Faculty Articles and Research

This paper reports on an experiment designed to test whether people’s preferences change to become more alike. Such preference conformism would be worrying for an economics that takes individual preferences as given (‘de gustibus es non disputandum’). So the test is important. But it is also difficult. People can behave alike for many reasons and the key to the design of our test, therefore, is the control of the other possible reasons for observing apparent peer effects. We find evidence of preference conformism in the aggregate and at the individual level (where there is heterogeneity). It appears also to be …

Goal Setting In The Principal-Agent Model: Weak Incentives For Strong Performance, Brice Corgnet, Joaquín Gómez-Miñambres, Roberto Hernán-González

ESI Publications

We study a principal–agent framework in which principals can assign wage-irrelevant goals to agents. We find evidence that, when given the possibility to set wage-irrelevant goals, principals select incentive contracts for which pay is less responsive to agents' performance. Agents' performance is higher in the presence of goal setting despite weaker incentives. We develop a principal–agent model with reference-dependent utility that illustrates how labor contracts combining weak monetary incentives and wage-irrelevant goals can be optimal. The pervasive use of non-monetary incentives in the workplace may help account for previous empirical findings suggesting that firms rely on unexpectedly weak monetary incentives.

Air Force Installation Contracting Agency Strategic Sourcing And Category Management Through Expenditure Profiling, James T. Okamoto

Theses and Dissertations

This thesis examines an approach to characterizing various expenditure profiles for the Air Force Installation Contracting Agency’s Operations and Maintenance Appropriated Funds. Using naive, seasonal naive, trailing moving average, exponential smoothing, linear regression, and autoregressive integrated moving average (ARIMA) forecasting methods, the paper evaluates multiple error measures over one fiscal year to find the most precise model for each level of analysis. Levels of analysis included the Air Force enterprise and level 1 category levels, as well as an illustrative approach to Information and Technology spend at the level 2 subcategory, major command, and base levels. Optimal model characteristics were …

Convergence In Income Inequality: Further Evidence From The Club Clustering Methodology Across States In The U.S., Nicholas Apergis, Christina Christou, Rangan Gupta, Stephen M. Miller

Molasky Family Department of Economics and Real Estate Faculty Research

This paper contributes to the sparse literature on inequality convergence by empirically testing convergence across states in the U.S. This sample period encompasses a series of different periods that the existing literature discusses -- the Great Depression (1929–1944), the Great Compression (1945–1979), the Great Divergence (1980-present), the Great Moderation (1982–2007), and the Great Recession (2007–2009). This paper implements the relatively new method of panel convergence testing, recommended by Phillips and Sul (2007). This method examines the club convergence hypothesis, which argues that certain countries, states, sectors, or regions belong to a club that moves from disequilibrium positions to their club-specific …

A Theory Of Focal Points In 2x2 Games, Jonathan W. Leland, Mark Schneider

ESI Publications

Since the classic work of Schelling, the notion of a focal point has been widely applied to explain coordinated behavior. However, focal points remain largely outside the formal apparatus of game theory. This paper develops a model of play in 2 × 2 games where payoff differences determine what strategy players will perceive as “salient” and choose to play. The model uniquely predicts which outcome will emerge for virtually the entire class of 2 × 2 normal form games. For the subset of such games involving coordination and asymmetric payoffs, payoff differences identify focal outcomes and strategies in the same …

Clarity Trumps Content: An Experiment On Information Acquisition In Beauty Contests, Sanjay Banerjee, Hong Qu, Ran Zhao

Accounting Faculty Articles and Research

We provide experimental evidence that under strong beauty contest incentives, players ignore signals from an information source with high content if the source has low clarity. Instead, they acquire equally costly signals from a source with higher clarity despite its lower content. Content measures how precisely an information source identifies an economic situation, whereas clarity measures how precisely the source content is commonly interpreted. Low clarity impairs players' ability to coordinate. When signals are provided exogenously, our experimental results are less severe than theoretical predictions, but consistent with level-2 reasoning in a cognitive behavioral model. When players acquire signals endogenously, …

Working Paper No. 08, A Non-Equilibrium Approach To Economics: Towards An Intellectual Biography Of Gunnar Myrdal, Leo Kendall

Working Papers in Economics

This inquiry seeks to establish that Gunnar Myrdal provided a foundation for and also practiced a non-equilibrium approach to economics. Throughout his career, Gunnar Myrdal was tasked with researching and providing policy for some of the most pressing economic issues of the 20th century. This inquiry considers and examines what I have selected as the most important areas of research over the span of Myrdal’s career, while showing how and why a nonequilibrium was required. First, I start with racial inequality and how Myrdal’s research broke ground on the subject. Next, I consider his key contribution towards understanding regional inequality …

Sex Differences In Political Leadership In An Egalitarian Society, Christopher Von Rueden, Sarah Alami, Hillard Kaplan, Michael Gurven

ESI Publications

We test the contribution of sex differences in physical formidability, education, and cooperation to the acquisition of political leadership in a small-scale society. Among forager-farmers from the Bolivian Amazon, we find that men are more likely to exercise different forms of political leadership, including verbal influence during community meetings, coordination of community projects, and dispute resolution. We show that these differences in leadership are not due to gender per se but are associated with men’s greater number of cooperation partners, greater access to schooling, and greater body size and physical strength. Men’s advantage in cooperation partner number is tied to …

Nebraska Business And Consumer Confidence Indexes: March 9, 2018, Eric Thompson

Leading Economic Indicator Reports

Nebraska consumer and business confidence fell during February 2018, dropping from the near-peak levels seen in January. The Consumer Confidence Index – Nebraska (CCI-N) fell to 101.6 in February from a value of 115.2 in January. The February value remains above the neutral level of 100.0. The Business Confidence Index – Nebraska (BCI-N) fell to 107.4 In February from 112.2 in January. Both monthly readings were well above the neutral value of 100.0 suggesting that business confidence remains strong. When asked about the most important issue facing their business, customer demand was mentioned by 38 percent of respondents. But, there …

Your Money Or Your Time? Experimental Evidence On Overbidding In All-Pay Auctions, Adriana Breaban, Charles N. Noussair, Andreea Victoria Popescu

ESI Working Papers

Competition for a prize frequently takes the form of dedicating time toward winning a contest. Those who spend the most time become more likely to obtain the prize. We model this competition as an all-pay auction under incomplete information, and report an experiment in which expenditures and rewards are in terms of time. In the experiment, subjects must stay in the laboratory doing nothing for an initially prespecified length of time. However, they can bid, in terms of time, to leave early. The auction has an allpay structure so that if an individual does not submit the highest bid within …