Other Economics Commons^™

Labor Contracts, Gift-Exchange And Reference Wages: Your Gift Need Not Be Mine!, Hernán Bejarano, Brice Corgnet, Joaquín Gómez-Miñambres

ESI Working Papers

We extend Akerlof’s (1982) gift-exchange model to the case in which reference wages respond to changes in the work environment such as those related to unemployment benefits or workers’ productivity levels. Our model shows that these changes spur disagreements between workers and employers regarding the value of the reference wage. These disagreements tend to weaken the gift-exchange relationship thus reducing production levels and wages. We find support for these predictions in a controlled, yet realistic, workplace environment. Our work also sheds light on several stylized facts regarding employment relationships such as the increased intensity of labor conflicts when economic conditions …

Nonbinding Goals In Teams: A Real Effort Coordination Experiment, James Fan, Joaquin Gómez-Miñambres

ESI Publications

Problem definition: We investigate the impact of nonbinding (wage-irrelevant) goals, set by a manager, on a team of workers with “weak-link” production technology. Can nonbinding goals improve team production when team members face production complementarity? Academic/practical relevance: Nonbinding goals are easy to implement and ubiquitous in practice. These goals have been shown to improve individual performance, but it remains to be seen if such goals are effective in team production when there is production complementarity among workers. Methodology: We first develop a theoretical model where goals act as reference points for workers’ intrinsic motivation to complete the …

Vinyl As Event: Record Store Day And The Value-Vibrant Matter Nexus, Eliot Bates

Publications and Research

Why would anyone purchase expensive, natural resource-intensive, and seemingly obsolete material carriers of music when streaming providers provide unlimited access to over 40 million songs for a small monthly fee? As I will show, we can no longer assume that contemporary interest is driven solely by a collector’s market or because of the audible qualities of the vinyl listening experience, and must attend to the many ways people engage with record objects today – and by extension, the vinyl record as an ontological multiple. Through an analysis of Record Store Day 2015 and affiliated phenomena including YouTube unboxing videos, other …

Give Me A Challenge Or Give Me A Raise, Aleksandr Alekseev

ESI Working Papers

I study the effect of task difficulty on workers' effort and compare it to the effect of monetary rewards in an incentivized lab experiment. I find that task difficulty has an inverse-U effect on effort, and that this effect is quantitatively large when compared to the effect of conditional monetary rewards. Difficulty acts as a mediator of monetary rewards: conditional rewards are most effective at the intermediate or high levels of difficulty. I show that the inverse-U pattern of effort response to difficulty is not consistent with the Expected Utility model but is consistent with the Rank-Dependent Utility model that …

Self-Selecting Into Being A Dictator: Distributional Consequences, Lara Ezquerra, Praveen Kujal

ESI Working Papers

We allow for principals to self-select into delegating, or not, the allocation decision to an agent in a modified dictator game. The standard dictator game arises when principal´s choose to make the allocation decision themselves. Dictators thus obtained transfer lower amounts to receivers, relative to when the decision making is passed to an agent under delegation (or in the standard dictator game). Principals choose to be a dictator nearly half of the time. The average amount transferred by individuals who delegate in more than half of the rounds is significantly higher than the quantity transferred by those who choose to …

Lying And Shirking Under Oath, Nicolas Jacquemet, Alexander James, Stéphane Luchini, James J. Murphy, Jason F. Shogren

ESI Working Papers

This study explores whether an oath to honesty can reduce both shirking and lying among crowd-sourced internet workers. Using a classic coin-flip experiment, we first show that a substantial majority of Mechanical Turk workers both shirk and lie when reporting the number of heads flipped. We then demonstrate lying can be reduced by first asking each worker to swear voluntarily on his or her honor to tell the truth in subsequent economic decisions. The oath, however, did not reduce shirking as measured by time- at-coin-flip-task, although it did increase the time they spent answering a demographic survey. Conditional on response, …

Kinship, Fractionalization And Corruption, Mahsa Akbari, Duman Bahrami-Rad, Erik O. Kimbrough

Economics Faculty Articles and Research

We examine the roots of variation in corruption across societies, and we argue that marriage practices and family structure are an important, overlooked determinant of corruption. By shaping patterns of relatedness and interaction, marriage practices influence the relative returns to norms of nepotism/favoritism versus norms of impartial cooperation. In-marriage (e.g. consanguineous marriage) generates fractionalization because it yields relatively closed groups of related individuals and thereby encourages favoritism and corruption. Out-marriage creates a relatively open society with increased interaction between non-relatives and strangers, thereby encouraging impartiality. We report a robust association between in-marriage practices and corruption both across countries and within …

Computed Tomography Shows High Fracture Prevalence Among Physically Active Forager-Horticulturalists With High Fertility, Jonathan Stieglitz, Benjamin C. Trumble, Horus Study Team, Caleb E. Finch, Dong Li, Matthew J. Budoff, Hillard Kaplan, Michael D. Gurven

ESI Publications

Modern humans have more fragile skeletons than other hominins, which may result from physical inactivity. Here, we test whether reproductive effort also compromises bone strength, by measuring using computed tomography thoracic vertebral bone mineral density (BMD) and fracture prevalence among physically active Tsimane forager-horticulturalists. Earlier onset of reproduction and shorter interbirth intervals are associated with reduced BMD for women. Tsimane BMD is lower versus Americans, but only for women, contrary to simple predictions relying on inactivity to explain skeletal fragility. Minimal BMD differences exist between Tsimane and American men, suggesting that systemic factors other than fertility (e.g. diet) do not …

Adding Tournament To Tournament: Combining Between-Team And Within-Team Incentives, Michael Majerczyk, Roman Sheremeta, Yu Tian

ESI Working Papers

We examine theoretically and experimentally how combining between-team and within-team incentives affects behavior in team tournaments. Theory predicts that free-riding will occur when there are only between-team incentives, and offering within-team incentives may solve this problem. However, if individuals collude, then within-team incentives may not be as effective at reducing free-riding. Consistent with the theoretical predictions, the results of our experiment indicate that although between-team incentives are effective at increasing individual effort, there is substantial free-riding and declining effort over time. Importantly, a combination of between-team and within-team incentives is effective not only at generating effort but also at sustaining …

Establishing An “Injury-In-Fact” Through Valuations Of Ecosystem Services: Putting It In Terms Federal Courts Understand, Allie Jo Mitchell

Minnesota Journal of Law, Science & Technology

No abstract provided.

Technology Licensing And Innovation – A Correction On Two-Part Tariff Analysis, Yuanzhu Lu, Swapnendu Banerjee, Sougata Poddar

Economics Faculty Articles and Research

The main purpose of this note is two-fold: (i) Correcting an error in the two-part tariff licensing contract, and (ii) Altering one of the main results following the two-part tariff analysis in Mukherjee and Mukherjee (2013). This also strengthens the primary conclusion of Mukherjee and Mukherjee (2013).

A Dynamical Systems Approach To Cryptocurrency Stability, Carey Caginalp

ESI Publications

Recently, the notion of cryptocurrencies has come to the fore of public interest. These assets that exist only in electronic form, with no underlying value, offer the owners some protection from tracking or seizure by government or creditors. We model these assets from the perspective of asset flow equations developed by Caginalp and Balenovich, and investigate their stability under various parameters, as classical finance methodology is inapplicable. By utilizing the concept of liquidity price and analyzing stability of the resulting system of ordinary differential equations, we obtain conditions under which the system is linearly stable. We find that trend-based motivations …

The Dynamics Of Men's Cooperation And Social Status In A Small-Scale Society, Christopher Von Rueden, Daniel Redhead, Rick O'Gorman, Hillard Kaplan, Michael Gurven

ESI Publications

We propose that networks of cooperation and allocation of social status co-emerge in human groups. We substantiate this hypothesis with one of the first longitudinal studies of cooperation in a preindustrial society, spanning 8 years. Using longitudinal social network analysis of cooperation among men, we find large effects of kinship, reciprocity and transitivity in the nomination of cooperation partners over time. Independent of these effects, we show that (i) higher-status individuals gain more cooperation partners, and (ii) individuals gain status by cooperating with individuals of higher status than themselves. We posit that human hierarchies are more egalitarian relative to other …

Ostromian Lessons For Post-Disaster Resilience: Evidence From The 2015 Earthquake In Nepal, Veeshan Rayamajhee

Economics ETDs

The dissertation is organized in six chapters. The first chapter provides a synopsis of the four research articles that are comprised in this manuscript. It outlines the goals of each article and connects them to specific Ostromian insights to shed light on the empirical findings. Chapters 2, 3, and 5 are based on a field study that I conducted in Sindhupalchowk, Nepal following the devastating earthquake in 2015. Chapter 4 uses case studies from Chicago, New Orleans, Nepal, and Indonesia. The final chapter summarizes major lessons from the four papers.

The second chapter investigates household-level coping responses to the 7.8 …

Co-Enforcement Of Common Pool Resources: Experimental Evidence From Turfs In Chile, Carlos A. Chávez, James J. Murphy, John K. Stranlund

ESI Working Papers

This work presents the results of framed field experiments designed to study the co-enforcement of access to common pool resources. The experiments were conducted in the field with participants in the territorial use rights in fisheries (TURFs) management scheme that regulates access to nearshore fisheries along the coast of Chile. In the experiments, TURF members not only decided on harvest but also invested in monitoring to deter poaching by outsiders. Treatments varied whether the monitoring investment was an individual decision or determined by a group vote. Per-unit sanctions for poaching were exogenous as if provided by a government authority, and …

Kinship Ties Across The Lifespan In Human Communities, Jeremy Koster, Dieter Lukas, David Nolin, Eleanor Power, Alexandra Alvergne, Ruth Mace, Cody T. Ross, Karen Kramer, Russell Graves, Mark Caudell, Shane Macfarlan, Eric Schniter, Robert Quinlan, Siobhan Mattison, Adam Reynolds, Chun Yi-Sim, Eric Massengill

ESI Publications

A hypothesis for the evolution of long post-reproductive lifespans in the human lineage involves asymmetries in relatedness between young immigrant females and the older females in their new groups. In these circumstances, inter-generational reproductive conflicts between younger and older females are predicted to resolve in favor of the younger females, who realize fewer inclusive fitness benefits from ceding reproduction to others. This conceptual model anticipates that immigrants to a community initially have few kin ties to others in the group, gradually showing greater relatedness to group members as they have descendants who remain with them in the group. We examine …

Nonlinear Price Dynamics Of S&P 100 Stocks, Gunduz Caginalp, Mark Desantis

ESI Publications

The methodology presented provides a quantitative way to characterize investor behavior and price dynamics within a particular asset class and time period. The methodology is applied to a data set consisting of over 250,000 data points of the S&P 100 stocks during 2004-2018. Using a two-way fixed-effects model, we uncover trader motivations including evidence of both under- and overreaction within a unified setting. A nonlinear relationship is found between return and trend suggesting a small, positive trend increases the return, while a larger one tends to decrease it. The shape parameters of the nonlinearity quantify trader motivation to buy into …

Better Understanding Human Capital In West Virginia, Christiadi, John Deskins

Bureau of Business & Economic Research

No abstract provided.

Natural Gas Investment In West Virginia, 2010-2016, Eric Bowen

Bureau of Business & Economic Research

West Virginia’s natural gas boom began in 2010 as hydraulic fracturing and horizontal drilling techniques began to be applied to the state’s shale formations. Since then, West Virginia has become the nation’s ninth-largest natural gas producer in 2017, with gross withdrawals of more than 1.6 trillion cubic feet. Since the gas boom started, the natural gas industry has made considerable investments in the state to pay for well drilling, mineral royalties, and pipeline infrastructure, among other investment costs. In this report, we estimate these investments in two key areas: upstream costs and midstream infrastructure.

The Effect Of Social Information In The Dictator Game With A Taking Option, Tanya O'Garra, Valerio Capraro, Praveen Kujal

ESI Working Papers

We experimentally study how redistribution choices are affected by positive and negative information regarding the behaviour of a previous participant in a dictator game with a taking option. We use the strategy method to identify behavioural ‘types’, and thus distinguish ‘conformists’ from ‘counter-conformists’, and unconditional choosers. Unconditional choosers make up the greatest proportion of types (about 80%) while only about 20% of subjects condition their responses to social information. We find that both conformity and counter-conformity are driven by a desire to be seen as moral (the ‘symbolization’ dimension of moral identity). The main difference is that, conformity is also …

Cournot Marked The Turn From Classical To Neoclassical Thinking, Vernon L. Smith, Sabiou M. Inoua

ESI Working Papers

For classical economists, markets served the highest value buyers without anyone in the market needing to know that it was possible to write aggregate buyer reservation prices in the form, D = F (p). Cournot, thereby launched neoclassical economics as modelling and thinking of economic action in terms of their outcome effects, rather than their roots in human experience.

Classical Economics: Lost And Found, Sabiou M. Inoua, Vernon Smith

ESI Working Papers

"We argue that neoclassical value theory suffers from a more basic and serious logical indeterminacy, which is inherent in the axiom of price-taking behavior, and which renders price dynamics indeterminate before inquiring as to its stability. If everyone in the economy takes price as given, whence come these prices? Who is giving these prices? Jevons avoided the indeterminacy by assuming that people must have complete information on supply and demand, and the consequent equilibrium prices—‘perfect competition.’ Walras in effect imported an external agent who found the prices by trial-and-error-correction (the Walrasian Auctioneer). Paradoxically, both approaches had the potential better to …

God And Governance: Reflections On Living In The Belly Of The Beast, Peter Mclaren

Education Faculty Articles and Research

In this critical rage article, Peter McLaren unleashes his revolutionary critique aimed at capitalist injustice behind postdigital socio-technological developments, historical forms of injustice such as racism and colonialism, and recent political events and developments including but not limited to US interventions in Latin America and the presidency of Donald Trump. Rising from two important prongs of McLaren’s work—revolutionary critical pedagogy and liberation theology—the article connects myth, religion, science, politics, technology, and humanity. The article reveals McLaren’s most intimate thoughts and experiences and aligns them with sophisticated theory and philosophy. It dances between the individual and the collective, the realistic and …

Review Of Creditworthy: A History Of Consumer Surveillance And Financial Identity In America, Lynne Doti

Economics Faculty Articles and Research

A book review of Josh Lauer's Creditworthy: A History of Consumer Surveillance and Financial Identity in America.

Commentary: Reflections On Decision Research And Its Empiricism: Four Comments Inspired By Harrison, Nathaniel T. Wilcox

ESI Publications

"Generally I find Harrison's chapter cogent, interesting, and well-informed in details and particulars, and so do not speak of them. Instead, I reflect on four larger matters Harrison brings to my mind. These four matters are presented below as four separate sections, to be read as four separate and short comments (though the four sections do share a few threads)."

Essays On Interplay Between Economics And Culture, Ishita Tripathi

LSU Doctoral Dissertations

This dissertation constitutes of two distinct essays on the influence of terrorism on individual perception and belief formation. In the first study, using micro-level data from 32 European countries, we find that an increase in terrorist activities by foreign perpetrators instigates negative sentiments towards immigrants. But the intensity of this adverse impact of terrorism decreases with time. Additionally, our analysis reveals that the effect of terrorism varies across individuals depending on various socio-economic attributes. Terrorism has a stronger negative influence on the residents, if their own country hosts relatively larger number of migrants. Individuals are not affected by terrorist attacks …

Enabling Electric Storage Participation In Wholesale Markets: An Analysis Of Ferc Order No. 841, Glenn A. Smith

Master of Science in Energy Systems Management

This study has been performed to understand the potential impact that the Federal Energy Regulatory Commission’s (FERC) Order No. 841 will have on the adoption of energy storage resources (ESR). This analysis looked at: (1) the Order’s requirements, (2) FERC’s exercise of its authorized jurisdiction within the Order, and (3) actions taken by the Regional Transmission Organizations (RTO), Independent System Operators (ISO) and FERC to demonstrate compliance with the Order’s requirements:

Order No. 841 utilizes a participation model to ensure ESR’s are able to participate in wholesale electricity markets to an extent that is reflective of a resource’s physical and …

Enabling Electric Storage Participation In Wholesale Markets: An Analysis Of Ferc Order No. 841, Glenn A. Smith

Master's Projects and Capstones

This study has been performed to understand the potential impact that the Federal Energy Regulatory Commission’s (FERC) Order No. 841 will have on the adoption of energy storage resources (ESR). This analysis looked at: (1) the Order’s requirements, (2) FERC’s exercise of its authorized jurisdiction within the Order, and (3) actions taken by the Regional Transmission Organizations (RTO), Independent System Operators (ISO) and FERC to demonstrate compliance with the Order’s requirements:

Order No. 841 utilizes a participation model to ensure ESR’s are able to participate in wholesale electricity markets to an extent that is reflective of a resource’s physical and …

Monetary Equilibrium And The Cost Of Banking Activity, Paola Boel, Gabriele Camera

ESI Working Papers

We investigate the effects of banks’ operating costs on allocations and welfare in a low interest rate environment. We introduce an explicit production function for banks in a microfounded model where banks employ labor resources, hired on a competitive market, to run their operations. In equilibrium, this generates a spread between interest rates on loans and deposits, which naturally reflects the underlying monetary policy and the efficiency of financial intermediation. In a deflation or low inflation environment, equilibrium deposits yield zero returns. Hence, banks end up soaking up labor resources to offer deposits that do not outperform idle balances, thus …

The Impact Of Cleft Lip/Palate And Clp Surgical Intervention On The Social Integration Of Adolescents In India, Mustafa Zahid

Master's Theses

Cleft Lip/Palate, a congenital orofacial anomaly, carries an incidence rate of approximately 1 in every 1000 births. In addition to the stigma associated with the condition, the varying levels of cleft severity might result in lower life outcomes which could include lower cognitive ability, physical and psychological well-being, social and behavioral outcomes of adolescents. This paper focuses on the social integration element of life outcomes, which is composed of the social inclusion and prosocial behavior of the adolescent. Despite the affordability of restorative surgeries, patients in rural areas of Low and Middle-Income Countries (LMICs) such as India face accessibility and …